patrick.net

If it's what you want, and the price is right, go for it. Good luck.

We just did the same thing. Found what we wanted, where we wanted, good mortgage rate.

We have been on the sidelines for two years.

We will be So/Texas owners.

I hope you did your home work and like the house. Wish you good luck! May be SoCal has come down quite a bit, but bay area adamantly keeping the prices up still. I dont see a decent house in decent neighborhood(94087, where I am looking). I guess I have to keep waiting.

> I will let everyone know. If/when we close, I’ll ask Patrick if I can change my screen name to SoCal Owner.

Sure, just let me know and I'll change it!

If it's a good deal, I'm happy for you. My only objections would be if you could still rent basically the same thing for much less, or if you can't really afford the long term (30 year fixed) price. But you've been on here long enough to know I'd say that.

>> short sale, bank is finally unloading, bank won’t lose money on our offer, offer within bank appraisal range).

I'm detecting a contradiction here, but good luck in any case ...

Bap33 - Forgive me for not providing the address, but I think I can clarify the math below.

The home is less than a decade old and appreciated greatly to peak price in 2006 (according to comp sales in the neighborhood for that year). Our offer lands a smidge higher than houses in the same neighborhood sold for over the past few weeks. The price is 45% lower than peak and about 20% off original sale price in 2004.

We are first-time buyers so we qualify for the FHA wonderloan of 96.5/3.5. We are well below the loan limits in CA and are Pre-Qual'ed for 30 year fixed.

The original owner put 20% down, had only one loan, and never re-fi'ed. The bank breaks even with our offer.

I will be honest and let everyone know if this goes through our not. It's my free public service.

A couple of things for those on the fence:

* A LOT of agents will not work with Short Sales. REDFIN declined to assist because they have a policy against it. (That is what I was told by the REDFIN agent).
* I did not find this house on the MLS and may explain why there are no other offers. Found using Zillow.
* I can afford the payments.
* Payments will be the same as renting an equivalent sized house.

Congrats to you, SoCal Renter. Hope your purchase goes through and that all the paperwork is done to your satisfaction. I have been saying for a bit now, that if the cost of owning a house is as cheap as renting, and you are purchasing it for much less than peak of market and can afford the payments through this recession and any further downturns, then why not buy? Most economists are now saying that we are slowly moving out of the recession. The worst may be behind us. True, prices may fall some more in certain areas, but not in ALL areas. Only you can ascertain what is best for you at any given moment. As for me, I rather live in my own house done in my own taste than live forever in a rental. I've been renting for close to four years now, and I am sick and tired of the way the gardening is being maintained and the way the pool service is being done. In my own house I will be able to hire and fire at will. As it is now, I am at the mercy of my landlord unless I want to spend @ $10,000 to have my house packed and moved.

If the bank is going to break even, how is it a short sale? Short to the seller only? The bank doesn't need to care about that as long as they're getting paid-in-full, which it sounds like they are.

The bank is out interest on the payments the previous owner didn't make, and whatever it cost them to keep the house (insurance, taxes). If they have the escrow then that would be minimal.

I'm sure its going to fall in value another 85% I'm going to wait until my parents die, then I won't have to risk anything.

Hey SocalRenter(Buyer),
I am amazed you found it on Zillow, I have found Zillow to be rather inaccurate. anyhow, good for you!

Question: will you walk away in four years time if the house is underwater?

I think you ought to put up the address on the interweb. That way all the crazies can stalk you. And, if you post it on Patrick.net, we (and the 20,000 other readers who visit daily) won't tell anyone where you live. It'll be our little secret, g'head, we're waiting....

Okay, so forgive my math, ya'll. If the buyers put 20% down ten(ish) years ago, paying around 8% or so and the price is 20% less than they paid for it.... the bank still can "short sell" if they've been trying to foreclose for awhile, blew legal fees, wrote off interest, paid taxes on the place, etc. At the very least it's a distressed sale. And we're talking semantics.

I'm thinking (out loud, obviously) that SoCal Renter has found the digs for him. Cool. He's shared a few details of his search with us. And I doubt he'll be walking away. I'm with the seven others here that are happy for you and wish for you the best.

No ill-will intended...huzzah! Renting is certainly not the best of all possible worlds. I pose my question in earnest, knowing from consensus on Patrick.net that going into a deal with the idea of walking away has become de jour, especially with a cheap mortgage, like an FHA. It's a real question.

Happy to see another brother taking the plunge !

Good luck with the purchase.

It looks like a no brainer deal though.

marko - I'm finding more and more houses listed on Zillow and not the MLS. I think this market has created a trend. Could we be seeing the beginning of the end of the MLS system?

Austinhousingbubble - No plans to walk away if underwater. I plan to be in the house for 30 years (and pay it off before then). This will be my "home" and not an investment.

chrisborden - I have no clue on taxes. Probably the seller is on the hook. But all liens will need to be removed before I take title.

I've been pro-renting when it makes sense, and it has made sense for the past five years in California. But we are now at 1990s prices for much of SoCal and even almost 1980s prices. Will prices continue to fall to 1970s prices like I once predicted? Maybe. But I still prefer to buy a car rather than lease.

Actually, house buying is much like buying a car. Find a good used house with low mileage and live in it till it falls apart.

Those still waiting out the bubble will likely find an even better deal by waiting longer. I think we will have another recession dip - probably foriegn lender debt crisis this time. Certainly no rush to buy though. Prices will not be skyrocketing up ever again. I see a slow decline from here through 2012.

If the deal goes through, win for me. If not, no big loss. I will find something else. Win win!

With all due respect, you can continue waiting and waiting and waiting. Eventually I'm sure you will find a house that is reasonably cheap; but don't forget about the bidding wars. That will bring up the price another 60 to 75K guaranteed. So all that waiting for the 60K drop (as an example) was not really a benefit to you.

Especially in desirable areas, there are plenty of affluent first time home buyers who are willing to jump in at reasonable (fair) prices.

I'm sure if you continue waiting you will find a very cheap dump, that requires 40K of fixing and a 60 mile commute to your job.

Renting is great and saves you alot of money, but banks know how to play the game too and they are not looking out for your best interest. Your only chess move is to wait, banks can continue moving their pawns in different directions until they get a price they want.

By the way, I just closed escrow. I rented for 10 years and saved every dime and paid off all my debt. That's the best strategy to prepare for a home purchase - not waiting for a fire sale. I am a reasonable person and willing to pay for a home that listed at 2004 prices.

The house I paid for was 435K

Sales History:

2006 = 640K
2004 = 420K
1996 = 250K

You can speculate all you want on waiting until the house went down to 1996 levels, but not in the city where I live. There are too many affluent Chinese that are willing to pay 500K for the house.

BTW - I won't have a chance to read all the bashing of my post until tomorrow morning. Got to get back to work and pay off my debt :)

Post the home address on Internet! wow...

Just wanted to say good luck with this. I also just bought a short sale in a very desirable community in the SF Bay Area. Have been a renter for 3 years (so qualified for the first time owner tax break) and the house appraised for sale at a little more than 10% more than we just paid. We also are looking long term - my wife and I agreed that we would only buy a house we could live in until retirement (at least 20 years away) and one that really met ALL our needs. I am not 100% certain this was the right thing to do, but our mortgage rate is unbelievably low, the house is a minimal commute, and the schools are great. It seemed like a deal worth jumping on. Down sides? Our initial offer was put in March 13 and we just closed mid-July. I understand this is not that unusual with short sales. Also, two weeks into living there a tiny drip in the new refrigerator I installed ran down the wall, into the downstairs room and so far did $5000 of damage! The joys of homeownership.

SoCal Renter says

marko - I’m finding more and more houses listed on Zillow and not the MLS. I think this market has created a trend. Could we be seeing the beginning of the end of the MLS system?
Austinhousingbubble - No plans to walk away if underwater. I plan to be in the house for 30 years (and pay it off before then). This will be my “home” and not an investment.
chrisborden - I have no clue on taxes. Probably the seller is on the hook. But all liens will need to be removed before I take title.
I’ve been pro-renting when it makes sense, and it has made sense for the past five years in California. But we are now at 1990s prices for much of SoCal and even almost 1980s prices. Will prices continue to fall to 1970s prices like I once predicted? Maybe. But I still prefer to buy a car rather than lease.
Actually, house buying is much like buying a car. Find a good used house with low mileage and live in it till it falls apart.
Those still waiting out the bubble will likely find an even better deal by waiting longer. I think we will have another recession dip - probably foriegn lender debt crisis this time. Certainly no rush to buy though. Prices will not be skyrocketing up ever again. I see a slow decline from here through 2012.
If the deal goes through, win for me. If not, no big loss. I will find something else. Win win!

I am in the 'good for you!' camp. And I have been a housing bear (not as much as 'bearmarket', 'member him?) since I started looking around the bay area for shelter in 2005. I have only spotty info on SoCal but everything I hear is it's been a bloodbath as we expected and I'll bet there are plenty of houses ready for the taking. Now in Norcal, it's a different story. In the zip codes I search, we're maybe 20% off peak and peak was 10x median income. Still at totally unsustainable price points, in my opinion.

Thanks for Patrick.net.

Tomrisk says

Also, Thanks for Patrick.net.
Honestly, in BayArea, especially in Peninsula, it is about time.

Then I recommend you buy something. Got a half a mil to put down for a townhouse so your rent matches mine? That's what you'd need. Or a little more cash even. I don't know what penninsula you live in but in the SF penninsula, prices are still out of whack with the populace's ability to pay.

Timing is everything.

Good luck. Sounds like a good deal if it goes through.

Then I recommend you buy something. Got a half a mil to put down for a townhouse so your rent matches mine? That’s what you’d need. Or a little more cash even. I don’t know what peninsula you live in but in the SF peninsula, prices are still out of whack with the populace’s ability to pay.

Yeah, have to agree, with pkowen here - not a lot of serious price reductions on the Peninsula. I rec that posters check out: http://www.burbed.com

As you can see from the postings, the craziness is still with us.

Nevertheless, ~*Congrats*~ to SoCal Renter for doing the research to find their own home! :) I've been using zillow a lot too - the MLS links provided by realtors merely have a fillable box for my email addy with no other property info. I am tired of this invasive tactic and have been since '07. How long before they catch-on that we don't want their spam??? Anyway, to make a looong story short, I use zillow almost exclusively now - I just don't take their "zestimates" seriously.

btw, for the interested, zillow has a couple of tutorials up on YouTube on how to best glean info from their site - may be worth it to check out. It can be a bit simplistic for some, however there is some very helpful info: http://www.youtube.com/watch?v=uaeAgfay01o&feature=channel_page

Sorry to see you leave the rants of us renters - you've been using that username since what, 2006??? Patrick should retire your username, lol :)

My only request is that you NOT treat us like the previous bunch of home"owners" did - sneeringly looking down upon us, having a nose-in-the-air attitude that made them too good to return a friendly "hello" in the morning, thinking that their "richer" simply because they hold a loan...well, you know the drill.

~Misstrial

"Then I recommend you buy something. Got a half a mil to put down for a townhouse so your rent matches mine? That’s what you’d need. Or a little more cash even. I don’t know what peninsula you live in but in the SF peninsula, prices are still out of whack with the populace’s ability to pay." - pkowen

Yeah, have to agree, with pkowen here - not a lot of serious price reductions on the Peninsula. I rec that posters check out: http://www.burbed.com

As you can see from the postings on burbed , the craziness is still with us.

Nevertheless, ~*Congrats*~ to SoCal Renter for doing the research to find their own home!

I’ve been using zillow a lot too - the MLS links provided by realtors merely have a fillable box for my email addy with no other property info. I am tired of this invasive tactic and have been since ‘07. How long before they catch-on that we don’t want their spam??? Anyway, to make a looong story short, I use zillow almost exclusively now - I just don’t take their “zestimates” seriously.

btw, for the interested, zillow has a couple of tutorials up on YouTube on how to best glean info from their site - may be worth it to check out. It can be a bit simplistic for some, however there is some very helpful info:

http://www.youtube.com/watch?v=uaeAgfay01o&feature=channel_page

Sorry to see you leave the rants of us renters - you’ve been using that username since what, 2006??? Patrick should retire your username, lol
My only request is that you NOT treat us like the previous bunch of home”owners” did - sneeringly looking down upon us, having a nose-in-the-air attitude that made them too good to return a friendly “hello” in the morning, thinking that their “richer” simply because they hold a loan…well, you know the drill.

~Misstrial

Misstrial says

I just don’t take their “zestimates” seriously.

Hi Tomrisk:

A short summary - zillow.com to enter address you are interested in to Zestimate & Charts - take a look at the Zestimate Information and Value Range field. Anything more than a $20k Value Range difference means that the home price is up-to-question as in this example of where I used to live:

http://www.zillow.com/homedetails/charts/51503112_zpid,5years_chartDuration

Knowing that the price or value range has a wide variation leave things open to interpretation and thus giving you some negotiation room.

hth

~Misstrial

congrats to SOCALRENTER...er BUYER :-)

Now, guys who said they just bought (SocalREnter, davidphan_7).. can you please tell us the CITY and/or ZIPCODE. This will help us all, I think.

Zillow like to cheer people up.

Misstrial - I'll never look down on my Patrick.net-ers. The community here saved me hundreds of thousands of dollars. Who knows what my path might have looked like if I had not found Patrick in 2006. I'll stick around; I enjoy like minded people and I still will never trust a real estate agent.

permanent-marker and others - Posting the zipcode or city helps you do what? Steal my identity? Steal my sale? You don't have to believe me if you don't want to. I don't care.

I've been interested in buying a house for four years now. I've made offers at various times over the past few years as many longtime readers will remember. My gut told me to refuse counter-offers. My gut was right. We made an offer on a house a year ago that was rejected. It finally sold last month for over $50k less than our offer.

The problem with the market has never been a lack of buyers. It has been a lack of reasonable sellers. Flippy McFlipperton chose to go bankrupt rather than take a loss. Now we have a flood of inventory hitting the market because of the sheeple mentallity. It is finally becoming conventional wisdom that house prices will continue to fall. This may mean it is time to buy.

Tomrisk says

Misstrial says

Hi Tomrisk:
A short summary - zillow.com to enter address you are interested in to Zestimate & Charts - take a look at the Zestimate Information and Value Range field. Anything more than a $20k Value Range difference means that the home price is up-to-question as in this example of where I used to live:
http://www.zillow.com/homedetails/charts/51503112_zpid,5years_chartDuration
Knowing that the price or value range has a wide variation leave things open to interpretation and thus giving you some negotiation room.
hth
~Misstrial

I c wat u saying.
But one good thing is they really cheer me up. At least, my newly purchased property on early this year, I already made $100k on Zillow dollars, that’s what they show on their zestimate.

Whoo-hoo! $100k in Zillow dollars?! Better run to the bank and get a HELOC.

HELOC is much much harder to get this day..

@Socal REnter

"permanent-marker and others - Posting the zipcode or city helps you do what? Steal my identity? Steal my sale? You don’t have to believe me if you don’t want to. I don’t care"

Dude, you got it wrong. I am just curious to know which cities have come down to some-basics that Patrick.netters are buying. that is all.
If you are skittish about letting out too many details before the sale closes, I understand. Please let us know afterwards.

Permanent-marker and Bap33 - No offense taken and none intended. After the sale closes I will give you folks the details.

Don't believe your eyes?

Zestimates are horseshit.

The only thing to go by on that website is the ten year sales history chart.

Tom, what does that information prove?
1) People could have gotten good deals, well below the Zestimate. Conclusion: Zestimates are worthless.
2) If you are claiming that this data shows increases in the area, well, those increases are around 15% for the middle 3 listings. Are you honestly claiming that prices have risen 15% in that area over the past year? This also proves Zestimates are worthless as they do not reflect reality.
Your data merely proves that Zestimates and Zillow dollars are worth less than a roll of toilet paper.

Peace.

drfelle says

Congratulations! (gritting my teeth in jealousy.)
I can’t seem to get in at or below what I pay in rent. (and I’m living right on the beach in SOCAL!)

San Clemente?

How about this: High Crime Area in East Bay

Feel better!