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solarUS said:   henry33 said:   I think that's one of the drawbacks of using mud, it's more likely to crack, plaster is better but harder to work with.
plaster...huh? nobody uses plaster for anything anymore in building modern homes...been 50+ years since they did.


I pick it up at the local arts and crafts store. Mix it with Elmer's glue and it is very effective and extremely durable as a patching compound.

If a structural engineer wants a ton of money to come out then call around. Its not like they are flush with work right now, construction is still way down. Soil tests aren't necessary to determine settling, but a blueprint of the property might be. Your agent should be able to pull it from the county and avoid having to rack up fees from the engineer for the time. You should be able to get a good assessment for less than $250. You can also get a qualified general contractor (depending on the area you live different classifications) to come out and look at it for free. If its free schedule a couple of them and see if the opinions match. In CA we had 3 GC's give opinions on a foundation that needed modification for earthquake code, all 3 came back exactly the same recommendation and within ~$200 of eachother on a $8000 bid.

CptSavAHo said:   solarUS said:   henry33 said:   I think that's one of the drawbacks of using mud, it's more likely to crack, plaster is better but harder to work with.
plaster...huh? nobody uses plaster for anything anymore in building modern homes...been 50+ years since they did.


I pick it up at the local arts and crafts store. Mix it with Elmer's glue and it is very effective and extremely durable as a patching compound.

If a structural engineer wants a ton of money to come out then call around. Its not like they are flush with work right now, construction is still way down. Soil tests aren't necessary to determine settling, but a blueprint of the property might be. Your agent should be able to pull it from the county and avoid having to rack up fees from the engineer for the time. You should be able to get a good assessment for less than $250. You can also get a qualified general contractor (depending on the area you live different classifications) to come out and look at it for free. If its free schedule a couple of them and see if the opinions match. In CA we had 3 GC's give opinions on a foundation that needed modification for earthquake code, all 3 came back exactly the same recommendation and within ~$200 of eachother on a $8000 bid.


That's actually a very useful tip re general contractors.

The bank came back and countered -- $309K (apparently they first countered to the listing agent for $314K, but he then spoke with another contact at the bank and got a more reasonable counter). I'm leaning towards no, but I might counter again -- the supply of houses around here is just not that great and they are obviously aware of that and willing to sit on this one for a bit.

ltcm said:   The bank came back and countered -- $309K (apparently they first countered to the listing agent for $314K, but he then spoke with another contact at the bank and got a more reasonable counter). I'm leaning towards no, but I might counter again -- the supply of houses around here is just not that great and they are obviously aware of that and willing to sit on this one for a bit.

That sounds like pretty much standard homepath prices, they only down by about 5k, but see when the dropped the price last, in about a month, it'll probably go down about 10k and then the 300k offer should work.

You started too high my friend

Unless you are determined to buy this house I'd let it sit till the next price drop. You'll get your $300k

Starting out too strong is the wrong move unless you plan to pay their price to get it over with

ltcm said:   

That's actually a very useful tip re general contractors.

The bank came back and countered -- $309K (apparently they first countered to the listing agent for $314K, but he then spoke with another contact at the bank and got a more reasonable counter). I'm leaning towards no, but I might counter again -- the supply of houses around here is just not that great and they are obviously aware of that and willing to sit on this one for a bit.


If $300k is your price point counter with $303.5k and bank picking up the closing costs (a net gain for you, but possibly a deal for the bank). Your closing costs would probably be ~$4200. Go after additional reductions when you get the inspection results. If you want to play dirty bring out GCs till one of them says there may be foundation issues then use their report to counter the bank.

Yeah, the more I think about it, the more I might just pass on this one for the time being. I think they'll drop their price again in a week or so, but if not, then I'm probably resigned to keep looking.

I'm not in a giant hurry to buy, but would like to make a move sooner rather than later. And I have the ability to go higher on price, but I was just trying to avoid that scenario.

On a related question -- DR Horton, Beezer, others were bashed around (probably justified) in this thread, but what are the "good" builders out there? I feel like almost all houses constructed within the last 10 years in any given area are completed by a half dozen builders and everyone has horror stories about every one of them. Are there any decent builders left?

The high volume production homebuilders are all going to have some of the same issues especially on homes built during the boom years. There is just no way to build houses as fast and cheaply as possible using transient labor and still come out with a consistently good finished product. Certainly some of their homes will be more problem-filled than others, but that's why you need an inspection.

ltcm said:   Yeah, the more I think about it, the more I might just pass on this one for the time being. I think they'll drop their price again in a week or so, but if not, then I'm probably resigned to keep looking.

I'm not in a giant hurry to buy, but would like to make a move sooner rather than later. And I have the ability to go higher on price, but I was just trying to avoid that scenario.

On a related question -- DR Horton, Beezer, others were bashed around (probably justified) in this thread, but what are the "good" builders out there? I feel like almost all houses constructed within the last 10 years in any given area are completed by a half dozen builders and everyone has horror stories about every one of them. Are there any decent builders left?


Nope. Sadly nope. It's a crap shoot what your buying. You could be buying a POS or a perfect home. It depends on who supervised the job, what materials they used, and even the laborers building the house. I know people who built with Centex, Beazer, etc. and have been very happy, and across town the same builder built homes that are falling apart. Generally, good local custom builders do a good job because they maintain a good rep. Their are bad local builders too. It's a crap shoot. Local builders have trade-offs. Major builders build big subdivisions, local builders tend to build house "here and there".

UPDATE:

Just thought I'd update this thread -- after informing the listing agent/bank that I wasn't planning to counter, they then recontacted us and asked if we were still willing to do the deal at the original price we offered -- I went ahead and declined.

I really did appreciate everyone's perspective in this thread and I ultimately decided that the house wasn't selling at enough of a discount to make me comfortable, and that since it's a pretty expensive house that I plan to live in, I'd rather pass. I think if it was a $100K house that I was planning to rent, I would have been a bit more comfortable (especially if it was older -- I do agree that the general quality of building has gone down a bit), but this just wasn't the right one. As I said, there's not a lot of supply on the market around here right now, but I'm willing to wait since I'm in the great position of not having to sell or target a lease end date -- I've got all the flexibility in the world right now so I should take advantage of it.

Second, despite the drywall issues, the house was not the ideal layout for me, so I'm going to firm up what I'm looking for and focus in a bit more specifically. Ideally I want 5 bedrooms upstairs -- which is a hard thing to find, but it's out there -- so the current plan is to hold out until I get it (the other one had 4 bedrooms upstairs, which is much more common).

THANKS again to everyone -- I wanted to update the thread because I think a lot of people seek advice for the purpose of validation, and instead, I really learned a lot and decided to follow the advice.

Given your criteria you probably want to go with new construction. See if you can find your layout and price point in a home that hasn't been built yet. Once construction starts go to the job site and walk around the house. Hire a 3rd party GC to meet with you on the weekends and point out all the code/building issues as the construction continues. Every time you find something not right go to the builder on Monday and tell them to fix it.

One last update;

http://www.pwpds.slco.org/inspect/pdf/INTERNATIONALRESIDEN.pdf

This is a quick and easy checklist if you are looking at new construction by 2006 International Residential Code. Its a lot easier than the 600 page encyclopedia, and a lay person can run down it at the job site to validate proper materials and a decent idea of proper installation (for example distances from property lines, room dimensions etc).

65 is for high eff furnace
76, 77, and 82 are newer revisions they may not be present in homes in areas using an older code volume
the rest are pretty self explanatory

ltcm said:   UPDATE:

Just thought I'd update this thread -- after informing the listing agent/bank that I wasn't planning to counter, they then recontacted us and asked if we were still willing to do the deal at the original price we offered -- I went ahead and declined.

I really did appreciate everyone's perspective in this thread and I ultimately decided that the house wasn't selling at enough of a discount to make me comfortable, .

Start at a lower price you'll be comfortable accepting next time .

SUCKISSTAPLES said:   You started too high my friend

Unless you are determined to buy this house I'd let it sit till the next price drop. You'll get your $300k

Starting out too strong is the wrong move unless you plan to pay their price to get it over with
I'm just going to second this. SIS provides good advice based on actual experience.

I'd counter with a lower offer than your original. The bank can suck it if they don't like it.

Yes. But wait a bit. Let them sit on it then come back in at 270-280

To be fair, I still think $300K is a good price for the house, but my main reason for not accepting is that I've decided to hold out for five upstairs bedrooms. I've saved the house on Redfin and I'll certainly keep track of it, but I bet it will sell for $300K or higher, it seems very unlikely the bank will let it go for less than that.

If they were willing to take $300k after one rejected counter I can assure you there was more room for a better price

In other threads I've shared the offers/pricing on one REO I purchased originally listed for $230k- I was willing to pay $200k, my agent told me not to offer more than $180k. I did , they countered in the low 200s, my agent told me to counter at 185 final . I did , they did not accept , it sat on the market . After the next price drop I offered $165k , I think they wanted $190k at that time. Still no deal. Bank changed the realtor who listed the home (they sometime do this to get fresh marketing ) and reduced the list price to $165k. I came back and offered $140k. Someone from the bank saw the history and asked why we kept lowering out offer, we said "market conditions " (aka home hasn't sold yet). Finally ended up getting it for $60k less than I thought I would , and $90k less than initial list price .

So don't think they will hold firm at $300k. As everyone has said in this thread , they will keep reducing till it sells. This is not like a private owner who will "just keep it" if they don't get their desired price .

The only two things stopping you from getting this under $300k is yourself (by making offers that are too high) or another buyer who similarly offers too much. If there is no other high offer and yours is the best one in the table they will eventually come down on the price

SUCKISSTAPLES said:   If they were willing to take $300k after one rejected counter I can assure you there was more room for a better price

In other threads I've shared the offers/pricing on one REO I purchased originally listed for $230k- I was willing to pay $200k, my agent told me not to offer more than $180k. I did , they countered in the low 200s, my agent told me to counter at 185 final . I did , they did not accept , it sat on the market . After the next price drop I offered $165k , I think they wanted $190k at that time. Still no deal. Bank changed the realtor who listed the home (they sometime do this to get fresh marketing ) and reduced the list price to $165k. I came back and offered $140k. Someone from the bank saw the history and asked why we kept lowering out offer, we said "market conditions " (aka home hasn't sold yet). Finally ended up getting it for $60k less than I thought I would , and $90k less than initial list price .

So don't think they will hold firm at $300k. As everyone has said in this thread , they will keep reducing till it sells. This is not like a private owner who will "just keep it" if they don't get their desired price .

The only two things stopping you from getting this under $300k is yourself (by making offers that are too high) or another buyer who similarly offers too much. If there is no other high offer and yours is the best one in the table they will eventually come down on the price

n=<1 for SIS's house sold probably in CA and likely in a down market. while there are outliers that i myself have exploited over the years, the vast majority of well-priced REO's on the open market are bought up at only a modest discount from retail.

sometimes banks do dumb stuff with their RE inventory, but not normally.

Listen to SIS,

I have seen some very exceedingly dumb things in teh 250+ market for homes.

the one i want to kick myself in the cock for is this one

home listed for 450k was a 7700 sq ft palace with an architechture my wife loved.

I offered 300k thinking nfw they would accept, it was in poor condition but was owned by a person still and they had moved 500 miles away.

They accepted at 300k, i then went through full inspection and realized, i couldnt afford to fix the stuff that needed to be fixed within a month of buying so i backed out.

then someone bought it a week later for 225k.

i would have paid 225k no problem.

I will regret this one for years im sure.

another one i saw in that market sold for 150k below list also. These properties arent selling so when a seller gets a buyer hooked they turn irrational sometimes.

also around where i live, NE ohio, it seems most of the 500k houses are mortgage free as if you make that kind of cash in these parts your likely pretty loaded.

so they dont have to pay off anything when they sell.

There's no way in this economy anyone should be buying a $300K house unless the person could reach into the bank and pay cash for it. Home prices could fall further if the debt/economic problem is not resolved.

VA should eventually accept just over 70% of asking price.

ccpsteacher said:   There's no way in this economy anyone should be buying a $300K house unless the person could reach into the bank and pay cash for it. Home prices could fall further if the debt/economic problem is not resolved.

VA should eventually accept just over 70% of asking price.


Around here I've noticed I can offer 60k less than asking and get the house. Just goes to show market is very unstable. Short sales taking forever, foreclosures being rescheduled 5-10 times by a bank. Pricing games.

We looked at a blind bid HUD home for a 3200 sqft victorian that needed to be way beyond overhauled. Foundation and walls were in good shape, but everything else was trash. List was $176k. For the neighborhood a serious rehab by that sqft should have been around $195k. We put in 201k, and the offer that closed was 262k. All depends on where you live. A friend in Detroit got a 'free' house, then after closing went to the lot and the house was gone. The city billed him $12k for the demolitions. I joke with him he bought the most expensive piece of empty real estate in the whole city. Its still in court as to if he has to pay the bill to the city or not, but not looking good for him.

I bought one foreclosure and one short sale over the past 4 years. Both were new construction spec houses that had lingered on the market for over a year until the builders (little guys) couldn't take it any more.

On the foreclosure, our first offer was accepted, which immediately made me feel I bid too much. Wish I could do that one again, but we were getting the old "oh, another offer is coming in tomorrow, the bank will just chose the best one." And my wife loved the house. All in all still a good price, but live and learn.

The short sale is where we now live, pretty close to our dream home. Here I think I did much better. The list price had gone down over 40% in a year. Very modern home in a prime area, but I think its uniqueness made it a hard sell. The uniqueness is what we loved. Our first offer was 1/2 of current list. We went back and forth a maybe 3 times and finally gave them our true top offer--the highest we could afford. It was rejected with no counter. We sat tight a month with no further contact, just let us know if you reconsider, and they (seller and bank and the original land owner--she had some kind of a deal with the builder that she'd share in the profit on the sale) finally worked out who was taking the biggest bath and came back and said ok. So we ended up getting it for 100k less than the construction loan that the builder took out to build the place, not to mention the land cost. Just by chance, the same bank was invovled on both houses. They were local, so much easier to deal with than a megabank.

I just refi-ed last week and received two appraisals that were $450k and $550k over the purchase price.

As with any purchase where you negotiate, you have to let them think you're willing to walk.

solarUS said:   henry33 said:   I think that's one of the drawbacks of using mud, it's more likely to crack, plaster is better but harder to work with.
plaster...huh? nobody uses plaster for anything anymore in building modern homes...been 50+ years since they did.



Regional exception - in Massachusetts blueboard and a skim coat plaster is the norm vs drywall and mud. The trades are all standardized towards that.

ltcm said:   

they won't let it go for less than $300K and they shouldn't, it's worth that much.

To be fair, I still think $300K is a good price for the house,

but I bet it will sell for $300K or higher, it seems very unlikely the bank will let it go for less than that.


Your mindset is still wrong. learn from this mistake. seems like you are going to overpay for your house no matter what with this mindset.

bevo2k1 said:   ltcm said:   

they won't let it go for less than $300K and they shouldn't, it's worth that much.

To be fair, I still think $300K is a good price for the house,

but I bet it will sell for $300K or higher, it seems very unlikely the bank will let it go for less than that.


Your mindset is still wrong. learn from this mistake. seems like you are going to overpay for your house no matter what with this mindset.


You're certainly entitled to your opinion, but I think enough anecdotal evidence has been posted in this thread to support the idea that not every place in the country is holding a fire sale on foreclosures -- the bank certainly knows a lot more than I do about foreclosed properties in my area and what they think it will bring. Maybe they're wrong and the house sits there for another year, but I'd be surprised if that ended up happening.



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