All Encompassing Mortgage and Real Estate Thread

[Wulaw Horn 19,153]

1 hour ago, jimmyjazz said:

EDIT:  wait, you ARE correct in that you're not being clear.  I think what you're now saying in the quote is that it's not necessarily bad to lend money to less qualified borrowers.  I took it the other way.  That said, those loans blew up and helped trigger a collapse because they were part of products that were too leveraged to sustain the downturn.  Agreed?

Yes. But the problem was that they were 100X leveraged not that the foreclosure rate hit the wild and wholly high of 3.6%. That would mean nothing without the leverage. 

[jimmyjazz 46,186]

41 minutes ago, Wulaw Horn said:

Yes. But the problem was that they were 100X leveraged not that the foreclosure rate hit the wild and wholly high of 3.6%. That would mean nothing without the leverage. 

Well, foreclosures climbing over 5X in 5 years sure didn't help.  It was virtually a "black swan" event that those smart Wall Street types couldn't imagine, but it did.

All this, and yet I repeat -- I blame the banks for bundling products that were sensitive to that type of spike more than I blame the people who took out loans that were either larger than they should have or that had adjustable rates which would eventually come home to roost.  Taking advantage of a sucker doesn't mean the sucker gets all the blame.

[Chewbacca 7,787]

On 1/28/2023 at 7:29 AM, Nice Guy Eddie said:

Will this be a major shift if developers start to build entire communities of nothing but rental homes? 

https://www.houstonchronicle.com/business/real-estate/article/canadian-homebuilder-starts-build-to-rent-houston-17746039.php

 

It's been happening for years.  I don't know why you would do it, though.  Building 300 apartments is a lot more efficient (and profitable) than 300 single family homes.

[Chewbacca 7,787]

8 hours ago, Wulaw Horn said:

it wasn’t lenders (and I wasn’t a lender then) who turned they into an economy wrecking shit storm it was the Wall Street guys with their bright ideas. 

Gonna have to agree to disagree on that one.  My cleaning lady was looking to buy a house in my neighborhood for ~450-500k at the time because lenders would do no doc loans with little to no money down.  That, along with the collateralization of the debt, was the driving factor of the last housing mess.

[Upgrayedd 5,821]

58 minutes ago, Chewbacca said:

It's been happening for years.  I don't know why you would do it, though.  Building 300 apartments is a lot more efficient (and profitable) than 300 single family homes.

Unless the density zoning doesn’t get you there and there is zero chance it’s gonna get rezoned to a PAD.

[Beantown Express 2.0 6,559]

Not sure if this is the correct thread but I needed some help with a realtor quesiton.  I am considering putting an offer in on a house in my neighborhood and the realtor that is handling the sale of this house has a big agency with multiple realtors under her.  So one of her people is handling the sale of the house and she said if we use another one of her realtors for the sale of our house she would cut the commissions or something form 3% down to 2.5%.  Is this a big deal?  She made it sound like by using the same realtor brokerage for both ends would help us get the new house possibly since they all work together.  She did say one works for the seller and one for us the buyer and they don't talk as that would be illegal.  Unfortunately, this agency/agent is the biggest in our neighborhood and controls a lot of the sales/market here for some reason.  Any advice would be appreciated. 

[Incredulity 11,683]

15 minutes ago, Beantown Express 2.0 said:

Not sure if this is the correct thread but I needed some help with a realtor quesiton.  I am considering putting an offer in on a house in my neighborhood and the realtor that is handling the sale of this house has a big agency with multiple realtors under her.  So one of her people is handling the sale of the house and she said if we use another one of her realtors for the sale of our house she would cut the commissions or something form 3% down to 2.5%.  Is this a big deal?  She made it sound like by using the same realtor brokerage for both ends would help us get the new house possibly since they all work together.  She did say one works for the seller and one for us the buyer and they don't talk as that would be illegal.  Unfortunately, this agency/agent is the biggest in our neighborhood and controls a lot of the sales/market here for some reason.  Any advice would be appreciated. 

 

Dual agency is illegal in some states.  

You would want/need the seller to pass along the commission cut in a price concession for it to make any difference to you.  

It would not be "ethical" for a firm representing buyer and seller to literally, "help us get the new house".  In the grey areas I am sure it could reduce transaction friction and subconsciously make your offer more attractive.

How capable are you at evaluating a home?  Can you walk around and identify issues, or totally naive?  Do you have a good understanding of the asking price versus the market? 

[LCHorn 2,632]

22 minutes ago, Beantown Express 2.0 said:

Not sure if this is the correct thread but I needed some help with a realtor quesiton.  I am considering putting an offer in on a house in my neighborhood and the realtor that is handling the sale of this house has a big agency with multiple realtors under her.  So one of her people is handling the sale of the house and she said if we use another one of her realtors for the sale of our house she would cut the commissions or something form 3% down to 2.5%.  Is this a big deal?  She made it sound like by using the same realtor brokerage for both ends would help us get the new house possibly since they all work together.  She did say one works for the seller and one for us the buyer and they don't talk as that would be illegal.  Unfortunately, this agency/agent is the biggest in our neighborhood and controls a lot of the sales/market here for some reason.  Any advice would be appreciated. 

I wouldn't be overly concerned, but if you are, I also don't think it would be hard to find another realtor willing to match on a .5% commission rebate.  That's a pretty typical "friends" discount and particularly so in this slower market. 

[Incredulity 11,683]

I don't say the below to impugn RE agents, some can be very much worth the money.  Others, not so much.

 

You have already done a big portion of the value of a buyers agent.  Finding a home you want that is for sale.   

IMPO the rest is coordination and scheduling of inspections, buffering further negotiations on price concessions/repairs.  If you are capable of evaluating an inspection report, and sending a reasonable response to whatever you find, then you might consider going without an agent.  In theory you could ask for the whole 3%.

[UTPhil2006 3,817]

59 minutes ago, LCHorn said:

I wouldn't be overly concerned, but if you are, I also don't think it would be hard to find another realtor willing to match on a .5% commission rebate.  That's a pretty typical "friends" discount and particularly so in this slower market. 

Yeah our fairly standard deal is 1% on the sell and 3% on the buy if we get both. 

[Beantown Express 2.0 6,559]

14 minutes ago, UTPhil2006 said:

Yeah our fairly standard deal is 1% on the sell and 3% on the buy if we get both. 

sorry but confused on that.  You give back the 1 and the 3 to the customer?

 

[Incredulity 11,683]

"typical" RE commission = 6%

"typical" split = 3% to buyers agent , 3% to sellers agent

If he gets dual agency(reps both buyer and seller) he does 1% Seller, 3% Buyer.  Which really means his firm gets 4%.

 

"typical" in quotes because I am sure someone will take umbrage with that description.

[UTPhil2006 3,817]

15 minutes ago, Beantown Express 2.0 said:

sorry but confused on that.  You give back the 1 and the 3 to the customer?

 

Okay I misread what your post was saying. So you have no buyers agent so the sellers agent is referring you one within her company. In that instance 2.5 is better than no discount since getting another agent would be 3% 

[Wulaw Horn 19,153]

36 minutes ago, Beantown Express 2.0 said:

sorry but confused on that.  You give back the 1 and the 3 to the customer?

 

No- they charge 1% on a sell (4% total commission) and 3% on the buy. 
saves the seller 2% total as they are paying the seller side but not buyer. 

[Gil Bang 26,035]

2 hours ago, Beantown Express 2.0 said:

Not sure if this is the correct thread but I needed some help with a realtor quesiton.  I am considering putting an offer in on a house in my neighborhood and the realtor that is handling the sale of this house has a big agency with multiple realtors under her.  So one of her people is handling the sale of the house and she said if we use another one of her realtors for the sale of our house she would cut the commissions or something form 3% down to 2.5%.  Is this a big deal?  She made it sound like by using the same realtor brokerage for both ends would help us get the new house possibly since they all work together.  She did say one works for the seller and one for us the buyer and they don't talk as that would be illegal.  Unfortunately, this agency/agent is the biggest in our neighborhood and controls a lot of the sales/market here for some reason.  Any advice would be appreciated. 

 

The bolded part is BULLSHIT.  They are all with the same BROKERAGE, which means the BROKER is overseeing all of the transactions.

 

Now, I don't have an issue with dual agency in general.  My brokerage has a few thousand agents, and yeah, we end up on both sides of a deal quite often.  I look out for my clients best interests, and I assume that the other guy does the same.   

[closetohumping 17,474]

5 minutes ago, Gil Bang said:

 

The bolded part is BULLSHIT.  They are all with the same BROKERAGE, which means the BROKER is overseeing all of the transactions.

 

Now, I don't have an issue with dual agency in general.  My brokerage has a few thousand agents, and yeah, we end up on both sides of a deal quite often.  I look out for my clients best interests, and I assume that the other guy does the same.   

California allows the same agent to represent both parties right?

[Gil Bang 26,035]

25 minutes ago, closetohumping said:

California allows the same agent to represent both parties right?

Yep.   Happens occasionally. 

In a tight market, a smart buyer will often deal directly with the listing agent instead of using a buyer's agent.   A listing agent "may" give the ethics a slight bend by "advising" a buyer what it's going to take to be the successful bidder on a hot property.

Here's what I usually do:  When I take a listing, I usually ask for 5% max.  I tell the seller that if I end up with the buyer, I can knock it down to 4%.  I make more money, the seller pays less commission, and the buyer gets the property. Win/Win/Win.   Of course, it only works if my buyer's offer is as good or better than the other offers. 

 

Edit:  Every time I present an offer to a seller, I include a net sheet, showing commission, title, escrow, home warranty, transfer taxes, etc.  They can look at the bottom line and see what they're walking with.   If offer A nets them more than offer B, they likely take A

Edited January 31, 2023 by Gil Bang

[Chewbacca 7,787]

16 hours ago, Upgrayedd said:

Unless the density zoning doesn’t get you there and there is zero chance it’s gonna get rezoned to a PAD.

I still wouldn't do it.  How long does it take to build 300 SFHs?  I can build 300 apartments in 24 months.  As you well know, time is a killer in construction.

[Gil Bang 26,035]

34 minutes ago, Chewbacca said:

I still wouldn't do it.  How long does it take to build 300 SFHs?  I can build 300 apartments in 24 months.  As you well know, time is a killer in construction.

Sure, but you can "phase" the houses, so your capital outlay is smaller.    With an apartment building, you really can't lease unit 1 until Unit 300 is finished.

[Incredulity 11,683]

God bless an against the grain business plan and those with the stones to try.

 

[Chewbacca 7,787]

42 minutes ago, Gil Bang said:

Sure, but you can "phase" the houses, so your capital outlay is smaller.    With an apartment building, you really can't lease unit 1 until Unit 300 is finished.

You can phase them both, but the apartments will be done faster and generate revenue sooner.  Long construction timeline = lots of construction loan interest paid (as well as general conditions to the GC).

[Gil Bang 26,035]

Fuck my fucking life.

 

I had my oceanfront deal listed at 1.25 million.  Put the fucker in escrow last week for $1.15.

 

Some cocksucker just listed another unit on a higher floor for 975,000.  

 

My deal just got fucked, and the buyer will no doubt walk.  

[jimmyjazz 46,186]

2 minutes ago, Gil Bang said:

Fuck my fucking life.

 

I had my oceanfront deal listed at 1.25 million.  Put the fucker in escrow last week for $1.15.

 

Some cocksucker just listed another unit on a higher floor for 975,000.  

 

My deal just got fucked, and the buyer will no doubt walk.  

That sucks.  Sorry to hear it.  Any differences between the two (besides the higher floor)?

[Incredulity 11,683]

Better ocean view for $2000, Alex

[Wulaw Horn 19,153]

7 minutes ago, Incredulity said:

Better ocean view for $2000, Alex

I think you mean 200k less. 

[Gil Bang 26,035]

7 minutes ago, jimmyjazz said:

That sucks.  Sorry to hear it.  Any differences between the two (besides the higher floor)?

Ours is a bit nicer, but more traditional looking (owner is an Italian guy in his 70's) so marble floors, etc.   This one is lower-caliber finishes, but "beachier".   And I don't think their view is any better, as ours is unobstructed.   If anything, their balcony is windier than ours.

[CooterBrown 18,031]

Did anyone tell your buyer? Maybe they quit looking at listings once they went under contract.

[UT_OB1 2,225]

I’m just here to say Zeus lending sucks. First they started with the “proof of insurance “ this month and threatened to charge me if I didn’t send it to them. It had been renewed in October AND the insurance company sent sent them proof of insurance several times.

 

Tonight, for shits and grins i decided to check property taxes they were due today and the collect escrow (required by them). Haven’t been paid.  They better be planning on paying the 7% fee. 
 

 

[bluto 4,942]

11 minutes ago, UT_OB1 said:

I’m just here to say Zeus lending sucks. First they started with the “proof of insurance “ this month and threatened to charge me if I didn’t send it to them. It had been renewed in October AND the insurance company sent sent them proof of insurance several times.

 

Tonight, for shits and grins i decided to check property taxes they were due today and the collect escrow (required by them). Haven’t been paid.  They better be planning on paying the 7% fee. 
 

 

So long as it’s postmarked then you’re good. Also takes some time to work through electronically as well, esp if you’re in a weather area. 

[Dbeasy 15,093]

10 hours ago, Incredulity said:

 

Dual agency is illegal in some states.  

You would want/need the seller to pass along the commission cut in a price concession for it to make any difference to you.  

It would not be "ethical" for a firm representing buyer and seller to literally, "help us get the new house".  In the grey areas I am sure it could reduce transaction friction and subconsciously make your offer more attractive.

How capable are you at evaluating a home?  Can you walk around and identify issues, or totally naive?  Do you have a good understanding of the asking price versus the market? 

Your description is not quite accurate. However, the overall points you are making are valid. 

Just to clarify terminology, in Texas dual agency is illegal, but that means one agent representing both parties. Can’t do it. To handle the transaction properly, the broker assigns two agents and serves as an intermediary on the transaction. 

Now the reality is that the buyer better be sure they understand how to evaluate their own offer to make sure it’s a good offer, because the agent they are assigned by the broker won’t help in most scenarios.  

[UT_OB1 2,225]

2 minutes ago, bluto said:

Also takes some time to work through electronically as well, esp if you’re in a weather area. 

[Gil Bang 26,035]

16 hours ago, CooterBrown said:

Did anyone tell your buyer? Maybe they quit looking at listings once they went under contract.

That's my only hope.  They and their agent are both in Orange County, and their agent's brokerage specializes in Medical RE.  So I doubt that their agent is checking San Diego new listings every day (which I do, BTW).  

 

[South Austin 52,620]

59 minutes ago, Gil Bang said:

That's my only hope.  They and their agent are both in Orange County, and their agent's brokerage specializes in Medical RE.  So I doubt that their agent is checking San Diego new listings every day (which I do, BTW). 

I know nothing about your market, but would it be possible that the other unit was listed too low and they start getting multiple above-list offers?

[Gil Bang 26,035]

3 minutes ago, South Austin said:

I know nothing about your market, but would it be possible that the other unit was listed too low and they start getting multiple above-list offers?

Yes, it's possible.  It's also possible that the agents are idiots, and think that their "1 bedroom" is worth less than my "2 bedroom" even though they have an identical footprint.  They took down 1 wall to open up the view.   We took down 1 wall to open up the view, and added a collapsing room divider.  

Imagine, I've go the only unit for sale, and the seller and agents listing the competing unit never looked at mine to size it up vs. theirs. 

[Storm the Field 5,302]

10-year yield drops down to 3.4%, lowest since early September, following FOMC presser.

[Gil Bang 26,035]

So, the other agent just called me, and I feel a little better.  He said that his unit is really ugly and isn't in the ballpark of mine.  The Kitchen is awful, the flooring sucks, etc. 

He's out of town, so we made a deal that he'll feed me any buyers that call him, and I'll pay him a  25% referral fee if one of them buys.

[Wulaw Horn 19,153]

30 minutes ago, Storm the Field said:

10-year yield drops down to 3.4%, lowest since early September, following FOMC presser.

Huge move in the treasury of 12 points. Correspondingly small move in MBS up 25. Still- better than nothing and above a very stubborn ceiling we’d been bumping into for a couple weeks. 

[UTPhil2006 3,817]

43 minutes ago, Storm the Field said:

10-year yield drops down to 3.4%, lowest since early September, following FOMC presser.

Yup. We locked two today capturing the valley. We got into the mid 3.3’s a couple weeks back and then shot up. We keep getting to around this point and then trickles up. Here’s to hopefully busting through the 3.30 barrier we haven’t seen since Sep 8

[Gil Bang 26,035]

just came from a pitch session, and the mortgage guy that sponsored it (thanks for the beers dude) said rates dipped below 6 today?

[UTPhil2006 3,817]

11 minutes ago, Gil Bang said:

just came from a pitch session, and the mortgage guy that sponsored it (thanks for the beers dude) said rates dipped below 6 today?

Officially (the black background stuff Wulaw posts.. no). As far as what lenders are seeing yes. 

[Wulaw Horn 19,153]

8 hours ago, UTPhil2006 said:

Officially (the black background stuff Wulaw posts.. no). As far as what lenders are seeing yes. 

Yep. 
I’m probably quoting somewhere between 5.4 and 5.99 today depending upon all the usual factors. 
official “black background” is 6.05 today. I assume we probably drop below 6 for the first time in a while. 

[UTPhil2006 3,817]

On 2/1/2023 at 2:53 PM, UTPhil2006 said:

Yup. We locked two today capturing the valley. We got into the mid 3.3’s a couple weeks back and then shot up. We keep getting to around this point and then trickles up. Here’s to hopefully busting through the 3.30 barrier we haven’t seen since Sep 8

Man the 10 year absolutely hates that 3.3xx barrier. We get close every time to breaking through and then bam a day like today and back up to 3.5

[HamsterHookah 112]

Average interest rates fell to 6.09% this week, down from 6.95% in November, and the market is (sort of) starting to heat up, according to The New York Times.

Sales of new homes rose 2.3% between November and December 2022.

But sales of existing homes fell 1.5%, marking the 11th straight monthly decline.

A Zillow economist told the NYT that while she expects continued interest rate declines to entice more buyers, home prices will likely see minimal decline.

Experts suggest an interest rate of 5.5% would be a Goldilocks range — comfortable for sellers and buyers.

So is that a happy ending?

Potentially.

Except, recession fears may spoil it. A bad economy would likely keep the housing market in limbo, so the real estate industry badly wants the economic “soft landing” the Fed is attempting.

As for renters: After huge nationwide increases, several major markets are seeing slight declines in monthly rents.

Edited February 3, 2023 by HamsterHookah

[Neonmoon 38,130]

Fannie Mae just announced existing loans must be now at least 12 months old before eligible to be paid off in a cash out refinance 

Flippers gonna be pissed

[HamsterHookah 112]

59 minutes ago, Neonmoon said:

Fannie Mae just announced existing loans must be now at least 12 months old before eligible to be paid off in a cash out refinance 

Flippers gonna be pissed

What's the underlying reasoning here? I'll hang up and listen.

[Wulaw Horn 19,153]

2 hours ago, Neonmoon said:

Fannie Mae just announced existing loans must be now at least 12 months old before eligible to be paid off in a cash out refinance 

Flippers gonna be pissed

Closing a guy next week that was going to be doing that in 6 months. Guess it’s a year now. 

[LCHorn 2,632]

1 hour ago, HamsterHookah said:

What's the underlying reasoning here? I'll hang up and listen.

 

I'm just reaching here, but I bet it's to support the secondary market; the LLPA's on cash-out refi's are terrible, the improving market conditions are destroying the value of servicing rights, and perhaps banks will be a little more eager to do those loans if they can guarantee themselves 12 months of interest. 

[Wulaw Horn 19,153]

4 minutes ago, LCHorn said:

 

I'm just reaching here, but I bet it's to support the secondary market; the LLPA's on cash-out refi's are terrible, the improving market conditions are destroying the value of servicing rights, and perhaps banks will be a little more eager to do those loans if they can guarantee themselves 12 months of interest. 

So- it also protects from EPO which isn’t the worst in the world. 

[LCHorn 2,632]

2 minutes ago, Wulaw Horn said:

So- it also protects from EPO which isn’t the worst in the world. 

True, but you and I both know that protecting originators is somewhere near the bottom of their list of priorities 😉

[Wulaw Horn 19,153]

11 minutes ago, LCHorn said:

True, but you and I both know that protecting originators is somewhere near the bottom of their list of priorities 😉

No doubt. But we are about to be worried about EPO’s again I think, so every little bit helps- even if it’s unintentional.