All Forum Posts by: Matt Eilers

Appraisal- done due to satisfy the bank's requirements to lend on the property and your peace of mind.
Since a bank is out of the mix, it comes down to do you want to spend the money to see what an appraiser says?

If you are content with your due diligence on prices around you, then totally up to you.

Finance now vs. refi later?
I would talk to a bank and see what the fees are for the 2, if there are interest rate differences for the type of property you are buying, basically see if there is an advantage to finance now or later.

I am of the opinion that rates are going up, so if it was easy to get a loan now as opposed to later, I personally would get one now as I think the rates now will be lower than in a year. But that is just my own speculation.

Sounds like there are some other variables to factor in for yourself.*
This does not sound like an investor deal for you, it sounds like you are buying a primary to live in for your family.
What you need to figure out is
1) state of your market (still down, flatlined, moving up)
2) if this is for you to live in, I assume you are renting now. Figure out Rental costs vs. home ownership costs
3) quality of living in this house vs. rental
4) you stated that you have seen many many places and this appears to be the best one.

I guess my ? is, if you like it and you stated the comps (while hard to find) seem higher, why did you set a price limit of $165K (due to lendor saying this was the max you could qualify for or is it more that you wanted to feel like the bank was going to come down some so it felt like it was a deal?. In other words, if it was listed for $185K instead and you offered $155K and they came down to $172K, would you take it as it seemed like you drove a hard bargain?

Assuming you financed the remaining $7,000 (172K-$165k you want it at) at 5.75% over 30 years, the difference is ~$41/mo.
Again, perhaps your area is still dropping (like most areas) in value, but it seems like you should find this out as it appears you have done a fairly good search so far.
If this was an investment deal, then by all means make the numbers work, but if this is a future home for your family for years to come, make sure you know the market well as if you happen to be in a market that is in an upswing, you may end up chasing the market and settling for something less in the future. If your market is dropping, then let the market come to you.
I would still go back at $160K or whatever and list items that you feel need to be addressed and that at this price, you would be willing to address these items.
Also, see if your agent can pull Sales in the past 3 months with specs similar to this house to see what the sold comps went for as well as for you to look at pics. While difficult to compare pics to a house you have seen, you might be able to figure out if the house is over/under valued.
Finally, ask your agent to pull up any similar specs that you are looking for of homes that Expired recently. If any are of interest (via pics or write-up), drive by them to get a feel for the neighborhood. If interested (I would normally say contact owner directly, but since you have started into a Buyer's agreement with an agent I assume) have the agent call the owners to see if they are still interested at selling. May turn something up that is not currently on the "active" market.
Good Luck!

No need for an agent as Seller will not want to pay and it sounds like neither will you.
Earnest $ goes to title company and held there.

Call a good home inspector prior to writing up contract (if you have time) and see how soon he/she can get out to the property. Then use this as a guideline for your Home Inspection Date and Resolution Deadline.

Not sure if you are financing, but if you are, ask lendor how long they need for a comfortable closing date as well as a Loan Conditions Deadline and the Appraisal Deadline. (I assume IA contract my not have exact same wording but something similar.).

Once you are under contract, you are now under the whims and availability of
-Home Inspector
-Appraiser
-Lendor
Lendor will hire Appraiser. Talk to Home Inspector and Lendor to see what dates they recommend putting in so they can accomplish what they need to to satisfy the contract.

Good luck

How long has this been on the market?
Doesn't seem like they are moving much (with their counter). If it hasn't been on the market long, they may not be overly motivated to drop yet.

Counter their counter with another price ($160K or whatever you and your agent think), put in a list of items that you saw that needed to be fixed and an estimate of what those costs would be.
If you didn't, a pre-approval letter might be helpful to show you are serious and good to go if the contract is excepted.
Perhaps moving up the closing date (without knowing what you put), perhaps a motivating factor for the bank is just clearing this off their inventory list.

Best of luck.

Hi Brady,

I think it would be a good move to get your license.

Pros:
MLS access- you are now at a competitve advantage over others as you see immediately when a property comes on the market, goes up/down in price... From the MLS, you can get a pretty good gauge on the market yourself rather than asking a realtor. Being in the profession myself, it is somewhat scary how many realtors cannot figure out the market based off of hard numbers or even use a basic loan calculator.
Can also get into any property you want to compare or just look at without having to call a realtor.

Cons-
Not many. you will have to take the required education per your state's requirements. Pass tests.
You will have to carry E&O insurance, pay monthly MLS fees and usually a larger yearly fee as well (varies depending on the MLS). You should be able to locate your local MLS and ask them about fees.

Usually, you also have to hang your new realtor license with a managing broker for a certain amount of time (here in Colorado it is 2 years). Then you can go solo. The 2 year period is supposed to be so someone can watch over you, make sure you are not messing up contracts...

Also, you are required to take continuing education classes.

So, there are fees involved, but we are not talking anything huge.

As for commission splits on personal deals. This is something you would negotiate between you and your future managing broker. In a few companies I have worked with, personal deals only cost $500 rather than the regular commission split.

Spits- these can vary across the board depending on the company. Some are tiered where they bump up the more you sell.
70/30 is a decent middle point for commission splits with your future real estate company on any other deals you may do with regular Buyer/Sellers

Are realtors going to pass you up on great deals because they will have to split their commission?
Not sure if I am following. Now that you have access to the MLS, you have all that information as well. A realtor who knows you might be a potential Buyer who has a good deal may still call you as at least they will get paid as the Listing Agent if you buy their listing.

Plus, even if you have a regular job and only use this for yourself, you may still be able to help a family member or friend and either save them some $$$ or make $$$ if you choose to take the commission.

I think there are more pros than cons but you will have to go thru your state requirments for getting a license and yearly fees for having a license. But the access to info is well worth it.

Best of Luck!
Matt

1) Watch after rental properties. Job is real estate agent (although, in this economy...have a lot more free time :-)
Which is fine as my wife and I just had our first, baby girl, a year ago.
2) 7+ years
3) 2 townhomes, 1 SFH, partial interest in land in New Zealand
4) reading (books, articles, sites like this...) wish there was a REI club close by
5) Understand more about MFH

I really liked the presentation. I caught his presentation about 5-6 months ago in Frisco.
Stewart Title is e-mailing out this slide show presentation, i just wish they would record and post the audio as well as a lot of his information is not contained in the slide show which is what they will be e-mailing out to attendees.

I just saw a stat that Las Vegas had the 2nd or 3rd highest rate of job losses in the past year.
If that were true, I would think that the real estate market would still have some drop in it (how anyone comes up with 30% is beyond me though).

I think that his (jones) concerns were
1) job gains, lead to real estate moving. Real estate moving leads us out of economic downturn
2) he is worried about the HUGE debt but shows historically that we are adding to the debt just about the norm for other downturns. He is worried about how we will pay for the debt as the numbers on the interest payment of our sized national debt are mind boggling.
3) devalued dollar= Big uptick in oil prices. $3-5 gas impacts everyone on a daily basis.
He wasn't on board with our no drill policy (or whatever our policy is, that part I kind of missed). I know that is affecting the western slope of Colorado
4) how commerical will pull thru. Do not remember the stat but the money is not there for commercial loans. They will either be called (and who has the money to pay?) or they will be done on new terms, problem is, most requirements still need 30% down and if you bought 05-07, you are probably underwater and will have to come up with 30% cash in order to get the new loan
5) interest rates moving higher.
He said interest rates were easy to predict because all you had to do was follow the price of a barrel of oil. This all changed roughly 5-6 years ago when Greenspan kept the rates VERY low as oil moved higher. He actually thinks Bernake is doing ok by bumping up rates as he believes it needs to be done.
6) predicts more banks will close (i believe more than what have already closed) due to the commercial market going to heck
7) listed some "unforseen" items such as another pandemic that would halt travel which would further crush resort destinations.

While he said we were in for a tough 18-24 months, it really seemed like this would last longer as IMO everything he presented (minus the pandemic or terrorism) seemed to show that we have a lot of forces htat were converging to form (maybe not the perfect storm) but at least a fairly nasty one.

Ted A- caught his presentation in Breckenridge on Friday. Sounds like he presented in Vail earlier in the day and was on his way to Denver after us.

I went to an economist's (Dr. Ted Jones) presentation a day or 2 ago. He was basically saying that it has been bad for the past 2 years and he expects it to be another difficult 18-24 months due to
-Alt A
-Commercial Market blowing up
-he believes interest rates will start rising by 1-2% over the next 2 years
-weakening dollar will cause oil to be more expensive (as it is bought in US $, so he expects a return to HIGHER gas prices as well.
-job losses still occuring
*was a somewhat bleak picture, but it was hard to argue with what he was presenting statistically

He was positive in the fact that he believes now is a great time to buy as he thinks it will be the best buying opportunity we will have see in a really really long time. Just have to be able to survive it though.

He does a blog which you can follow if you google his name. Type in "housing market" to the search for a few interesting reads.