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Okay, round 2 on home shopping realtor issues

Old 07-10-06, 11:05 AM
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Okay, round 2 on home shopping realtor issues

http://forum.dvdtalk.com/showthread.php?t=470181

The house we were going to get with our Realtor(link above) fell through since we were outbid. She is on her vacation as noted in the previouse thread and we went out looking by ourselves. We now found a house that is for sale buy owner - but it doesn't have a pool and we want a pool. We've got an idea on how to make this work and I would love to hear thoughts from the Otters…

2 issues:

We're trying to get the cost of a pool included in the mortgage as to not pay the cost out of pocket or get another loan at a higher rate. ???

And

I assume since we found this house on our own, she has no right to claim the commission on this property. ????

Details:

1. House appraised early this year @ $160k.
2. Current owner bought it in Feb as an investment property.
3. He has put $20k worth of work into it since. (He didn't tell me this - I overheard him on the phone with his mortgage guy)
4. He is asking $179k.
5. We plan on getting the house for around $172 - 174k…since we're not using a realtor we're saving him that much on commission correct?
6. The pool we want is going to cost around $20 - 22K.

So…thoughts?
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Old 07-10-06, 11:05 AM
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5. We plan on getting the house for around $172 - 174k…since we're not using a realtor we're saving him that much on commission correct?

He will tell you that if he were using a Realtor he would be asking $190k.

You lost the last one by trying to come in with a lower bid that your Realtor suggested. Maybe shes knows the market. Quit worrying about trying to pay less than asking and start thinking about paying a fair market price.

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Old 07-10-06, 11:12 AM
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He doesn't have to pay anything. If you want to use a Realtor on a For Sale By Owner, you would have the pay the fee if you want to use one.
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Old 07-10-06, 11:13 AM
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Second time today my post went ahead of the post I replied to.


Edit: Make that "third"
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Old 07-10-06, 11:13 AM
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Originally Posted by kvrdave
5. We plan on getting the house for around $172 - 174k…since we're not using a realtor we're saving him that much on commission correct?

He will tell you that if he were using a Realtor he would be asking $190k.

You lost the last one by trying to come in with a lower bid that your Realtor suggested. Maybe shes knows the market. Quit worrying about trying to pay less than asking and start thinking about paying a fair market price.

I guess what I meant is if I were using a realtor he would have to pay my realtor 3% of $179k correct?

...and yes I learned a lesson on the last house.
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Old 07-10-06, 11:16 AM
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Originally Posted by kvrdave
He doesn't have to pay anything. If you want to use a Realtor on a For Sale By Owner, you would have the pay the fee if you want to use one.
Ahhh - I see. This is the good info I needed.

Thanks!

Any best practices on getting the pool in the mortgage?
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Old 07-10-06, 11:25 AM
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Originally Posted by boobietheclown
Ahhh - I see. This is the good info I needed.

Thanks!

Any best practices on getting the pool in the mortgage?
Get a bid for putting the pool in. Add that to the price and talk about that with your mortgage person. The amount to put the pool in should be stated in the offer that it will be held in escrow and paid to the pool contractor upon completion of the job. That should satisfy the bank, and that will let the appraiser appraise it as though it had a pool. Still probably only a 50/50 shot of that working. There isn't a problem with it, but many mortgage people, etc. don't actually want to work too hard (actually true of most people in most professions), and this will add some work.
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Old 07-10-06, 11:37 AM
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So I guess there are 2 issues the Broker has to be willing to put in a little extra work...AND...the house has to appraise at a high enough value to cover the cost of the pool to satisfy the lender's requirements.
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Old 07-10-06, 11:40 AM
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Correct. It isn't an easy proposition. If I were you I would probably buy the house (assuming everything else is what you want) and either refinance it in a year to pay for the pool, or find some other way to do the pool in the future.
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Old 07-10-06, 12:08 PM
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Why don't you talk to a pool guy independently? A lot of people who get pools get financing from the pool company (or a related lender). And depending on how busy they are, it could take 6-18 months to get your pool done. The seller won't wait.

Also, pools cost more than the value of the house they add.

I would talk to the pool guy first.
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Old 07-10-06, 12:53 PM
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Originally Posted by boobietheclown
Ahhh - I see. This is the good info I needed.

Thanks!

Any best practices on getting the pool in the mortgage?
If you want a Realtor to handle the paperwork you need to let the seller know that up front. If he was going to sell it to you for $179K, but you want to bring your agent in, I'd offer the agent 2%. Your sale price will now be $182,500. Normal buyer agent commission is 3%, but in this case you were the procuring cause of sale, not her. She would rather get 2% than nothing. Hell, I'd rather get 1% than nothing. I hate it when my buyers go FSBO on me, especially ones I've put months or weeks into working for them.

Reminder: Realtors don't get paid by the hour. I know I have to remind my family of that all the time.
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Old 07-10-06, 01:07 PM
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I won't get out of bed for 2%
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Old 07-10-06, 01:21 PM
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Originally Posted by kvrdave
I won't get out of bed for 2%
Yeah, 2% on a slum isn't much
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Old 07-10-06, 02:18 PM
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What does your contract with the realtor say? They may attempt to claim a commission even if you went FSBO. Now whether they are entitled to it or not is another thing.

And as people have said, some mortgages will let you know add money in and finance it - but your house probably needs to appraise for that much more (without the pool) and that will probably not happen. Otherwise, they are upside down on the loan if you default.

How much are you putting down? You could take out a Home Equity Line after you close to pay for the pool.
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Old 07-10-06, 03:54 PM
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I think you should keep the pool as a separate loan. If you roll it into the first mortgage you are going to be paying for it for 30 years, which will be more interest even at a lower rate. You can finance the pool with a second mortgage for a shorter time and pay less interest even at a higher rate. When we got our pool the rates through GE Finance (arranged by the pool company) were very competitive, in fact, they were less than we could get at many other institutions and it was a "value added" loan so there was we didn't need the appraisal to be based solely on the house.
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Old 07-10-06, 05:04 PM
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Originally Posted by boobietheclown
http://forum.dvdtalk.com/showthread.php?t=470181

The house we were going to get with our Realtor(link above) fell through since we were outbid.
So your realtor was correct about your offer being too low the first time around?


We're trying to get the cost of a pool included in the mortgage as to not pay the cost out of pocket or get another loan at a higher rate. ???
That's not going to be easy

Details:

1. House appraised early this year @ $160k.
2. Current owner bought it in Feb as an investment property.
3. He has put $20k worth of work into it since. (He didn't tell me this - I overheard him on the phone with his mortgage guy)
4. He is asking $179k.
5. We plan on getting the house for around $172 - 174k…since we're not using a realtor we're saving him that much on commission correct?
6. The pool we want is going to cost around $20 - 22K.

So…thoughts?
1. Who did the appraisal? How do you know? How much did he pay for it?
2. He bought it as an investment in February while it appraised about about $160k, put $20k of work into it, and wants to sell it a few months later for $179? What the hell kind of investment is that? After transaction costs, he'd be losing a fair chunk of change.
3. Yeah, he just happened to mention that while you were within earshot. I'm sure he didn't intend for you to know that at all! Ask him for a list of what he did and receipts.
6. You're going to put a $20k pool in a $180k house? Assuming you managed to find an appraiser that will boost the value by over 10% to cover the cost in the mortgage (25% over the earlier appraisal this year), a pool sure as hell isn't going to boost the value by $20k.
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Old 07-10-06, 05:32 PM
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i've heard that outside NYC you have to sign some kind of crazy contract with a realtor that says you can't buy a house without them. if you don't have a contract like this then make a bid and tell the realtor to take a hike.

get a lawyer for $700 to handle the closing and contract
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