Real Estate Crash thread

[liv2ski]

There is the home shown, and then there is also a separate rental unit with a small kitchen and it's own bathroom on that property. It's not clear in the listing but that's two rental units shown.

I got that. Some people (like me) want the ADU for family to visit, but even with that, I doubt the property would rent for the PITI payment of $4,100, not to mention the $159k down payment, so unless I was hell bent to buy NOW, I was suggesting it may be a better time to rent and see what happens to prices in the next 12 months.

[Toadman]

Rentals in my neighborhood, the very few LTRs that pop up, seem to be going for $3-3,500/mo for decent 3b/2b, 1,800 sqft. Tons of STRs available whenever needed.

Just wondering if STR's are anything less than 30 days. Or is the definition different depending on the neighborhood/HOA? Does it matter if someone comes along and says . "I want to rent your STR for the year?"
Other than maybe you lock in steady income for 12 months, assuming the renter isn't a deadbeat.

[liv2ski]

Look on Air B & B. There are discounts for 30+ day occupancies. My hood mandates no less that a 28 day term on STR's. Problem in CA is the tenant gets all kinds of rights/PITA to get rid of as soon as they occupy the property 30 days.

[Name Redacted]

Look on Air B & B. There are discounts for 30+ day occupancies. My hood mandates no less that a 28 day term on STR's. Problem in CA is the tenant gets all kinds of rights/PITA to get rid of as soon as they occupy the property 30 days.

LTRs have a higher tax rate, more wear and tear, and generally more problems. Yes, 30+ is a a LTR. Many HOAs, towns, cities, municipalities have regs requiring 30+ or 60+ or 6 month leases etc.

I sometimes rent our STRs long term, usually regret it. Renters are a PITA, especially LTRs. Guarantee they break something, or have issues. STRs are here today and gone tomorrow. But like I've said, it depends on a lot of different factors, mainly the property.

[Toadman]

LTRs have a higher tax rate, more wear and tear, and generally more problems. Yes, 30+ is a a LTR. Many HOAs, towns, cities, municipalities have regs requiring 30+ or 60+ or 6 month leases etc.

I sometimes rent our STRs long term, usually regret it. Renters are a PITA, especially LTRs. Guarantee they break something, or have issues. STRs are here today and gone tomorrow. But like I've said, it depends on a lot of different factors, mainly the property.

Our HOA is having a vote on mandating a minimum 30 day rental on any house. Was just curious as to what might be the reason. Other than not having weekend party central in the 'hood.

[altacoup]

Rentals in my neighborhood, the very few LTRs that pop up, seem to be going for $3-3,500/mo for decent 3b/2b, 1,800 sqft. Tons of STRs available whenever needed.

LTRs have a higher tax rate, more wear and tear, and generally more problems. Yes, 30+ is a a LTR. Many HOAs, towns, cities, municipalities have regs requiring 30+ or 60+ or 6 month leases etc.

I sometimes rent our STRs long term, usually regret it. Renters are a PITA, especially LTRs. Guarantee they break something, or have issues. STRs are here today and gone tomorrow. But like I've said, it depends on a lot of different factors, mainly the property.

I’m just shocked that there’s a crazy bubble of absurd prices!


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[Tips^Up]

We just bid on a house with an ADU. Our bid was not chosen despite an escalation clause of $1k more than the greatest offer. Not a big % on a sale of that size, but better than not having $1000 so I thought. That's OK, it'd be a major step (2 steps?) up in quality but trading bikes for car dependent neighborhood, so we're not super bummed. Maybe more listings coming soon.

[Core Shot]

Is an escalation clause legally binding?

Say two of you had $1k escalations?
Price to infinity!!!!!

Unless you put a max bid limit.
In which case they can accept your limit as your bid. Even if there are no other escalations.
Do you think you have the right to see the other offers?

I would reject your escalation clause on the grounds of dickishness

[old_newguy]

Escalation clauses are part of the offer package, so as legally binding as the rest.

They come with an increment, bid max and clause that says the buyer gets to see the next highest offer.

If sellers don’t want escalation clauses they should stop setting up their sales as auctions.

[Conundrum]

Just wondering if STR's are anything less than 30 days. Or is the definition different depending on the neighborhood/HOA? Does it matter if someone comes along and says . "I want to rent your STR for the year?"
Other than maybe you lock in steady income for 12 months, assuming the renter isn't a deadbeat.

We don’t have many rules on STRs. Most are AirBBs. My neighbors have a 400 sqft ADU that they were ABBing for $200 a night. Some Seattle chick with rich parents cut a $2,000/mo “deal” for a six month lease. My neighbors were stoked to pick up $12,000 and not have to clean between renters. Wacky world these days. A few of the higher priced areas here don’t have HOAs so pretty much a free for all.

[Toadman]

We don’t have many rules on STRs. Most are AirBBs. My neighbors have a 400 sqft ADU that they were ABBing for $200 a night. Some Seattle chick with rich parents cut a $2,000/mo “deal” for a six month lease. My neighbors were stoked to pick up $12,000 and not have to clean between renters. Wacky world these days. A few of the higher priced areas here don’t have HOAs so pretty much a free for all.

I'm seeing a lot of new construction around Bend with ADU's. It seems to be the thing to do these days.

[altasnob]

I'm seeing a lot of new construction around Bend with ADU's. It seems to be the thing to do these days.

Good, better than single family residences they were building. Ya, most of those ADUs will be STRs but some may be long term.

[altasnob]

Is an escalation clause legally binding?

Is any offer and acceptance in real estate legally binding? The buyer can always come up with a bullshit issue in inspection to get out. Not sure if the same when the buyer has pre-inspected or waived inspection, but seems there is always ways for the buyer to wiggle their way out.

[dan_pdx]

Good, better than single family residences they were building. Ya, most of those ADUs will be STRs but some may be long term.

I agree, increasing housing supply, especially in a way that adds some density, is a positive. Also, if the owners are living on the property, seems it will limit some of the more obnoxious STR behavior, which is better for the neighbors than living next to a typical Air BnB.

[Ted Striker]

CS clearly never practiced RE law.

Is any offer and acceptance in real estate legally binding? The buyer can always come up with a bullshit issue in inspection to get out. Not sure if the same when the buyer has pre-inspected or waived inspection, but seems there is always ways for the buyer to wiggle their way out.

In WA the buyer has 3 days to accept or reject the seller's disclosure. That's a walk for any reason.

[dan_pdx]

Is any offer and acceptance in real estate legally binding? The buyer can always come up with a bullshit issue in inspection to get out. Not sure if the same when the buyer has pre-inspected or waived inspection, but seems there is always ways for the buyer to wiggle their way out.

In the current market, at least in B'ham, which is white-hot, that's less true than in the past. Basically a strong seller's market right now. You need to waive inspection to be competitive, and our RE agent even suggested we should check the box that indicates we'll abandon our earnest money if we can't get financing. Since there's a real chance of an appraisal gap, where the house appraises for less than your offer -- and therefore you can only finance X% of the purchase price and need to make up the remaining amount with cash -- getting this wrong would be painful.

[Ted Striker]

Are people doing pre-inspections? Unless you're a GC, Jack-of-all-trades, or made of money, that seems crazy because the number of properties in this town that need major work eclipse the number that are move-in ready.

[dan_pdx]

Are people doing pre-inspections? Unless you're a GC, Jack-of-all-trades, or made of money, that seems crazy because the number of properties in this town that need major work eclipse the number that are move-in ready.

We looked at one house where the seller did a pre-inspection and provided it to buyers' agents. That was nice, probably helped the bidding go stratospheric.

I'm not sure if I mentioned it here previously, but we did a pre-inspection for one house we were interested in. I was on the phone with the inspector, and when I told him the address, he paused and said "I'm already inspecting that house Monday for another client". He confirmed with the other client that he was on board, and we wound up splitting the inspection cost...and not making an offer on the house because there was way too much going on. But yeah, $500 - $750 or so for a pre-inspection is unappealing if you think you're going to need to make a bunch of offers before having one accepted.

[Ted Striker]

750? wow

500 seemed to be standard for a while, and the newer inspectors were even offering RE agents discounts to build their client bases.

[Core Shot]

CS clearly never practiced RE law.


In WA the buyer has 3 days to accept or reject the seller's disclosure. That's a walk for any reason.

I actually did before I retired.

The initial comment never mentioned having a cap. It just mentioned more than the highest.

Sure, anything can be legally binding if it’s consensual. Interesting that the clause allows you to see the other offers. What right does the seller have to show my offer to a third party?

What if the other offer was finance and inspection contingent and yours is cash and no inspection?
Do you still get boned at the high price?
Is there a free out without the WA statute?

This shit blows my mind.
Back in the day, they went back to every buyer and said one shot. Highest and best.

This new shit is like going on price is right and offering a dollar more.

Total dick move imho
Ymmv

[altasnob]

We looked at one house where the seller did a pre-inspection and provided it to buyers' agents. That was nice, probably helped the bidding go stratospheric.

Interesting. But seams like a lawsuit waiting to happen against the seller. What if the seller's inspection is wrong about something? The buyer relied on that inspection when making the offer. I guess buyer can always do their own inspection after offer/acceptance to verify the accuracy of the seller's inspection, and then bail.

On the other hand, wouldn't a seller's inspection be much more thorough? A buyer's inspection is limited to what they can look at (can't open anything up to see what is inside). But seller inspection can do whatever the seller lets them do.

[Garbowski]

I paid for two pre-inspections and they were both garbage (checked the outlets for ground and verified heat worked basically) so we stopped doing them. We found a guy to come out after the closing and give it a thorough once over and that was worth it.

[Ted Striker]

I actually did before I retired.

The initial comment never mentioned having a cap. It just mentioned more than the highest.

Sure, anything can be legally binding if it’s consensual. Interesting that the clause allows you to see the other offers. What right does the seller have to show my offer to a third party?

I can only speak to WA, where escalation clauses are generally written as in $___ increments up to $___ cap, and only that portion of the offer is disclosed to the other parties after acceptance (and only by request).

Back in the day, they went back to every buyer and said one shot. Highest and best.

(again, my knowledge is only local) Agents still try to do that, but sellers can have other ideas.

[Ted Striker]

IMO home inspections are only good value in a buyers' market.

In a sellers' market, they're generally a waste of money, but just like an insurance policy or lottery ticket, one might save your ass.

[4matic]

My seller provided an excellent home inspection. It helped me be confident in overpaying..lol