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Wednesday, January 12, 2011
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33 comments:
Blogger Va_Investor said...
Texas Native,
Are you "Pricedout4ever" on craigs list Housing forum? Same question to Kevin - and are you two the same person?
LOL. Funny. No, I am not anyone else anywhere else. You're not the only one who sees parallel's in postings on other websites.
I've often run across your identical twin in more than one URL or on a bumper sticker.
Plonk!
:-)
what are the hidden dangers of buying a As-Is property?
Tks!
MM,
I purchased an as-is property. The only big thing I learned was that I could not make any portion of my offer contingent upon the state of repair of anything on the property - because it's being sold as-is.
I had an out on the contract with a home inspection, but essentially anything the home inspection found that I wasn't willing to correct/pay for/fix could not be used to bargain.
I would have had to completely cancel my contract and make a new lower offer. The downside of this is, once I cancel my contract, another person's offer can suddenly be entertained again by the seller.
I think I got a pretty good deal. I bought over $100k cheaper than my neighbor did at the peak in 2005, I was under asking price, and both ask and purchase price were under the appraisal.
I have since installed a new roof, windows, electric, had the whole thing painted, and all of the floors refinished. I also had a second appraisal, refinanced again, and have well over 20% equity in the property.
So don't let as-is scare you. Just get a good home inspection.
My $0.02
Hey, dc2, the Peary St house is back on the market - at the same price. Guess she convinced herself that the problem was the season. All 114 days of it.
Peary
MM, I like mytwocents' answer and would add this: the standard Virginia contract has language to the effect that the seller warrants that all the major systems are in working order. Therefore, s/he is obliged in normal sales to make any repairs necessary to get them into that state. However, in an "as is" sale, I believe that this language is struck, so that while some or all systems may actually be in good working order, if one is not, the seller is not obliged to fix them.
ps: "as is" can actually be a good thing if you trust your inspector (which is a big "if" for the average buyer), because many other buyers will be scared off by "as is" and you should have less bidding competition.
Ace,
That's a pretty crucial observation re inspector. I had a price in the back of my mind of what I would pay for the as-is house I bought if it was fully renovated/refinished.
As we went through, the inspector rattled things off and I kept a check list.
You need to upgrade from fuses to a circuit breaker panel - okay, ~$2k.
You'll need a new roof - okay, ~$7k
The windows are old - okay, ~$6k
Plus all of the things I wanted to change (very old/rundown) but were still in working order: bathroom, kitchen, floors, etc.
I tallied that all up and the estimates + purchase price < appraised as-is value < what I would pay for renovated.
So I went for it.
So far, no buyers remorse and it's been a little over a year now.
My $0.02
thanks My $0.02 & Ace.
i find it difficult to come up with a fair contract price in As-Is, especially with old houses, for both buyers and sellers. it almost requires a pre-inspection to determine a fair price.
http://franklymls.com/DC7348394
talk about a letting the air out of the bubble.
2 1BR units, went from 335K to 135K.
What do you all make of this house? The sales record is pretty odd. I don't see how a sale 4 days later and 80K over prior purchase can be a distressed sale.
http://franklymls.com/FX7510434
Liv-
The house looks like it is priced well assuming the inside is nice. I assume what happened was someone bought the house as a short sale for 900K from the person who bought it for 1.2MM. While the house was under contract as a short sale they probably searched for and found someone willing to buy it for more.
"I am not posting with different handles, you deranged kook."
She used to accuse me of being someone on Craigslist as well.
Maybe she thinks everyone is on Craigslist somewhere?
She used to accuse me of being someone on Craigslist as well.
I don't even know where the accusation came from. When I told her no, she then asked me to stop using different handles. It's like two people can - in her mind - share the same opinion if it doesn't fall in line with her own. That would explain her inability to accept any logical argument whatsoever.
Ace,
The realtor improved some of the pictures in display. But once you get there it is still the same house with that awful deck in front of the house. Still overpriced.
Contrarian,
I find the proposed legislation regarding the requirements precedent to foreclosure disturbing.
It seems the main target are the lenders sidestepping the recording fee's that accompany assignments and not the validity of the debt.
This proposed legislation seems to "throw the baby out with the bath water".
I don't know why anyone would cheer this change in the law that, in effect, allows people to live in a property without paying a debt they agreed to and pledged their home as collateral for.
Affidavits by the owner's of these notes should be sufficient absent proof from a debtor that payments are not in default.
I agree that the whole thing is a paperwork mess, but should this result in a benefit to those who are clearly in default on their obligation to pay their mortgage.
A delay in clearing the foreclosures does not benefit the vast majority of the public; in fact, the result is the opposite.
Forebearance will cost the taxpayer through the possibility of further bank bailouts and prevent those potential buyers awaiting a foreclosure opportunity from getting the best price available.
Because Virginia is a non-judicial state we may be ahead of the game in terms of foreclosures already processed.
Again, why is this legislation a good thing?
Did lender's take shortcuts? Yes, but only affecting the technical aspects of assignment. I fail to see how borrower's have been harmed.
p.s. apologies to those who are not posting vile, stalker-type comments on other forums.
VA_I, apology accepted, and I agree with you regarding these foreclosure halts. Just a gift to the rent-free deadbeats who won't own up to their decisions or obligations.
MM, maybe you could talk Va_I into PM'ing you the name of her contractor to do a walk through with you.
Also, for houses that seriously interest you, it may be worth paying for an inspection BEFORE you make an offer, so that you could construct a price that the owner may be more likely to accept. Of course it may mean you are out $ hundreds, and several hours of time, but it is another strategy. During the bubble, a lot of buyers who didn't want to give up the opportunity to do an inspection (since offers with more contingencies would be turned down) did pre-offer inspections so that they could send in a "clean" offer while not putting themselves at tremendous risk. I'll bet VA_I has a great little black book with inspectors' names too.
dc2,
"The realtor improved some of the pictures in display. But once you get there it is still the same house with that awful deck in front of the house. Still overpriced."
That entry and landscaping could have been fabulous. And the galley kitchen with the 1998-style black-and-white scheme (buyers in that range want a large kitchen with an island where guests can gather, and truly beautiful cabinets and counters), and the typical 50's floor plan with its weaknesses. Looks as if she spent her money in the basement instead of on the main living floor and entry.
She should have not overpaid in the first place, and should have knocked down a wall or two and made other choices.
Where do you think the price will end up?
WOW! Shocking situation at one of my rentals. I suppose if you have many that it's only a matter of time before something truly shocking/unbelievable happens.
34 yr old girlfriend died in her sleep (????) saturday night. Freakish, to say the least.
That's horrible. Any idea what happened?
No info,
Boyfriend (fiance) told me this am. He says coroner has no cause of death. These are two highly eduacated professionals. I called the sheriff's office and they said they are awaiting ME determination. Wow. I'm somewhat freaked. 34 yrs old.
VA-
That is terrible!
Intrigue.
I'm thinking it may have been suicide...just devastating. I don't think I'll be sleeping tonight. Very, very sad. I read the obit. What a terrible loss.
Va_Investor,
Not an easy call to take. I went to a funeral over Christmas with a similar situation, but it was a lady in her early 60s. I had just spoken with her several hours before she passed away in her sleep.
struggling to regain middle class security
Not so long ago, Moore and her husband, Seymour, 46, made more than $200,000 a year, vacationed in Fiji and thought nothing of picking up a $400 dinner tab with friends. But then Moore left her property management job to set up a cat-sitting business, and her husband lost his job as an IT consultant nine months ago. They now scrape by on Sondi Moore's Social Security checks, her husband's unemployment benefits and a trickle of money from her nascent business. Total income for 2010: $30,000.
----
I know dozens of people in this fix,
The shit pipe is raining on them, and everyone is cheering about green shoots.
pat,
Some (one?) of those stories is somewhat compelling.
I find it very difficult to have sympathy for a 200k couple that vacations in Figi and spends $400 on dinners out. Now they find that they have run thru their savings after 9 months of unemployment ins. and SS.
This screams lack of prudence and planning. I don't spend that kind of money on meals, clothes and vacations. Perhaps this is why we were able to pay cash for tuition at an expensive university for our son and would have the ability to retire today in our early 50's.
And why would an unemployed mother have to pay her mother $600 per week to watch her grandchildren? And now we are paying that tab.
I always find it quite mystifying that people have no family to turn to in times of need. I can't tell you how many tenants that I have had over the years that run into financial difficulty. I always ask about them about getting help from family and the answer is always no.
I have taken things into my own hands and connected people with the proper services that can help them.
So some of these stories are sad and others are ridiculous. I'm much more comfortable at On The Border or Glory Days than Morton's.
I think expensive cars are a waste of money and can count my manicures on one hand (no pun intended). Guns and butter people.
Pat,
That's a good article.
There's a moral of the story for the young who are now or might someday find themselves making 200K a year.
Pass on Fiji and the $400 meals.
Save.
I know people her age who lived more frugally and who have been retired comfortably for a long time (albeit still active in all kinds of endeavors).
But yes, it's getting bitterly hard for many people.
Pat-
Agreed that unemployment is very high. Green shoot doesn't mean everything is good for everyone instead it just means that things are starting to improve in some areas. I know a lot of business owners, lawyers, and bankers that are doing a lot better than two years ago.
I also agree with Harriet and VA that the person should have just saved. There are a lot of people on this board that make 200+, but I bet almost no one on hear spends 400 on a dinner or regularly vacations in Fiji. My parents for example currently make about 300K and I don't think they have ever spent much more than $100 for dinner and they rarely spend more than $30 for the two of them
HB agree on all counts. Also, it bears reminding, even at the peak of the market, even when times were good and everything was looking up, you could find stories of people down on their luck.
Not to pile on but...
It reminds me of real estate agents that started complaining in 2007 that because sales were down (and prices), they weren't making nearly the commission levels they were before, and couldn't afford the life they indebted themselves to based on insane peak bubble business. It's a psychological issue where (irresponsible) people assume that the only way forward is up, in terms of everything financial in their lives (income, house, investments, etc). They max out the potential of what they earn without consideration of what could happen if that income flow were to stop or decrease. It sucks, which is why you have to plan for it.
VA_I, very sorry about your tenant.
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