Thinking of buying a house and extremely nervous

[starry_solo]

This didn't sound right to me, so I shot a message to a Realtor friend and she says if you are paying cash, making an offer with out contingencies is possible.
But she says she isn't aware of any lender that will fund a mortgage if the sale doesn't have an inspection contingency. But she does admit, one third of all sales currently here ARE cash.

my lender funded the mortgage without an inspection occurring, other than the normal termite one. this is in CA when the bubble burst

 

[jerseygal]

The house we bought was in that range and the problem with people paying so far above asking price is financing. If you're getting a mortgage, most banks won't appraise a property $30,000+ above asking price, so buyers will either have to come up with the additional in cash or cancel the sale. We were not willing to go above asking price because of that problem.

We are upsizing and only plan on being in this house for the next 10-15 years, so we know it won't be our forever home.

Exactly, house won’t appraise out!

 

[spiders]

I personally think appraisals are ridiculous. Unless the selling price is significantly higher than the market estimate (say, at least 15%) then that should be good enough. Something is only worth what someone is actually willing to pay for it.

 

[Shelly F - Ohio]

@Shelly F - Ohio, how was the house? Did you make an offer? I am curious.

No we did not make an offer. Though we had our heart set on it, it has some major flaws. No coat closets, I would loose a lot of kitchen cupboards, and the two other bedrooms were small. The house has a sump pump that was not installed correctly and drained out to a 3 foot pipe in the middle of the backyard but the pipe is vertically in the ground and has not outlet on it so the water just sits in the pipe till the ground absorbs the water. When it rains at our house our sump runs quit a bit. This house would only be able to do one maybe 2 pumps of the water before the water would back up into the house. The system was rather strange. Backyard was small I would say it was only 50 feet from the back of the house. Pictures of the yard made it look longer But the house has a pending offer on it now.
So we will continue to save money for another house

 

[Shelly F - Ohio]

You can always adjust your mortgage interest lower, but you can’t do the same with mortgage principal (the purchase price).

Right now, real estate is doing incredibly well from all the cheap money (low interest rates) that government has created.



When it’s a strong seller’s market as it is now, it’s not uncommon for winning bids to not have any contingencies.

Oh I know the mortgage industry is doing great. Hubby works for the IT dept of a mortgage company and it has been all hands on deck 24/7 for the past few months.

 

[Breezy_Carol]

@Shelly F - Ohio , thanks for the update. Maybe the next house will be just what you are looking for.

 

[KBoopaloo]

No we did not make an offer. Though we had our heart set on it, it has some major flaws. No coat closets, I would loose a lot of kitchen cupboards, and the two other bedrooms were small. The house has a sump pump that was not installed correctly and drained out to a 3 foot pipe in the middle of the backyard but the pipe is vertically in the ground and has not outlet on it so the water just sits in the pipe till the ground absorbs the water. When it rains at our house our sump runs quit a bit. This house would only be able to do one maybe 2 pumps of the water before the water would back up into the house. The system was rather strange. Backyard was small I would say it was only 50 feet from the back of the house. Pictures of the yard made it look longer But the house has a pending offer on it now.
So we will continue to save money for another house

You’ll find the right one! But it is such a stress inducing process - I totally understand your nerves.

 

[godisney14]

This didn't sound right to me, so I shot a message to a Realtor friend and she says if you are paying cash, making an offer with out contingencies is possible.
But she says she isn't aware of any lender that will fund a mortgage if the sale doesn't have an inspection contingency. But she does admit, one third of all sales currently here ARE cash.

As others have already mentioned now, the lenders need to send their appraiser if you’re getting a loan. The appraisal is for the protection of the lender. You’ll just need to come up with more cash at close if it doesn’t appraise for as much as what’s on the purchase agreement.
But, that has no bearing on whether you, personally, have an inspection or loan contingency on the purchase agreement.
We bought our current place using a BofA loan with no inspection & loan contingency.

 

[Colleen27]

I personally think appraisals are ridiculous. Unless the selling price is significantly higher than the market estimate (say, at least 15%) then that should be good enough. Something is only worth what someone is actually willing to pay for it.

I agree. In the area where DS is looking to buy, there's a serious problem with accuracy of appraisals because of the reliance on comps and the difficulty of getting apples-to-apples comps in a city like Detroit where a significant chunk of the housing stock are total gut job level fixer uppers and/or foreclosures (tax or otherwise). He's looking at the low-to-middle end of the price range for move-in-ready homes, but comps in those zip codes inevitably include vacant houses with significant fire, water or scrapper damage.

 

[tvguy]

I personally think appraisals are ridiculous. Unless the selling price is significantly higher than the market estimate (say, at least 15%) then that should be good enough. Something is only worth what someone is actually willing to pay for it.

How they are done can be ridiculous. I've seen more than one undercover story on real estate appraisers literally just driving by a house without stopping to do their appraisal.

 

[Disneybuckeye]

How they are done can be ridiculous. I've seen more than one undercover story on real estate appraisers literally just driving by a house without stopping to do their appraisal.

When we refinanced out last house years ago the appraisal was set up as a drive by. We owed about a quarter of what the house was worth and a visual was all the lender required. But of course if you saw it or read it then it must be true.

Our oldest DS put an offer in on Friday on a town home and went $10k over asking. Now, that was only a few percent over, but the offer was definitely more than fair compared to other comps. He was $40k under what the house ended up selling for as he declined out of the bidding war. We told him it might be better to wait until fall or winter to see if the buying frenzy subsides.

 

[tvguy]

my lender funded the mortgage without an inspection occurring, other than the normal termite one. this is in CA when the bubble burst

You should have had to have had a safety inspection too verifying working smoke detectors, carbon monoxide detectors (if the house has gas appliances or an attached garage) and that the water heater has an earthquake strap. The Realtor recommended a guy who only charged $75 to verify that was all in place, walked in, pushed the test button the the detectors, opened the water heater closet and left.

 

[china mom]

This didn't sound right to me, so I shot a message to a Realtor friend and she says if you are paying cash, making an offer with out contingencies is possible.
But she says she isn't aware of any lender that will fund a mortgage if the sale doesn't have an inspection contingency. But she does admit, one third of all sales currently here ARE cash.

I just bought two houses last Wednesday, both with mortgages, neither with a home inspection. The lender did require an appraisal, of course.

 

[Disneybuckeye]

Around here a home inspection is not a requirement of purchase. Most people who are buying them to live in request an inspection and they can back out with no repercussions if they are not happy with what is found.

People buying to rent or fix generally do not care.

When we bought our lake home we did not have an inspection done. Of course the house went into three dumpsters two weeks later.

 

[Searc]

I just bought two houses last Wednesday, both with mortgages, neither with a home inspection. The lender did require an appraisal, of course.

Inspections are not required, as you know. Whether a buyer chooses to have one done or make it a contingency on the offer to purchase is the buyer's choice.

 

[ReneeA]

We have purchased 2 homes, both with mortgages, without inspections. DH works in the trades and has a better eye for construction and building codes than most inspectors around here anyway. The house we are currently in, we paid for 2 inspections after putting in the offer - one on the 50+ years old in ground pool (definitely had major issues) and one for the heating and cooling since the previous owner liked to do things himself, but had no idea how to do anything properly.