New answers tagged

10

It's a fixer-upper that would require quite a bit of work on the inside. There's your answer. They want cash offers only because they know most banks would never agree to finance the property in its current condition. Think about how a mortgage works: the bank puts up their money now for you to buy a property. In turn, you promise to pay them back later. If ...


-3

In addition to the information provided in the other answers, I'd add some other reasons. Another factor is that you can list with a deadbeat realtor who doesn't show your property much. Then, you're tied to a realty agreement and stuck in limbo. If you sell for cash, you eliminate the realtor's commission. I've sold a few homes for cash and with no ...


13

Mainly they just don't want to get into contract with someone who may fail to get a loan, and therefore not be able to close. This is partly about you, but may also be partly about their house: some houses are hard to finance because they are in poor condition, and the seller may know this. Not necessarily a 'red flag' - it might just be that the seller is ...


56

This situation is the reverse: why would a seller require a cash offer? Is such a requirement fairly common, or a red flag? I can think of several reasons they could only be interested in cash offers. They want to sell/close quickly. They've been burned in the past when selling to someone using financing that fell through, and therefore will never do it ...


19

They want a cash offer because they don't want to wait for an appraisal for the lender. They also don't want to wait for the loan approval process. It might be a red flag. Especially if you also skip the home inspection.


0

You would think that an estate agent would try to maximise their commission. But they don’t actually, they try to maximise their commission they get per week. If they can spend two days to get commission on a $300,000 sale or three days on a $325,000 sale, the two day sale is much better for them. It’s in their interest to do the sale with the least effort, ...


0

There is a gold-standard process for trading real estate. It protects all parties and does a very good job. DON'T deviate from it. Don't "part it out" i.e. pick and choose which parts you want to bother with. Just do it. Straight up. In the USA, real estate sales are normally done without a lawyer, but with a Realtor who serves as your buyer's ...


3

In addition to what others have mentioned, consider using a title company to handle the transaction. Not only can they offer title insurance, they handle other important aspects of the transaction as well, like ensuring that all required paperwork is completed and filed with the appropriate authorities, verify the seller's property description against ...


1

No... But you have to know the code, song, and dance. They want to help you but they are not looking at you long-term, they are looking at their service to you. I have worked in real estate, sold houses, and owned multiple homes. Some advice to handle agents: Do what you want. Do your research and set the price where you want it. If selling do not let ...


1

This is an instance of a buyer's agent being able to provide a very valuable service. Presumably this property has been listed for some time and the seller's agent is very motivated to have it sold. It is likely that they will have a sidebar conversation with the a buyer's agent and know what price will get the deal done. This will be done very ...


1

As a Southern California Realtor, I can definitely say if you can buy a house on your own, do it. For no other reason than to keep your finances separate, but also because you lose the ability to use some programs if you have already purchased a home. If you have a good credit score and can cover 5% closing, why not go conventional? The only reason would be ...


0

Depending on your contract, you may pay a fee per day beyond closing. Typically what will happen, at least in my California experience, is you will be given a notice to perform when the closing should have happened. That usually requires you to complete the transaction within 48 hours of receiving the notice or you forfeit the earnest money and the contract ...


0

In many cases, the commission is split evenly between the buyers and sellers agent. That's not always the case, and there are many transactions where the commission is a set dollar amount. In the Southern California area, the average commission is 4.92%, typically at about 2.5% for each agent. The buyer's agent has a difficult task. Get the home for the ...


0

This is a moot point. Its easier to just negotiate a lower price, whether agents are involved or not. Ultimately it still all boils down to what you and the seller agree on. If the seller is unwilling to negotiate through offers to buy then its probably better to walk away.


1

Ultimately, the price you pay is what is agreed upon by you and the seller. The Broker/Agent commissions are paid out of the sale price; so you don't really save any money. However, there are always properties "For Sale By Owner" and you still have to determine how the fees for transferring the deed get paid, as well as taxes. The default is that ...


-1

The agent is paid a commission, based on the final sale price of the property. Negotiation of that price and the terms of the sale is between the seller and buyer and any financing organization involved. The incentive that exists for the agent is in getting a higher price for the seller; hence a higher commission. However, there are laws in place to protect ...


4

A more general question, why do sellers reduce the price? Sellers reduce the price for many reasons: They are approaching a deadline, and they need to sell. Hardly anybody even looked at the place Other properties are now on sale, and this lower price positions themselves better. Of course there are risk when you lower the price. People assume you can go ...


28

The ownership of the land should be registered with the local government. As an initial check you should see if the listed owner matches the information you were given. But even that isn't enough to protect you. You will need title insurance. If you will have a mortgage, and be pledging the property as collateral, the lender will insist on it. Regardless of ...


58

You are looking for Title Insurance. Basically, you pay a lawyer to perform due diligence to confirm that yes, the land is registered to the counterparty, without any outstanding debts registered against it, and if their search is incorrect, you have insurance that protects the value of your purchase. Calling the named law office offered by the seller [...


-1

Securing a tenant is a strong commitment to a course of action, and in that sense creates an opportunity cost because it forecloses other options you might have, such as selling or moving in yourself. You lose out on a little bit of income in exchange for keeping your other options open.


2

Plans change. Perhaps it has been the owner's intent to move in "next month" for the past 11 months, but they have been unable to do so for one reason or another. To go through the trouble and risk of getting a renter for just one month might not make much sense. If the intent was not to let the property sit vacant for so long, the vacancy is ...


5

One comment I have not seen posted yet -- I would argue that as a buyer's agent, among the most valuable things is remaining on your good side so that in the future when you are moving, you will choose them again to act as your seller's agent. Thusly, it is worth taking a little longer to work with you as a buyer to remain on your good side so that they not ...


0

In my experience, many realtors will refuse to deal with your property if you're trying to sell it significantly above the price estimation they give. Quite obviously, they are not trying to maximize their commission from a single deal, because they know such a sale will last forever. They will keep losing money while organizing visits of the property, and ...


4

Assuming you're not interested in (or able to afford) a wide range of prices above what you're looking for, this conflict of interest is minimized. This is because the buyer's agent (your agent) is not trying to sell a particular property and looking for the highest commission they can get for it. They're trying to arrange for a particular buyer to buy ...


0

tax to pay is under "tax", land means the evaluated price for the land currently in the market and same for additions=everything built and invested there....so land+additions=market price( theoretically) and from that the property Tax is calculated...that is found under the collumn"tax/property tax" and is a % of the estimated market ...


70

You're correct, but it's actually bad on both ends with the commonly accepted approach. The incentive for both agents to get the highest possible price is outweighed by the incentive to do as little work as possible to sell houses quickly. Doing extra work to sell a house for an extra $10k means a paltry $300 extra commission (standard 3% for each agent). ...


10

The main incentive of the buyer's agent is to get you to buy something as quickly as possible. They do not have much incentive to help you buy a property that meets your needs or to get you a low price. In my experience, a buyer's agent does not add much value, and your best option is to use an agent that shares the commission with you (like RedFin).


3

Some tenants are hard on houses. They paint the rooms weird colours, they cause damage you can't get back from their deposit, they go without paying the rent for months at a time then leave unexpectedly, leaving a mess behind you have to tidy up. If you only plan to have the house empty for 6 months, getting tenants for supposedly a year is likely more ...


0

This is one of the oldest ones that still offers this service: https://www.forsalebyowner.com.au/ Some of the others don't seem to be around anymore.


2

It depends on a lot of factors. In addition to the taxes & maintenance expenses already mentioned, you have to deal with the fact that house prices are driven by supply and demand. Looking at this century, buying a house in say Detroit would give you far different results than buying one in San Francisco. So can you reliably predict your local real ...


5

As a landlord myself, I can tell you that the eviction moratoriums have us all being a lot more cautious when screening potential tenants, because it is very difficult to get out of a bad tenant situation right now. That said, a year is an awful long time to sit on a property without income. If they bought the house as a flip they might be timing the market ...


7

Home prices peaked in 2007 and then started to decline because of the 2008 Global Financial Crisis. In 2008 the Fed began Quantitative Easing. Median home value lost about 30% of their value over the next 3 years and it took another 6-7 years to surpass the 2007 high. That period demonstrates that it's not true that: When the government starts to do "...


3

Tenant rights in major cities can be so strong as to incentivize vacant housing. A interviewee in an academic study believed rent control increased vacancy as landlords either remove units from the market (to avoid the regulation) or take longer to find the right tenant because you only get “one bite at the apple.”


2

I would shop around. The last three refi's I did (in Illinois) didn't require an in person appraisal. When I purchased, I think the appraisal fee was around $400. You may not need an appraisal at all, depending on your equity, and even if you do, $1870 seems exorbitant. It's so high that maybe $1870 is the total fees, part of which is for the appraisal. I ...


0

In almost all cases the lender will require an appraiser. And in almost all cases they want one from their network. In some cases if the equity in the house is large they might waive it, because they perceive their risk is low. But in most cases their standard procedure requires it. If you are refinancing with the same lender they might drop the requirement ...


0

To directly answer your question. A property manager will generally take about 8-10% of your monthly rent and 1-2 months rent for every time they find you a new tenant. That is the impact of not managing your own properties (whether in or out of state). If the other state has a state income tax you may also incur costs there (but not always). As the other ...


1

I don't think 29 days would be a problem. Has a lender told you it isn't possible? I'd ask one or more lenders to confirm. If they can do 29 days, then great, no issues. (This is my expectation.) Update: I just asked a friend of mine who is a mortgage broker in Illinois what's the fastest he could do, and he said 15-20 days. So call some brokers ASAP. But ...


1

Having a management company take a cut out of every payment will make it harder to generate a profit each month based on the income from rent and the committed expenses for the mortgage, real estate taxes and other known items. Having a management company does transfer the time requirement of responding to the care and maintenance of the property to the ...


3

Yes, you can use FHA loan for an investment property, as long as you live there as your primary residence. This is called duplex investing or house-hacking: https://www.millionacres.com/real-estate-financing/articles/how-i-used-fha-loan-buy-my-first-investment-property/ https://www.mrmoneymustache.com/2020/10/23/house-hacking/


5

I want to invest in real estate for the purpose of renting or using as an Airbnb to help establish future financial freedom. I'm trying to understand if it would be a wise financial decision if I were to get an FHA loan on an investment property while my girlfriend were to get a loan on another property where we would live. You will be required to live in ...


5

"Wise" is very subjective. Some on this site (me included) would not call going into debt for $250K ($500k between the two of you) to buy an investment property "wise". Especially before you graduate and have a good job. I would call it "very risky". You might be okay and end up with two great properties that make you a ton of ...


1

I've recently purchased an out of state rental property. I'd like to be ahead of the game and fully grasp the concept of depreciation so that when tax season comes around, I won't be clueless. ... Also, based on my what I've been reading, does this mean I get a check from the IRS for $2,178.03? I am not going to address the math involved in calculating the ...


3

If do $63,500 * 0.0348484848 = $2,178.03 - Is $2,178.03 the correct amount I can write off in terms of depreciation on my rental property? No, it looks like you've applied the half month adjustment to every year. You've got 330 months to depreciate the entire improvement cost (houses are viewed as improvements to the property/land) Monthly depreciation = 63,...


6

The estate agent is working for the seller, and most agents are paid a commission that is a percentage of the sale price. So it's in their interest to get as much money for the flat as they can. They aren't supposed to lie to you, but if they can give you the impression that the seller isn't interested in low offers, then they will. You can make any offer ...


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