I just made an all-cash $60K offer on a decent 3/2/2, 1650sf home. It's a short sale, and I'm the back-up offer. The house is listed at $90K. The realtor tells me the bank will accept $60K and will be very interested in an all-cash offer. The buyer in front of me may be having some problems getting his loan in order, so I'll know whether I've got the house within a few days.
For what it's worth, the house sold for $250K in 2005! It's in Brevard County on FL's east coast; 3 miles from the beach, Intracoastal, and boat ramps; 1 block off an attractive 18-hole public golf course; in a nice, walkable neighborhood; 1.5 mile from my office; corner 0.25 acre lot; built in 1959. The house needs about $15-$20K of work. A comparable rental would be $950 per month.
Any thoughts?
Just Made an Offer on a Short Sale
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jacob
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Yes, a dumb question. What are the technical details of buying a house in cash? (Maybe a different thread would work).
When we buy our first home (hopefully within a couple of years), I essentially plan to liquidate about 100k from my taxable account to pay for it. But how exactly does that work? I don't suppose I can just write a big check out of my broker account. How does one make sure that everything goes smoothly. Does the realtor handle this part? Sorry if this is a stupid question.
When we buy our first home (hopefully within a couple of years), I essentially plan to liquidate about 100k from my taxable account to pay for it. But how exactly does that work? I don't suppose I can just write a big check out of my broker account. How does one make sure that everything goes smoothly. Does the realtor handle this part? Sorry if this is a stupid question.
Sounds like a good find. Is it inland of the intracoastal? Good luck on the process.
I've wondered in FL where there are so many foreclosed and unoccupied homes... do you have a feel for how that translates to rental occupancy? I mean banks most likely are not trying to rent their holdings - so I'm sure the rental market must be better than the real estate market. Do you have much of a feel for it?
I've wondered in FL where there are so many foreclosed and unoccupied homes... do you have a feel for how that translates to rental occupancy? I mean banks most likely are not trying to rent their holdings - so I'm sure the rental market must be better than the real estate market. Do you have much of a feel for it?
You probably do write a big check out... to an escrow holder.
I recently looked at a short sale house, but have heard they can take forever to close, if at all (sometimes they list them with no indication whatsoever that the bank will accept). Plus, you'll end up stuck with most of the costs the seller usually handles.
I recently looked at a short sale house, but have heard they can take forever to close, if at all (sometimes they list them with no indication whatsoever that the bank will accept). Plus, you'll end up stuck with most of the costs the seller usually handles.
@Jacob
In the West, the escrow period covers the all-cash transaction. You write a check. It clears. All other things being equal, escrow closes and you've got the deed and the keys.
In the East, many RE transactions are handled by attorneys for a fee in the high three figures. You write your attorney a check to his trust account. It clears. He writes a check from his trust account to the seller, or secures a cashier's check from the local bank.
While some period of time to clear all the mutual contigencies is warranted, typically an all-cash offer reduces that period from a matter of 60-90 days to perhaps 14.
In the West, the escrow period covers the all-cash transaction. You write a check. It clears. All other things being equal, escrow closes and you've got the deed and the keys.
In the East, many RE transactions are handled by attorneys for a fee in the high three figures. You write your attorney a check to his trust account. It clears. He writes a check from his trust account to the seller, or secures a cashier's check from the local bank.
While some period of time to clear all the mutual contigencies is warranted, typically an all-cash offer reduces that period from a matter of 60-90 days to perhaps 14.
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Mr. Overlord
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@Jacob
I made an all-cash purchase on property in Florida last year. First I secured a cashier's check for a sizable deposit and mailed it to my realtor's attorney (I did not use an attorney). She kept this amount in escrow. Shortly before the closing, I got a second cashier's check for the balance. The second check and the deposit in escrow was given to the seller at the closing.
FWIW I was told I could have also wired the balance into an escrow account too.
I made an all-cash purchase on property in Florida last year. First I secured a cashier's check for a sizable deposit and mailed it to my realtor's attorney (I did not use an attorney). She kept this amount in escrow. Shortly before the closing, I got a second cashier's check for the balance. The second check and the deposit in escrow was given to the seller at the closing.
FWIW I was told I could have also wired the balance into an escrow account too.
Good luck on your good find! This is the time for cash, or "cash is king". I also looked at a short sale here the other day, and it was an overdone, underbuilt shattered dream someone had. This clown who was buying the house had hardwood floors and he painted them black. That's right---gloss black.
I suspected a meth lab due to some smells and the garage was a set of tables and there was a gas range in it. "OK, so they cook in the garage, don't you"? Why does anyone need about 15 or so 30 gallon trash cans at the house? Hardly anything was finished on the house. Like no windows caulked or rails on the deck, or working light fixtures, etc.
However, sometimes there are good deals out there. In this case, you might have needed the county sheriff and a platoon of hired guns to get them out of the house if you bought it.
Hopefully, you will get a real good deal!
I suspected a meth lab due to some smells and the garage was a set of tables and there was a gas range in it. "OK, so they cook in the garage, don't you"? Why does anyone need about 15 or so 30 gallon trash cans at the house? Hardly anything was finished on the house. Like no windows caulked or rails on the deck, or working light fixtures, etc.
However, sometimes there are good deals out there. In this case, you might have needed the county sheriff and a platoon of hired guns to get them out of the house if you bought it.
Hopefully, you will get a real good deal!
Thanks for the thoughts. @Jacob, et al: Right, for an all-cash purchase, I simply bring a certified check in the full amount + closing costs to the closing. I don't have a buyer's agent or a lawyer. The closing will be at a title agency. In FL, the seller traditionally pays nearly all closing costs, including title search. Of course, this is negotiable. I expect my closing costs to be under $100. The last house I bought all-cash my closing costs were $10. Within 7 days of bank's acceptance of my offer, I'll pay about $400 for a home inspection.
With an all-cash purchase, I don't have to pay any lender fees, appraisals, lender's title search, etc. which can run several thousand dollars. A lender will require that the borrower buy home insurance and pre-pay a large amount of property taxes. The savings have to be measured against foregone interest earnings from pulling the all-cash out of savings vis-a-vis paying mortgage interest.
In FL, insurance on this $60K house will run about $3000+ per year. I plan on self-insuring by routinely saving, say, $300 per month in a dedicated interest-bearing account.
@Chilly. Yes, the house is two miles west of the Intracoastal. There are many foreclosures in FL, but they seem to be hard to find and difficult for the novice to buy. What I've found is that some prices might seem low (as compared to history, like the one I'm buying), but that's what the gentle hand of the market is saying it's worth. Rents had come down a little bit about two years ago, but are creeping back up. Rents vary widely depending on city and neighborhod. Decent, single-family homes and oveanfront condos always get a premium rent. There's plenty of junky places and crappy neighborhoods where rents are a little bit lower (but not that much compared to the nice places), but turnover his high. The $200-$300 premium that the nice places get simply block out many, many renters.
With an all-cash purchase, I don't have to pay any lender fees, appraisals, lender's title search, etc. which can run several thousand dollars. A lender will require that the borrower buy home insurance and pre-pay a large amount of property taxes. The savings have to be measured against foregone interest earnings from pulling the all-cash out of savings vis-a-vis paying mortgage interest.
In FL, insurance on this $60K house will run about $3000+ per year. I plan on self-insuring by routinely saving, say, $300 per month in a dedicated interest-bearing account.
@Chilly. Yes, the house is two miles west of the Intracoastal. There are many foreclosures in FL, but they seem to be hard to find and difficult for the novice to buy. What I've found is that some prices might seem low (as compared to history, like the one I'm buying), but that's what the gentle hand of the market is saying it's worth. Rents had come down a little bit about two years ago, but are creeping back up. Rents vary widely depending on city and neighborhod. Decent, single-family homes and oveanfront condos always get a premium rent. There's plenty of junky places and crappy neighborhoods where rents are a little bit lower (but not that much compared to the nice places), but turnover his high. The $200-$300 premium that the nice places get simply block out many, many renters.
What are taxes and/or HOA fees? And how are they trending: stable, rising rapidly, so on?... Sound like an ideal location for you.
You can have the closer request a copy of the dead before you decide to get title insurance or not. If it's a warranty dead from an REO I'd forgo the title insurance, unless it is cheap. If it is a quitclaim, I would get title insurance... But the individual still "owns" it right? I'd probably get the insurance.
You can have the closer request a copy of the dead before you decide to get title insurance or not. If it's a warranty dead from an REO I'd forgo the title insurance, unless it is cheap. If it is a quitclaim, I would get title insurance... But the individual still "owns" it right? I'd probably get the insurance.
@JohnnyH: I'm buying a single-family home in an older neighborhood w/o HOA fees. Property taxes in Brevard County run approximately 2% of the taxable value of the home. The taxable value = assessed value - homstead and other exemptions. The assessed value is generally pretty close to the market value. The County just set the assessed value on this place at $75K. So, the 2011 property tax will be approximately, 2% X ($75K - $50K homestead exemption) = $500. Sweet!
FL property tax law has a lot of odd bits and pieces to it, but it's generally pretty favorable to the homesteaded owner. As property values continue to fall then, generally, assessed values fall. But there are exceptions, e.g. the "recapture rule."
Good points on the title insurance.
FL property tax law has a lot of odd bits and pieces to it, but it's generally pretty favorable to the homesteaded owner. As property values continue to fall then, generally, assessed values fall. But there are exceptions, e.g. the "recapture rule."
Good points on the title insurance.
Andre, you may not HAVE to do a title search, but you're still going to, right? Are you going to do your own search?
The seller may traditionally pay for a lot of stuff, but I've heard this isn't the case with short sales. In short sales, the seller has no money! If you are somehow getting a near-foreclosure seller to pay a bunch of fees, you are da man.
The seller may traditionally pay for a lot of stuff, but I've heard this isn't the case with short sales. In short sales, the seller has no money! If you are somehow getting a near-foreclosure seller to pay a bunch of fees, you are da man.
@JohnnyH: I'm done with roommates at this point of my life. I plan on doing many of the repairs myself over time.
@dragoncar: Right, I'll certainly be sure to get title insurance and be sure of who pays what at closing. The seller hasn't paid her mortage in over two years and just recently vacated the place. She paid $250K for it in '05. Now it's selling for $60K! Crazy! Someone, is still paying the utilities and lawn care.
I'm the back-up offer. No firm answer yet.
@dragoncar: Right, I'll certainly be sure to get title insurance and be sure of who pays what at closing. The seller hasn't paid her mortage in over two years and just recently vacated the place. She paid $250K for it in '05. Now it's selling for $60K! Crazy! Someone, is still paying the utilities and lawn care.
I'm the back-up offer. No firm answer yet.
Well, my $60K offer has been accepted! I close in three weeks! No more rent payments for me for, well, maybe forever! I think I can get the place in pretty good condition for $10K and doing much of the work myself. 3/2/2, 1650 sq ft, golf course neighborhood w/ view; 1.5 miles from work; 3 miles from the Atlantic Ocean! I can't believe it -- this thing sold for $250K in 2005! (Not that that means much.) My experience has shown me that in my area of east central coastal FL, there's not much inventory under $100K, and what is available at that price is small, old, and in need of a lot of work. On the other hand, in the central parts of the state and in less developed areas, many 1200 sf homes sell for well under $100K.
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George the original one
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SimpleLife
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Re: Just Made an Offer on a Short Sale
That's a steal andre. In the past when I've paid cash I did a wire transfer. But my second and third houses I did not pay cash, just the down payment. Second house I used a cashiers check. Third house I wired the money just like the cash payment on the first one.
Care to post some pics, I'm curious as to the condition. Also, what city and zip code is this in? Feel free to PM me. I've considered moving to FL due to the lower real estate prices. I just bought my third house for 300K in WA, and am seeing people buying pretty nice livable houses for peanuts elsewhere, and I'm thinking "why am I still here?"
My last house is 250K and sandwiched in between ghettos, though it is very walkable and a convenient public transportation and freeway commuting area.
Care to post some pics, I'm curious as to the condition. Also, what city and zip code is this in? Feel free to PM me. I've considered moving to FL due to the lower real estate prices. I just bought my third house for 300K in WA, and am seeing people buying pretty nice livable houses for peanuts elsewhere, and I'm thinking "why am I still here?"
My last house is 250K and sandwiched in between ghettos, though it is very walkable and a convenient public transportation and freeway commuting area.