Family can't move into house they bought

[Halfcan]

Originally Posted by sedated

Hoping a bubble bursts might be too much, but I've bid on 2 houses recently - 25% over asking - and lost because someone else did the same while waiving inspection and appraisal. Is it really too much to ask to not have to blindly throw a ton of cash at someone to get a house? Apparently not because in both cases there were over 10 offers within 24 hours.

How are people waiving appraisals unless they are cash buyers?

FHA and VA buyers have mandatory inspections.

This is the kind of stuff that causes the housing market to crash. There has to be a check and balance on properties and loans. I guess people have forgotten the Obama years. The market was depressed by foreclosures and loans being very difficult to get.

[vailpass]

Originally Posted by Halfcan

How are people waiving appraisals unless they are cash buyers?

FHA and VA buyers have mandatory inspections.

This is the kind of stuff that causes the housing market to crash. There has to be a check and balance on properties and loans. I guess people have forgotten the Obama years. The market was depressed by foreclosures and loans being very difficult to get.

Inspections. Not appraisals.

[Halfcan]

Originally Posted by vailpass

Inspections. Not appraisals.

He stated Both in his post.

[vailpass]

Originally Posted by Halfcan

He stated Both in his post.

Sorry, I thought you were replying to my post.

[DaneMcCloud]

Originally Posted by vailpass

Inspections. Not appraisals.

Appraisals are ordered by the financing company but pre-Zillow/Trulia/Redifin, I paid for a few appraisals out of pocket for a few properties I considering purchasing.

As for inspections, they aren't the end all, either. We hired a supposedly "great" firm to do the inspection on our home but the guy missed all kinds of stuff, including a super leaky flat roof, a balcony that leaked into our laundry room and all kinds of electrical that wasn't even close to code.

When I asked our realtor about this crap six months after purchase, he said that there's nothing the inspector could have done because they're not allowed to perform any leak detection or electrical inspections.

Fortunately, we found all of the issues early on because we basically tore it down to stud, which is probably the same plan for those that are purchasing without inspections as well.

[DaneMcCloud]

Originally Posted by Halfcan

How are people waiving appraisals unless they are cash buyers?

FHA and VA buyers have mandatory inspections.

This is the kind of stuff that causes the housing market to crash. There has to be a check and balance on properties and loans. I guess people have forgotten the Obama years. The market was depressed by foreclosures and loans being very difficult to get.

People are dropping $1+ million dollars cash all over Los Angeles, without inspections and without appraisals because the interest rates are so cheap that investors can put a couple hundred thousand into them and rent them out for $6k-8k per month all day long.

[displacedinMN]

Originally Posted by DaneMcCloud

People are dropping $1+ million dollars cash all over Los Angeles, without inspections and without appraisals because the interest rates are so cheap that investors can put a couple hundred thousand into them and rent them out for $6k-8k per month all day long.

Anyone there doing teardowns?

[DaneMcCloud]

Originally Posted by displacedinMN

Anyone there doing teardowns?

All over, although it's generally in the pricier areas like Beverly Hills or the Birds in which enormously wealthy people buy two to three lots and build one house in its place.

That said, it's also happening quite a bit down in Inglewood near the new Rams stadium and that area, which has become Silicon Beach. 20-30 years ago, you could buy a house down there for next to nothing and now it's going for $1,000 a square foot or more.

But the main thing is people buying older homes built in the 50's-80's, tearing them down to stud and building them back up. In most cases, the plumbing and electrical is no where near code so you're better off tearing out the old plaster and starting from scratch, although those fixer uppers are generally $800k-$1 million.

[Halfcan]

Originally Posted by DaneMcCloud

People are dropping $1+ million dollars cash all over Los Angeles, without inspections and without appraisals because the interest rates are so cheap that investors can put a couple hundred thousand into them and rent them out for $6k-8k per month all day long.

This is a good example of where the country is headed. Super rich elite at the very top gobbling up every asset, 2nd tier wealthy millionaires, a shrinking middle class, and an enormous population of poor.

Real Estate is like any ecosystem- it takes all levels to stay healthy.

The poor and lower middle class have to have a way to get out of the rentals and move into starter-type homes with other first-time buyers. First-time buyer programs are amazing and essential. Lower cost FHA and VA loans as well.

These previous 1st timers need to build equity to move to the nicer neighborhoods- which then let retired folks cash out or continue to move up to gated communities.

Right now the fixer-upper/starter homes are getting bought by major investment firms and turned into expensive rentals. This will eventually put negative pressure all the way up the ladder.


The last crash happened mostly because all the First-time buyer money dried up and banks started demanding vast amounts down. It sent ripples throughout the markets. Along with high unemployment, the stock market crash wiping out retirement funds, and ridiculous hyperinflation- it was the perfect storm.

[Lzen]

Originally Posted by Halfcan

...The last crash happened mostly because all the First-time buyer money dried up and banks started demanding vast amounts down....

There's more to it than that, but this is what was the root cause:

The stock market crashed in 2008 because too many had people had taken on loans they couldn’t afford. Lenders relaxed their strict lending standards to extend credit to people who were less than qualified. This drove up housing prices to levels that many could not otherwise afford.


Easy credit and raising home prices resulted in a speculative real estate bubble. While the market crashed in 2008, the problem started years earlier.

In the late 90s, the Federal National Mortgage Association, or Fannie Mae as it’s commonly known, began its crusade to make home loans accessible to borrowers with a lower credit score.

Fannie Mae wanted everyone to attain the American dream of homeownership, regardless of credit. Lenders who extended home loans to high-risk borrowers offered mortgages with unconventional terms to reflect the increased likelihood of default.

The relaxed lending standards fueled the housing growth and corresponding rise in home values. People with bad credit and little-to-no savings were offered loans they could not afford. Meanwhile, banks were repackaging these mortgages and selling them to investors on the secondary market.

While housing prices continued to increase, the rising subprime mortgage market thrived. Because house values rose so quickly, the increase in home equity offset the bad debt buildup. If a borrower defaulted, banks could foreclose without taking a loss on the sale.

The resulting seller’s market meant that if homeowners couldn’t afford the payments, they could sell the house and the equity would cover the loss.

A crisis was virtually inevtiable. Once the housing market slowed down in 2007, the housing bubble was ready to burst.

https://www.wealthsimple.com/en-us/l...8-market-crash

[htismaqe]

Originally Posted by Halfcan

This is a good example of where the country is headed. Super rich elite at the very top gobbling up every asset, 2nd tier wealthy millionaires, a shrinking middle class, and an enormous population of poor.

Real Estate is like any ecosystem- it takes all levels to stay healthy.

The poor and lower middle class have to have a way to get out of the rentals and move into starter-type homes with other first-time buyers. First-time buyer programs are amazing and essential. Lower cost FHA and VA loans as well.

These previous 1st timers need to build equity to move to the nicer neighborhoods- which then let retired folks cash out or continue to move up to gated communities.

Right now the fixer-upper/starter homes are getting bought by major investment firms and turned into expensive rentals. This will eventually put negative pressure all the way up the ladder.


The last crash happened mostly because all the First-time buyer money dried up and banks started demanding vast amounts down. It sent ripples throughout the markets. Along with high unemployment, the stock market crash wiping out retirement funds, and ridiculous hyperinflation- it was the perfect storm.

The first crash happened because homebuyers and banks were drawing up loans neither of them could afford.

I used to consult for a very large lender. They took billions in losses because they decided it was a good idea to lend mortgages to people that had zero means to pay them off.