Am I justified in wishing for another real estate crash?

[quakerboy]

Ok.. so since Obama started the first time home buyers credit, I have been searching for a house. We have looked at hundreds, no exaggeration. Every house we liked ended up snapped up from under us, time after time. There sure wasn't any market slowing on ones we liked.

The latest one has been a nightmare. Its a bank owned, been empty for at least 15 months. Before we found it, it had been listed for going on 300 days. We started by making a low offer. They came back high, and after a few rounds we had agreed on a price. All that was left was who was going to take responsibility on a few hundred in HOA fees. And my wife and I were prepared to give on that point on the next counter. Then they decided not to respond at all. The other realtor says "they sure slowed down on all their homes this week, don't worry, just resubmit the offer". We do. a week goes by with no response. Realtor says "the computer system I have to submit through is messed up, just give me the offer one more time". We do. Another week, and natch.

Suddenly, we notice the listing has been suspended. And the place shows up on an online auction site for half of what we offered. And no one buys it. a week later, the realtor reactivates the listing, and drops the asking price 1000 below what we had negotiated to last time round. my wife is peeved, and says offer 2k less. We do. And the realtor says looks good. And the next day, the bank pulls the listing. A week later a new realtor lists it anew, at the same lower price. We resubmit the offer. And are told it takes a few days to get the online submission in order for the new Realtor.

a few days pass, the realtor calls and says "they say they will accept, with the following provisions..." Nothing unreasonable, so we agree, and she says she will get the paperwork to us asap. A week later, I get a call. The Realtor is very confused, the Bank has pulled the listing from her, and something about the title company buying back the mortgage, and noone even knows who owns it anymore.

All in all, I am feeling a little bit bitter. I kinda wish the market would drop so much that anyone with a spare $20 can afford a house, and the banks lose every red cent they have on any real estate deal.

On edit, not really. I understand it would likely hurt more individuals than it would help. But this has been a soul crushing experience.

[Tobin S.]

1. I hear you man

Even when a real estate deal goes the way it's supposed to it's still a nerve racking experience. I've owned 5 houses in my time, and I can relate when you say things aren't going like they should. Banks are the worst sellers to work with. They always require more time to consider offers. Most people get 24 hours. A bank may take a week. Banks will not negotiate at all on repairs to be made unless they are really desperate to get rid of a place. That's the way it goes around here anyway.

If it makes you feel any better, I stuck it to a bank one time on a property. I was buying the house as an investment property. It was bank owned and I negotiated a really good deal- or so I thought. I had asked for some repairs to be made, one of which was that the basement of the place had some surface mold on the walls. I waited and waited for them to get back to me, 2 weeks. The closing day came and went and I decided I didn't want that property anymore, just on principle, I was so pissed. They had defaulted on the contract so I took the out. They got back to me with a quickness the same day and I said no deal. They offered to make other concessions, but I told them that I was no longer interested. And boy did that feel good.

That's probably not the right way to do business looking at it from an investors point of view, but I am better off today for not buying that place. I was dealing right on the edge of the coming real estate financial disaster.

[quakerboy]

5. part of me is wondering if this is

the universe conspiring to make me hold off for some reason. Why I should get so lucky when others get screwed, I couldn't guess, which is why I don't give that theory much credence.

I think I've had about enough of focusing and trying to buy a house at a time. I think its shotgun time: throw out a bunch of ridiculously low offers and see if I get any bites. Unless something happens quick, in terms of an acceptance and deal, or an extension of the credit, I think I may not be buying soon after all, which sucks because having a place I could have family over for the holidays was important to me. If they don't sell me something soon, all my future offers will be an additional 10% lower anyway.

[TxRider]

2. Are you sure you don't need a better real estate agent?

[quakerboy]

3. Its not been our agent, its been the listing agent

where we have been getting crazy info and reversal after reversal. and given that they have put it under 2 listing agents, and probably a third soon, I think its probably not even the agent, but rather Freddie Mac that has all their strings tangled.

[stray cat]

4. Look at the repercusions the first one had - are you truly better off than a year ago?

[quakerboy]

6. Actually, yes

If I had bought when we first started looking, my bank would be dry and we would be stretched financially, because I was looking at more expensive places then. Now, Ive saved enough to have a cushion, and we are looking at the very low end.

I am feeling much better in the light of day. Still frustrated, but I have let go the bitterness, I think. Thinking maybe I will try for some other bargain. Or at worst, just hold on to my money and see what happens.

[Auggie]

7. You might get your wish in a few months: Option ARMS

"Option" mortgages to explode, officials warn

Reuters, 9-17-09

WASHINGTON (Reuters) - The federal government and states are girding themselves for the next foreclosure crisis in the country's housing downturn: payment option adjustable rate mortgages that are beginning to reset.

"Payment option ARMs are about to explode," Iowa Attorney General Tom Miller said after a Thursday meeting with members of President Barack Obama's administration to discuss ways to combat mortgage scams."That's the next round of potential foreclosures in our country," he said.

Option-ARMs are now considered among the riskiest offered during the recent housing boom and have left many borrowers owing more than their homes are worth. These "underwater" mortgages have been a driving force behind rising defaults and mounting foreclosures.

In Arizona, 128,000 of those mortgages will reset over the the next year and many have started to adjust this month, the state's attorney general, Terry Goddard, told Reuters after the meeting. "It's the other shoe," he said. "I can't say it's waiting to drop. It's dropping now."

MORE: http://www.reuters.com/article/wtUSInvestingNews/idUSTRE58G5U320090917

[quakerboy]

8. Plus the tax credit thing set to expire

I am no expert, but from what I have seen, if they let that drop, the market will slide significantly again.


I don't really want to see this happen. On the other hand, it would be nice to see housing prices come back in line with what people actually make. I just wish we could get there without the pain this is sure to cause a lot of families who got suckered into buying more than they could really afford.

[flvegan]

9. Walk away from this one.

If the title underwriter (not company) bought the mortgage back, that dirt has a big claim sitting on it. It makes sense about the back and forth with the listing. The title commitment was probably a disaster, and there was likely more going on legally after that foreclosure. As it stands right now, title to that property is probably completely unmarketable. Walk away. You may have dodged a bit of a bullet here.

[quakerboy]

10. Thank you for that bit of insight

Think I should put in an offer on the unit next door, listed by the same company?

[flvegan]

11. I can't answer that.

Each property has a different story (unless that mortgage was also on that unit, which would spread the claim to that unit as well). If the property looks good, and is in your price range, there's no harm in making an offer. If the commitment comes back AGAIN as a clunker, you may get the same runaround, but it's no loss to you. If the title is uninsurable/unmarketable, no underwriter will touch it until it's fixed. That said, just because it's the same listing company doesn't mean that it'll have the same problem necessarily.

[quakerboy]

12. It was more of a rhetorical question.

The next door one just showed up. Its in infinitely better shape, and has a better floor plan. It is also listed for over twice as much. We just did the paperwork to make a very low offer on it, but I really doubt we will even get a courtesy call in return, as our offer is under half of asking.

I do appreciate your feedback, though. We just found out more about the other one, with all the difficulties. Its not a title company buying it, its the "mortgage servicer". Which seems somehow odd, since we are well over a year after it was foreclosed on. But somehow it has moved from "belonging" to Freddie Mac to being owned by a division of BOA.