06-27-2009 04:55 PM - edited 06-27-2009 05:09 PM
I've been looking for a house for the past 3 months. I'm approved Fha with 20% down. Almost every house that we think is about to go thru or that we are the highest bidder, there some cash only a-hole that snakes it from us!!! Am I the only one???
How about the Family's that actually want to live at the house not rent it out for profit.
06-27-2009 05:13 PM
Westfoe - Read all the posts - You are definitely NOT alone!
Curious why you would go FHA though if you have 20% down. Conventional financing is much more appealing to a seller.
06-27-2009 05:51 PM
06-27-2009 06:07 PM
06-27-2009 06:12 PM
You are only risking 20% of the price. The bank is risking 80%. Cash buyers are risking 100% of the price. Sellers are risking bigger losses when your bank takes 2 months to tell them that they won't give you the money you think you're qualified for whatever reason. 20% down doesn't mean so much when the house loses 20% equity in months, then the "buyer" decides to walk away from the payments and stick it to the bank. 20% down only works when property values are stable or rising with little or no chance they will fall during the term of the loan.
This is what happens when state law allows homeowners to walk away from a mortgage through foreclosure and bankruptcy. Even though you are probably a good risk on an individual basis, on the whole, all buyers using mortgages pay the penalty for those who default in one way or another. Cash buyers never default on their own money, and they can close in weeks instead of months without the approval of anyone but themselves.
I'm seeing condos in the IE that are very well suited for families that can be purchased for cash using that 20% down payment for a single family house. They are priced less than two family cars. Condos can be great for kids, since you can get useful community benefits like swimming pools without paying the full expense yourself of maintaining it. Condo HOA fees also usually include landscaping and building insurance. So while I can understand the frustration of buying an expensive single family residence with big yard using financing, I think that many renters try to shoot too high for their first purchase miss the benefits of buying a "rent-free" apartment as first step to getting the bigger "dream" house in a later purchase in less than 10 years. Maybe you won't feel such animosity towards people buying with cash if you realize you may be able to do it yourself if you set your sights to home instead of house.
06-28-2009 07:20 AM
06-28-2009 10:07 AM
So, move out our my way. Were going to muscle through all the prized properties. You can have the bottom leftover condos. That's a CRAPPY attitude. Investers turning nice neighborhoods into rentals. You can not argue that renters don't care about the areas they live in. Your one of the reasons comp's are so screwed up. Yeah, that's good for the neighborhoods that non inversters want to live in.
06-28-2009 10:31 AM
Don't go FHA. That's a big red flag a seller will see as meaning your credit sucks or you can't qualify any other way. It's also usually MORE expensive than other lenders. Do some digging on your own. Don't blindly listen to what your agent is telling you. Verify EVERYTHING an agent tells you. There are a lot more crappy agents out there than good ones.
The unfortunate truth is that sellers would rather go with an all cash offer. The other unfortunate truth is that many of the agents out there are fixing the sales so they get both ends of the commision. You will have a better chance of landing a sale if you work with the selling agent rather than having your own buying agent.
06-28-2009 11:36 AM