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All Encompassing Mortgage and Real Estate Thread

UTPhil2006

By UTPhil2006
in Business and Markets

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mchookem
mchookem

alrighty...i haven't wanted to jinx anything so i've been pretty quiet... but we just closed on our new home in Denver this morning so i can now officially say YEAH! 😃 in a nutshell - we sold

Esque
Esque

Thank you for this - gave me a good laugh.  But also a good reminder of how the general public does not understand what is going on in real estate and thus why so many get caught offsides when the tid

Neonmoon
Neonmoon

Realtor: You should list your house at 500K Client: But three houses down the street sold for 700K Realtor: Yeah, but those are overvalued due to pandemic Fed policy and institutional invest

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Gil Bang

Gil Bang 25915

Posted
Posted (edited)
On 8/17/2023 at 8:37 PM, Gil Bang said:

Oh fuck y'all.  I've been chasing a nice listing for several weeks.  A friend of the GF.  She's gonna sell a super-nice condo, downsize a bit, get away from HOA fees, and bank her 250,000 exemption.   I got the listing today, just as the summer sales season is winding down and the kids are starting school.  Oh well, not much inventory, her unit is super nice, and I can sell it anyway, and probably get a record price for the complex.  

Meanwhile, I've been looking at replacement units for her.  There's an over-55 complex that she likes, so I've been showing her houses in there for a month or so.   

I usually take Mondays off for yardwork, personal errands, home maintenance, etc.  Two Mondays ago, I'm heading to Home Depot, wearing a paint-stained Strickland Propane T Shirt, dirty shorts, and flip flops.  I get an alert that there's a new listing in the over 55.  I'm heading in that direction, so I decide to go preview it.  I pull up, and a woman is peeking through the windows.  She sees me and says "are you the owner".  Nah, I explain that I'm a sloppy realtor on his day off, apologize for my appearance, and tell her I was heading to Home Depot for mulch.   I open the lockbox and invite her in.  

We look at the home together, she asks me about other neighborhood listings, and says "you're very knowledgeable...may I have your card".. Sure.

Fast forward a week.  My family suffers a horrible loss; a tragic death of a younger guy that's near and dear to me and nearer and dearer to the GF.  It's a kick in the nuts.  It's bad.

I get a call from the window-peeker.  She wants to see another listing.  I tell her that I'm living in upside-down land, and  tell her the only time I can show her is at 7 AM.  She says "fine".  We do the showing, she asks me to write at 20k over asking, all cash, and sends bank statements.   The seller is a local monastery.  The homeowner died Elvis-style, on the shitter, and wasn't found for several days.  I've got a copy of the bio-hazard cleanup invoice...15,000. 

His family donated the home to the monastery.   

Listing agent puts on the MLS all the shitter death info, and says all offers will be reviewed after day 7 of the listing.  I call the dude, and he's straight-up old-school.  Says "I will not represent any buyers on this deal".  "I'll play it fair and square", and something in his voice makes me believe him 

So, we get an offer together, I send it over, and the agent responds that I'm offer #9.  

Shit.  I confer with windowpeeker, and we agree to keep looking.  This morning I show her another listing that she likes, but not as much as Elvis-shitterdeath unit.  We do the showing, crunch some numbers, and, this unit is tenant-occupied by an elderly couple, which complicates matters.  We discuss several scenarios, but she tells me that she still prefers the Elvis unit if she can get it.

I explain to her that I cannot write on the second deal with the offer out on the first because it's unethical.  I tell her I'll call the agent on the Elvis Shitter house and see which way the wind is blowing.  I call the guy...Mr. Old School, and say hey, are we in the game here, because if not I'm sending you a withdrawal of offer notice so my client can move on.  He says yeah, your offer is very strong and you're very much in the game and very well might win.

I call windowpeeker and she says fuck it, I'll buy both, and sends me Proof of Funds that she can buy both. 

Oh boy.  Today I listed $895,000 and have cash offers out totaling over a million.  It's the worst week I can imagine personally, and as good as it gets professionally.

Sorry for the self-quote y'all.   I went 1 for 2 on the offers.  I'll take that anytime, but especially these days.

Mr. Old School just called me and told me that they had a higher offer, but the way I structured ours was clean and simple, and he knew from talking to me that I wouldn't jerk him around.   This cat's been licensed since 1977, so he's seen some shit, and I will consider it a compliment from him and proudly accept it. 

It was a good day.  This is a small deal...a little under a half mil, but I'm fine with it.  Give me 5 more of 'em. 

And, I'm going to do what I rarely do; hire a "transaction coordinator" for the deal.  I'm the only guy in town that pushes all the paperwork on his own deals, but my seller on the listing is also a buyer, and she's consuming a huge amount of my time, and with the personal loss that we've suffered...I'm just going to pass this file off on the paperwork side and let somebody else (we have somebody great) deal with the headache. 

Edited by Gil Bang
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Incredulity

Incredulity 11650

Posted
Posted

Fwiw

One house I purchased was rented back for 90 days after diligence ended. As I recall had an extended escrow period.  I was credited the 3 monthly rents on the closing statement.  There was a loan on the purchase.  Its been quite a few years ago so can’t recall all details.  It wasn’t any significant headache with the lender.

 

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Neonmoon

Neonmoon 38129

Posted
Posted (edited)
10 hours ago, Gil Bang said:

Hey Loan Guys:

I have a buyer that's looking at a tenant-occupied home. Out here, a long-term tenant gets 60 day notice.

What's the max that my "owner-occupied" buyer can not "owner-occupy" the unit?   Will the lender frown on 60 days of tenant occupancy?

Fannie/Freddie require primary borrower to move in within 60 days. So no, you’re good,

If you need longer, the lawbreakers do a side agreement under the table and DO NOT put it on the purchase contract or addendum (allegedly). Obviously I can’t recommend that kind of chicanery. 
 

 

Edited by Neonmoon
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Wulaw Horn

Wulaw Horn 19066

Posted
Posted

7.48 for new national average. Headline was “mortgage rates move higher for no reason”. Yep- good times. 

There’s now pretty significant amount of shorts on MBS market, so, there are big bets right now on MBS market continuing to tank and rates to move even higher. I hope those fuckers all take one in the back of the head, GameStop style. 

Highest since late 2000. Thanks Clinton. 

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Gardner Barnes

Gardner Barnes 1562

Posted
Posted

Got a question for you RE people - I need to replace my roof, and I plan to sell in 12 months, assuming (and this is a big if) rates drop a bit. I got 2 quotes - 16K for asphalt shingle and 37K for metal.  

About 1/5 of the houses in the neighborhood have a metal roof.

Understanding that we don't have to sell but are looking to downsize potentially, would we potentially be able to set a 21K higher selling price if we put in a metal roof?  Is the potential return worth the extra cost?

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Wulaw Horn

Wulaw Horn 19066

Posted
Posted
Just now, Gardner Barnes said:

Got a question for you RE people - I need to replace my roof, and I plan to sell in 12 months, assuming (and this is a big if) rates drop a bit. I got 2 quotes - 16K for asphalt shingle and 37K for metal.  

About 1/5 of the houses in the neighborhood have a metal roof.

Understanding that we don't have to sell but are looking to downsize potentially, would we potentially be able to set a 21K higher selling price if we put in a metal roof?  Is the potential return worth the extra cost?

Oh man, I'd think the metal roof would be the least attractive option, but that's just my gut.  I guess ask a good realtor? At any rate, I can't imagine that you get back the 21K extra even if metal is the best option- you usually don't get back $ for $ on repairs or improvements.  I'd do the cheapest. 

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LCHorn

LCHorn 2615

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Posted

I'm not an appraiser and a realtor probably can't answer that question (too much fog of war); the real question you're wanting to know is "Will MY house rise in value sufficient that the cost can be recouped?" and there's tons of variables there and many you can't know.  I mean, it only takes one buyer with a desire for a metal roof and you maybe get the house sold for a premium, but most buyers (particularly in this market) are going to obsess over every cost difference. 

The typical advice most real estate professionals would (or should) give is that that any single improvement between now and when you might sell the home is unlikely to be recouped.  I'm not sure I'd even replace the roof at all unless you think it's bad enough it's going to deter buyers. 

I do think a smart realtor/GC could, if they knew what they were doing and you trusted them, take the right house, recommend a few targeted updates up to including the roof, and have that help your house get sold at all or for a sufficient premium that it pays for themselves or more.  It's hard to speculate without knowing how dated your house is otherwise, whether it has any particular unique elements (view, pool, guest house), etc.  

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Incredulity

Incredulity 11650

Posted
Posted
2 minutes ago, LCHorn said:

I'm not an appraiser and a realtor probably can't answer that question (too much fog of war); the real question you're wanting to know is "Will MY house rise in value sufficient that the cost can be recouped?" and there's tons of variables there and many you can't know.  I mean, it only takes one buyer with a desire for a metal roof and you maybe get the house sold for a premium, but most buyers (particularly in this market) are going to obsess over every cost difference. 

The typical advice most real estate professionals would (or should) give is that that any single improvement between now and when you might sell the home is unlikely to be recouped.  I'm not sure I'd even replace the roof at all unless you think it's bad enough it's going to deter buyers. 

I do think a smart realtor/GC could, if they knew what they were doing and you trusted them, take the right house, recommend a few targeted updates up to including the roof, and have that help your house get sold at all or for a sufficient premium that it pays for themselves or more.  It's hard to speculate without knowing how dated your house is otherwise, whether it has any particular unique elements (view, pool, guest house), etc.  

 We all know kitchens and bathrooms sell houses.

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Neonmoon

Neonmoon 38129

Posted
Posted
41 minutes ago, Gardner Barnes said:

I need to replace my roof

If there is 2 years of life left in your roof per the appraiser, you don't NEED to do shit. 

If buyer says you need to replace your roof, offer a seller concession for 10K and move one. Or don't if you have a backup offer. 

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Catpfish

Catpfish 618

Posted
Posted
1 hour ago, Gardner Barnes said:

Got a question for you RE people - I need to replace my roof, and I plan to sell in 12 months, assuming (and this is a big if) rates drop a bit. I got 2 quotes - 16K for asphalt shingle and 37K for metal.  

About 1/5 of the houses in the neighborhood have a metal roof.

Understanding that we don't have to sell but are looking to downsize potentially, would we potentially be able to set a 21K higher selling price if we put in a metal roof?  Is the potential return worth the extra cost?

Is the replacement due to damage or just age?  Have you had the roof looked at for damage?  First choice would be insurance claim.

That said, I agree with the others that most buyers don't give a shit on metal vs asphalt shingle.  However, they are being a lot more picky on the shape of the roof and AC systems than they used to be.

 

 

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Neonmoon

Neonmoon 38129

Posted
Posted

Bounce back of 55 basis points. Yay

Also, Freedom Mortgage fined $1.75 million for Illegal Kickbacks to Realtors. 

https://nationalmortgageprofessional.com/news/cfpb-fines-freedom-mortgage-175-million-illegal-kickbacks

This is funny because this shit is common practice, if not standard practice. One lender in my town pays 13K a month to the largest realtor firm for a "Marketing Service Agreement". If you are a realtor in that firm, you are assigned a lender from them and supposed to send them your business. There are tons of these MSA's all over town. They pay money per month, have quarterly parties, etc. 

Lenders also pay realtors under the table for their online lead generation services for referrals. 

I'm sure there is tons of other shit too. 

 

 

 

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Neonmoon

Neonmoon 38129

Posted
Posted
7 minutes ago, LCHorn said:

Anyone want to venture an explanation for why the bond market is so favorable this morning?  No credit if you just repeat MBS Highway or Chrisman.  

Habib hasn't posted his update yet, and I don't know the name of the economist he pays on his staff to analyze the bond market for him. But I'm guessing Habib will say he was right about the short squeeze. 

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LCHorn

LCHorn 2615

Posted
Posted

Sample Habib commentary:

Habib yesterday: "I recommend you maintain a floating position as there remains upside left and the Fibonacci sequence that I stole from the DeVinci Code says rates should be better."

Today--market opens down 50 bps

Habib: "The market has opened down but since you received a lock alert from me yesterday you should be good."

Me:

200w.webp.3ea4fecff20bd1ddcfc805b388384628.webp

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UT_OB1

UT_OB1 2217

Posted
Posted
2 hours ago, Wulaw Horn said:

I will cut you. 

5.99?  Or 5.0?  
 

I’d take 5.99. Getting close to ReFi-ing that fixer upper i bought 2 years ago. Even though rates were really low I still calculated the rent vs mortgage at 5.75. I didn’t calculate for 8%

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Wulaw Horn

Wulaw Horn 19066

Posted
Posted

Had someone turn up their nose (on a $200k loan) today on my 6.99 rate with no points. 
he told me I should be able to go lower because someone else “locked his loan for 90 days” at 6.25 on a 30 and he wasn’t paying any points. 
I told him congrats on finding the best mortgage guy period and then called his agent and told him I wasn’t doing the transaction. 
waiting to hear back. I asked him for his GFE but there’s something screwy going on, obviously. 

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LCHorn

LCHorn 2615

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Posted

Also, I might have joked about them upthread but there was a mortgage co (not sure if broker or banker but probably former) out of Houston in 2021 and on which we had an agent that would send both us and their contact information to prospective buyers.  All of the employees of this shop were Asian ladies 40+ in age and they would, presuming our pricing was the same, get down to 50 or 60 bps.  I looked them up in MMI and they had done something like $150m last 14 months, and probably only eeking out a profit if they actually paid minimum wage.  

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Wulaw Horn

Wulaw Horn 19066

Posted
Posted
7 minutes ago, LCHorn said:

If it helps to corroborate your pricing I’d gross about 25 bps at 6.250%.

That’s better than anything I saw. Everything I saw earlier at 6.25% was negative. 
25 bips on a 200k loan is $500. Ain’t nobody doing that. Absurd. 
I ain’t mad, I’m laughing.

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Wulaw Horn

Wulaw Horn 19066

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Posted

This is making it all look like 1st and 2nd quarter next year are going to be good quarters for the first time in 2 years in the industry.

There was 110k in downward revisions, June and July numbers now look like the suck that they were, and the expectation was 200k until earlier in the week when they sandbagged down to 170k so they could now beat expectations at 186k or whatever it was.   The MBS market should be up on this news not down. Hopefully the idiots at the fed can read this report and the old revisions downward correctly and tell everyone we are through with the hikes. 

We are almost a full point higher on the spread than we normally are in mortgage rates and 10 year as the fed is hawkish and raising agressively.  @LCHorn is there some other reason for this that I'm not seeing, or do you think that spread reverts to the mean when the fed tells us they are pausing?  or is 3 the new normal when it used to be 2?

Thanks, will hang up and listen. 

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