Real Estate Crash thread

**AdironRider** · 03-12-2021, 01:17 PM

I think a lot of first time homebuyers are getting scared away also with the 20% down payment .... that isn't a requirement.

You can get a conventional all the way to 5% for a down payment, and yes while you might pay PMI, just refi it in a year or two.

The entire concept of putting 20% down, so you can sell if the economy tanks (aka the worst time to sell and you still are going to have to live somewhere) and lose all that money anyways seems silly to me. If the shit has hit the fan that bad for you, you are losing that money either way. Might as well just put the 5er down and get in the game.

**Danno** · 03-12-2021, 01:24 PM

Originally Posted by dunfree

This thread is the same shit stuck on repeat.

I hope that you didn't just figure this out, 15 years in.

**schuss** · 03-12-2021, 01:24 PM

Originally Posted by liv2ski

Yup, Prop 13 FTMFW.

You realize it totally fucked over municipal funding and housing movement, right?

**skaredshtles** · 03-12-2021, 01:28 PM

Originally Posted by schuss

You realize it totally fucked over municipal funding and housing movement, right?

Naw, man... all that money they're saving on property taxes will trickle down, don't ya know??

**gretch6364** · 03-12-2021, 01:30 PM

Originally Posted by Danno

I hope that you didn't just figure this out, 15 years in.

I post the same thing more or less every couple years in this thread....lol

**char_** · 03-12-2021, 01:49 PM

Originally Posted by AdironRider

I think a lot of first time homebuyers are getting scared away also with the 20% down payment .... that isn't a requirement.

You can get a conventional all the way to 5% for a down payment, and yes while you might pay PMI, just refi it in a year or two.

The entire concept of putting 20% down, so you can sell if the economy tanks (aka the worst time to sell and you still are going to have to live somewhere) and lose all that money anyways seems silly to me. If the shit has hit the fan that bad for you, you are losing that money either way. Might as well just put the 5er down and get in the game.

I’m not disputing the logic but...

I doubt sellers are going to bite on an offer for a house right now with 5% down when they likely have the same or better offer with closer to 20% down or all cash.

As far as I can tell the things differentiating buyers right now is the ability to bring large amounts of cash to the table, appraisal waivers and inspection waivers.

**Self Jupiter** · 03-12-2021, 02:00 PM

Originally Posted by char_

I’m not disputing the logic but...

I doubt sellers are going to bite on an offer for a house right now with 5% down when they likely have the same or better offer with closer to 20% down or all cash.

As far as I can tell the things differentiating buyers right now is the ability to bring large amounts of cash to the table, appraisal waivers and inspection waivers.

This is accurate. Buyers that have a mortgage contingency in their offer usually include written plan on how to meet the difference in appraised vs contract value whether or not it could be met with a portion of their down payment. And those are the ones that have contingencies in the first place. Buyers have been doing this to win bidding wars for 5+ years in many markets in and around Boston and the past 10 months has accelerated that behavior into new markets further out of the city.

**RootSkier** · 03-12-2021, 02:06 PM

How does a seller know how much a buyer is financing? I get the obvious preference for a cash offer, but if the earnest money is sufficient and there is no financing/appraisal contingency, I don't really see why a seller would care or even know whether the buyer is putting down 5% or 90%.

**Self Jupiter** · 03-12-2021, 02:15 PM

In MA there are fields for those details in the boilerplate offer documents.

In most bidding war scenarios where the goal is to maximize the seller’s take away, the most attractive offer is the offer at the highest amount with the greatest likelihood of closing at that amount.

**char_** · 03-12-2021, 02:19 PM

Same in Oregon. You detail price, earnest money and amount down.

**AdironRider** · 03-12-2021, 02:21 PM

Originally Posted by char_

I’m not disputing the logic but...

I doubt sellers are going to bite on an offer for a house right now with 5% down when they likely have the same or better offer with closer to 20% down or all cash.

As far as I can tell the things differentiating buyers right now is the ability to bring large amounts of cash to the table, appraisal waivers and inspection waivers.

I think the appraisal thing is a fair point, notably in super hot markets like pretty much every ski town, but most of suburbia is not getting all cash offers for your 3 bed 2 bath 20 minutes like outside of say, Indianapolis.

I know dentists and TGR and all, but young people buying in ski towns are not a super large demographic all in all.

**RootSkier** · 03-12-2021, 02:27 PM

Some of us don't live in ski towns and are still seeing way-over-asking and all cash offers on the regular. It's not just ski towns.

**Self Jupiter** · 03-12-2021, 02:28 PM

It’s not just ski towns

**char_** · 03-12-2021, 02:28 PM

Originally Posted by AdironRider

I think the appraisal thing is a fair point, notably in super hot markets like pretty much every ski town, but most of suburbia is not getting all cash offers for you 3 bed 2 bath 20 minutes like outside of Indianapolis.

I know dentists and TGR and all, but young people buying in ski towns are not a super large demographic all in all.

I’m not talking about ski towns.

And yes, at least where I am suburbia is a hot market with multiple offers. People are leaving the city core for larger lots and houses.

I sold a house in a town that barely shows up on the map last spring and we had multiple above ask offers for a not remarkable house. In no way would it ever show up in a discussion on pretty much any forum for a place to live for a outdoor lifestyle.

My only regret is that I’m pretty sure we ended up selling to a landlord who rented it out who made an all cash offer. Should have sold it to the young couple who was financing.

**AdironRider** · 03-12-2021, 02:37 PM

You guys are high if you think every house is selling above asking everywhere, with all cash.

Bunny is going to show up any minute now....

**char_** · 03-12-2021, 02:38 PM

Originally Posted by AdironRider

You guys are high if you think every house is selling above asking everywhere, with all cash.

Bunny is going to show up any minute now....

No one said that.

**dunfree** · 03-12-2021, 02:42 PM

Pretty sure for many years now there are more above market offers & bidding wars in suburbia than “ski towns”, because there’s like 100x the homes sold in suburbia every year.

**skaredshtles** · 03-12-2021, 02:43 PM

Originally Posted by AdironRider

You guys are high if you think every house is selling above asking everywhere, with all cash.

That's true. There are still plenty of shitholes in American that nobody in their right mind would want to live... you can still get really "good" deals on real estate in those places.

**RoooR** · 03-12-2021, 03:08 PM

Originally Posted by skaredshtles

That's true. There are still plenty of shitholes in American that nobody in their right mind would want to live... you can still get really "good" deals on real estate in those places.

Some of those shitholes even have awesome mountain biking, scenery and outdoor recreation.

**concretejungle** · 03-12-2021, 03:15 PM

Replace mountain biking with bouldering and I'm in. El Paso here we come.

**skaredshtles** · 03-12-2021, 03:20 PM

Originally Posted by RoooR

Some of those shitholes even have awesome mountain biking, scenery and outdoor recreation.

Yep. It's all in the marketing... most of those places are terrible at that sort of thing.

**glademaster** · 03-12-2021, 03:34 PM

Originally Posted by Name Redacted

Glade, do you have money saved for a down payment? Have you figured out what your able to afford?

Yeah, and yes. Money saved, I know what I can get a loan for, my credit score is strong, and I have some assistance from my folks (and preemptive fuck you to anyone that wants to judge me for it, plenty of Boomer mags talk openly about helping their children buy homes and don't catch flak for it).

**AdironRider** · 03-12-2021, 03:45 PM

Its a wonder you a still single.

Aspen has one of the strongest affordable housing programs in the country, is that an option for you? I would think being a public employee you'd at least be a step or two above the average ski bum.