Current Advice from Real Estate Agents

[bogey21]

HELOC's will return - when it makes sense. Maybe 2022 at the soonest? Right now, for most folks, they are better off doing a cash out refi. That will change when they have their 1st at a rock bottom rate which they would not want to disturb, but still want to tap into their equity.

Makes sense to me...

George

 

[littlestar]

We are having national companies swoop in and outbid home buyers in our Midwest area. The first thing they check is if your neighborhood allows rentals. Then they bid $30,000 and $40,000 over list and afterwards they rent the houses out. I am worried about my neighborhood changing because of this trend. Also worried about affordability for young families.

 

[Snazzylass]

My wife is a manager for a real estate company and out of state buyers were putting in offers on several homes before ever setting foot in the State and getting them under contract
Then once in town they would pick the one they wanted and find a reason to cancel the rest

Where is the Earnest Monies? What agent would write a contract without a deposit and a real one? My dad used to tell me that local agents would write contracts with a $50 check from the buyer. No way! Sounds like the local agents in your area are doing something just as dumb.

 

[Snazzylass]

We have not taken a mortgage in the previous 2 homes which we owned. With the home we just closed in January, we decided to take a mortgage to make use of the low interest rates. The bank was very thorough and intrusive and we almost decided that it was not worth the angst and just pay for our home in full and not take up a loan.

Yup! Since 2010, documentation for retired and self-employed is extensive! In the past year, rates have never been lower. Also, in the history of mortgages, documentation has never been more intense...especially for the 2 above groups, and especially for Jumbo mortgages

Still, it was likely your trouble! You likely locked up an amazingly low fixed rate in what will soon become a very inflationary environment. Good move!

 

[Snazzylass]

We are having national companies swoop in and outbid home buyers in our Midwest area. The first thing they check is if your neighborhood allows rentals. Then they bid $30,000 and $40,000 over list and afterwards they rent the houses out. I am worried about my neighborhood changing because of this trend. Also worried about affordability for young families.

Grrrr....I hate hearing this and I know it is true! Historically, only about 10% of single-family homes were investor-owned. Currently, it is 25% and this has been ruining the affordable end of the market for years. Worse, it does hurt the neighborhood! That's why lots of HOA's have limits on non-owner occupied and how many properties an investor can own in a community.

There are maybe 3 million homes with delinquent mortgages. It is expected that many of these will come on the market starting at the end of the year. That sounds like a good thing! Unless they are scooped up by more investors

 

[VacationForever]

Where is the Earnest Monies? What agent would write a contract without a deposit and a real one? My dad used to tell me that local agents would write contracts with a $50 check from the buyer. No way! Sounds like the local agents in your area are doing something just as dumb.

These days the agents use a link for the buyers to enter their bank account info for the earnest money. Since buyers are given a specific period for due diligence, in our state it is 14 days, they can back out without giving a reason and get their money back.

 

[joestein]

Makes sense to me...

George

We currently have a HELOC. We will be closing it with the sale of our home, but we will get a HELOC in the new home. I discussed this with my bank and they said they will not be a problem. We don't have any immediate needs for money, but use it as a overdraft account plus for emergency.

 

[joestein]

These days the agents use a link for the buyers to enter their bank account info for the earnest money. Since buyers are given a specific period for due diligence, in our state it is 14 days, they can back out without giving a reason and get their money back.

I would NEVER provide my bank account information in this manor.

 

[Gypsy65]

Where is the Earnest Monies? What agent would write a contract without a deposit and a real one? My dad used to tell me that local agents would write contracts with a $50 check from the buyer. No way! Sounds like the local agents in your area are doing something just as dumb.

They’re getting the money but they are also able to cancel for any reason either seen before or after inspection and get the deposit back
These are higher end homes ( some in to the millions ) so putting money down and paying the inspection fee is a small cost in the bigger picture of getting the house you want in the current market

 

[Snazzylass]

These days the agents use a link for the buyers to enter their bank account info for the earnest money. Since buyers are given a specific period for due diligence, in our state it is 14 days, they can back out without giving a reason and get their money back.

Ugh! That is utterly pointless

 

[Snazzylass]

They’re getting the money but they are also able to cancel for any reason either seen before or after inspection and get the deposit back
These are higher end homes ( some in to the millions ) so putting money down and paying the inspection fee is a small cost in the bigger picture of getting the house you want in the current market

That doesn't sound like Earnest Monies. Same with @VacationForever's post. Sounds like a prescreening method to make sure someone is qualified.

 

[VacationForever]

I would NEVER provide my bank account information in this manor.

This is standard practice in Nevada. The link is created by the escrow lawyer.

 

[joestein]

This is standard practice in Nevada. The link is created by the escrow lawyer.

still wouldn't do it. Either they accept a check or a wire.

 

[VacationForever]

still wouldn't do it. Either they accept a check or a wire.

They get your bank info when you wire or write a check anyway. I bet you won't be buying a home here in Nevada.

 

[Gypsy65]

That doesn't sound like Earnest Monies. Same with @VacationForever's post. Sounds like a prescreening method to make sure someone is qualified.

What do I know?
My wife manages a real estate company and I know this is a problem
I’m not sure it’s at their company as they deal with a different bracket of clients

I do know. Money is put down on more than one home which is legal and they cancel the ones they don’t want which is also legal

 

[VacationForever]

That doesn't sound like Earnest Monies. Same with @VacationForever's post. Sounds like a prescreening method to make sure someone is qualified.

Pre-screening only establishes whether the person can afford the home. Due diligence period allows the buyers to back out with no penalty. Every state is different but as a seller, I hang on the edge of my seat counting down due diligence period and HOA review period, which is another 5 days after HOA is given 10 days to send the package to the buyers. When both periods have passed, the buyers are obliged to complete the purchase.

 

[joestein]

They get your bank info when you wire or write a check anyway. I bet you won't be buying a home here in Nevada.

Actually my in-laws would like to buy a retirement home near Las Vegas and we are pretty close, so I wouldn't write it off completely. However, who knows what our plans will actually turn out to be 10-15 years when we both retire.

 

[PamMo]

For the not so good news, if you’re trying to buy a home and keep losing out to other offers, you might be competing with foreign investors. An interesting read/podcast in the Wall Street Journal this week discussed how foreign investors have stepped into the single family home market big time. It’s weird to think your next door neighbors’ homes could be owned by a sovereign fund.

This is behind a pay wall, but you can hear the podcast for free.

www.wsj.com/amp/articles/that-suburban-home-buyer-could-be-a-foreign-government-11618306380

Google Podcasts is no longer available

podcasts.google.com

 

[VacationForever]

For the not so good news, if you’re trying to buy a home and keep losing out to other offers, you might be competing with foreign investors. An interesting read/podcast in the Wall Street Journal this week discussed how foreign investors have stepped into the single family home market big time. It’s weird to think your next door neighbors’ homes could be owned by a sovereign fund.

This is behind a pay wall, but you can hear the podcast for free.

www.wsj.com/amp/articles/that-suburban-home-buyer-could-be-a-foreign-government-11618306380

Google Podcasts is no longer available

podcasts.google.com

At least in our city, realtors told us that most buyers are from California, Oregon and Washington states and are people making the move into our state. They have not seen evidence of foreign investors.

 

[Gypsy65]

I’m not saying the foreign investors thing isn’t happening but it seems that a scenario like that would take place when the market drops and foreclosures rise
Which is what I expect to happen in about a year
So many people who have hung on with hope are not going to be able to recover

The World for the most part went on hold, at some point the banks are going to want to be paid

 

[PamMo]

If you're interested in a broad perspective on real estate, there are some good articles in The Real Deal - therealdeal.com

There are several articles on who's investing billions of dollars in single family homes for rent. It's everyone from California State Teachers' Retirement System and Canada's Public Sector Pension Board, to Singapore's sovereign fund, Germany's Allianz, to Brazilian investment firm Leste, and beyond.

While foreign investors are not the main reason for high home prices, the competition for limited supply doesn't help families hoping to get a good deal in this market.

While the shortage was exacerbated by pandemic-related moratoriums and investors turning starter homes into single-family rentals, the main problem stems from a lack of housing production over the past decade, according to the report. “This is what you get when you underbuild for 10 years,” said Sam Khater, Freddie Mac’s chief economists.​

​

While demand for homes usually decreases during a recession, giving builders more time to build, the pandemic had the opposite effect. Some people fled the city, opting for more space where they could work remotely. The pandemic also led to supply chain delays that slowed down construction of new homes. Now, home builders would need to construct as many as 1.2 million single-family homes per year to meet long-term demand, a National Association of Home builders chief economist told the publication.​

 

[joestein]

For the not so good news, if you’re trying to buy a home and keep losing out to other offers, you might be competing with foreign investors. An interesting read/podcast in the Wall Street Journal this week discussed how foreign investors have stepped into the single family home market big time. It’s weird to think your next door neighbors’ homes could be owned by a sovereign fund.

This is behind a pay wall, but you can hear the podcast for free.

www.wsj.com/amp/articles/that-suburban-home-buyer-could-be-a-foreign-government-11618306380

Google Podcasts is no longer available

podcasts.google.com

I am in the real estate fund biz. Generally, we only purchase single family homes when they are next to or in between a investment we already own. Often the reason is so that we can control (stop) any development next to our investments. Very occasionally we want to build out an existing investment and we buy a SFH to expand.

However, we have yet to buy SFH as investments themselves. I can only imagine the record keeping that must be done for all these entities. When we buy an apartment building or a Multi-Family it is generally one legal entitiy. Imagine 200 SFHs instead of one Multi-Family developement. 200 sets of RE taxes, utilities, monthly bills, etc. 200 seperate legal entities. 200 tax returns - depending on how set up. How about an audit? 200 separate entities consolidated? The scope of the work is insane. No thank you!

Joe

 

[joestein]

I do see a lot of foreign investment in RE. However, I see it in large commercial or multi-family investments funds. There is so much foreign money coming in that some domestically controlled partnerships can't accept any more foreign money.

 

[Sugarcubesea]

I'm still trying to buy a place in FL, we wanted to downsize in MI, but after 38 failed bids and with only 5 years left till I retire, we have decided to stay where we are at. In the last year I have bid on 43 properties in FL and all have gone so far over asking price that I can not stomach paying $75K to $100K over asking. I really hope things start to slow down just a bit...

 

[JanT]

Some of you will remember we sold our house in 2020. There were a couple of reasons we sold - one of them was we wanted to travel and the other was our neighborhood had a couple of lunatics in it. That house was our dream house but the neighborhood was just volatile because of them. We decided to get out. (And glad we did because it’s worse now). We thought we’d travel and ultimately look for another house down the line. Well obviously traveling is much more difficult due to Covid so we’ve been searching for places we might want to live.

Thankfully, our house hunting saga has come to an end. After traveling here, there, and everywhere, we decided to stay in this “little” town that we love here in Texas. I can’t count the number of houses and developments we looked at in Nevada, Arizona, Florida, and Texas. We’ve made several trips again and again, trying to find somewhere we felt was right. Nothing ever felt like the right decision and/or nothing lined up the right way - until about 2 weeks ago.

We were at lunch, still running ideas through our heads, when I looked around and said, “I really love it here.” My husband said, “Me, too.” We both looked at each other and said, “Well duh!!” We finished lunch, went over and looked at two houses under construction that we’d looked at several times that week, went home, and called the developer’s realtor and made an appointment for the next day. We’d made up our minds to make an offer on their home and agreed that if it was sold before our appointment it just wasn’t meant to be.

We met with her the next day, talked about a reduced price since we didn’t come in with a realtor to which she said they wouldn’t do. We went over a bunch of info on what was going on the house and I wrote down our offer price on a piece of paper, waited for her to take a breath and slid the paper over to her. I told her it was our one and only offer and if they accepted it we’d sign the contract right then. She didn’t think they would accept it so, we just said “Ok.” She had to call the developer and she was surprised when they made a counteroffer that met us halfway. So, we accepted that with the condition we could change the kitchen countertops and the ugly tile they’d chosen for the bathrooms. LoL The house will be done in May and I feel so much better just knowing we made the decision where we want to live. I feel like a thousand pound weight has been lifted from my shoulders.

Our dream of traveling significantly is a little muted due to Covid and I’m ok with that. I’ll be busy enough getting the new house together and we’ll work in the trips we want to take along with some general U.S. travel.

The hunt is over, life is good, and I feel more relaxed than I have in two years.