All Forum Posts by: Marian Smith

There is a REO listing agent who hires a local structural engineer to do a slab report on apparently any listing with cracks in the drywall. The listing then includes a report that typically measures slope of slab, shows what type of pier placement would remediate slope and states that the superstructure is okay.
That basically eliminates all retail buyers from the get go. So what is that worth? The elimination of retail buyers, I mean.
If your only pool of buyers is one with "buyers with the money to fix a foundation at 15k" and holding costs of over two months due to backlog of drought damaged foundations in area and a reserve to cover the broken pipes, etc which happen when moving a cement slab? And the inclination to take the risk?
What is a reasonable premium to expect the bank to pay you to take it off their hands? How do you come up with that number or do you just decide what it is worth to you?
It has got to be worth a much bigger discount than an ordinary beat-up property as people seem to be very spooked by slab issues.
And also, does a house on a "fixed" slab carry a stigma when reselling?

Thanks for the replies. I guess the problem is I don't want it that bad. I was thinking about offering 70-75% for a house in the 100k range. I had thought of the repair list, but the repairs don't add up to the discount I want :) The price is too high or it would have sold by now, 90 days+.

60% off is a steep discount, Ron. Was the first offer for 25k or did they just take the 30k offer? Foundation problems, termites, rot or just a lot of work?

With today's interest rates it just isn't very attractive for young buyers to go for the sweat equity when for less than $200 more a month they can buy a move-in ready place. And sweat equity costs cash AND sweat.

I am surprised at the answers here. I assumed there were huge problems for banks owning condos in Florida. Condo fees (holding costs) being one and financing for buyers being the other. "Warrantable" condos, which I believe is the term for condos banks will loan money on because they are conforming loans, require owner occupant rates, vacancy rates, complex has to be completely built out, etc... If the buyers have to pay cash, then the buyer pool shrinks considerably, I would assume. Maybe that is why the Fed is so insistant upon proping up Wall St.-- so investors can make money, cash out and buy Florida condos.

Last REO I purchased I offered, I think, 72k on an 89k listing with 90+ days on the market. My rational was something like 1) the listing agreement expired in a week or so, 2)original principal loaned was 76k in 2004 3) had been marked down one or twice and was due for a markdown soon so I might as well take the 8-10k markdown and then ask for more.

I represented myself but I am a new realtor (and I basically got my license because I couldn't find a realtor who would make a bid on a HUD for less than 5%.)

So.... REO World told the listing broker that they couln't go below 78k without "going to the bank management". Which they ended up doing.

Listing broker implied that the "thing to do" is to wait until a listing is reduced to within 10-12% of what I am willing to pay and then make an offer. But he was very nice and happy to unload the dog.

So it sounds like the asset managers have a certain window for which they are authorized to take less than list price. Either that or they always say they have to go to bank management like car salesmen do just to test your negotiating skills or resolve.

I have been looking at the MLS solds and I just don't see that many large gaps between list price and sold price.

I am under the impression that HUD home will go for 87% of list unless they have been sitting there for a couple of months because HUD would rather reduce the price and try to get more competition--so I guess for a HUD that has been on the extended list for 2 months you could offer list minus 10% or whatever the usual markdown is and then something above 87% of that number.

But what about the banks? Any magic numbers? Is BOA more desperate than Chase or viceversa? Also, my last offer was cash. What is that worth? And is a preapproved loan with Chase for say 75k accompanied with a copy of an untapped HELOC for 100k and a brokerage account statement with 100k in assets and an offer Not Contingent upon loan approval as good as a cash offer?

DePotier? on Design to Sell never, ever places a couch in front of a window, maybe two chairs flanking it. Big no, no on her show.
And people like symmetry, so the twin bed partially covering the window bothers me. Also makes it seem the bed doesn't fit. Nitpicky, but you asked.
Model homes around here always have a theme in the kid bedrooms. I am told it is to help buyers looking at lots of homes remember "the house with the surfer bedroom." Not recommending a theme, but maybe something somewhere a little out of the ordinary to differentiate your house in the buyers' memory. I used to see breakfast tea trays on the master bed, for example.
All in all, very nice house.

Cellulose 5 years ago, husband fed the hopper and I blew it in place. He looked like a teddy bear at the end. Called 3W Insulation for a bid this summer. Had 13 inches of fiberglass installed on another house for the price I paid for materials last time--it was actually cheaper, I think. I'm in Austin and it has been over 100 for 6 weeks I think, so it was a good buy.

Ask a mortgage person. My insurance company is Amica and they will not insure more than 4 properties including my home. Fannie and Freddie have a limit to how many loans they will insure/buy or whatever they do per investor. So over that number would be "non-conforming" but I cannot recall what the number is. Ask a loan person. It may just come down to your cash reserves and the property appraisal--buying and renting to your dad who has guaranteed income doesn't seem risky to me and it may not seem risky to an underwriter either.

Gary Eldred is a Phd and was on the faculty at Stanford business school. He wrote "Investing in Real Estate." It is not an inspirational book like some of the others, but just explains the whys and hows, etc. in plain language written for someone who can read at the collegiate level. Smaller print and packed with information.
Also, print off an IRS 1040 schedule d or e or whichever it is and read the instructions on how to report rental income.

I like to spray with Brush-be-Gone or Roundup and then spray any new sprouts during the growing season. Once the tree is dead let it rot a year and then just yank it out with your bare hands.

I actually haven't turned the utilities on yet, so I don't know if I've got a big problem or not. One thing though, my insurance company, Amica, wouldn't write me a policy because i didn't have an inspection so couldn't estimate the roof age, etc. Cost me an extra $300 a year to go with a "subprime?" insurer. Actually, part of the $300 is due to the house being vacant, but when it is rented I can switch to a lower priced policy, but not $300 lower.
I would have liked to have an inspection but I wasn't going to pay $500 without utilities. Plus, I didn't think the bank would be very open to more negotiations. I may have left money on the table, but I just felt like I might nix the deal if I came back for more. Comments?
Also, I felt that once I had a 10k reduction that it left me some room for a new hvac or whatever was wrong. I did call the MUD office and they assured me that the water bill for the house was stable and very ordinary in price.
I might add that my final price was 56% of a house that sold a few weeks later directly across the street. 50 sq ft larger and, of course, in much, much nicer condition.