Housing market is too far gone.

saabguy

Saab-free since 2013. Mortgage guru
OT Supporter
Aug 11, 2003
26,103
Loserville. Population: 1
are they still giving incentive to use their in house lender? rates are usually pretty market competitive and they literally exist to close deals for the builder. unless there is no incentive and your guy can beat their pricing substantially there really isnt a reason not to use the in house lender, I say this having been in the in house lender for several of the big public builders from 2010-2017.
I’ve seen lots where the rates and fees were artificially high so they can “give back” a $2500 credit. I’ve seen some where they “give” a $10k incentive and it’s hard to compete with. It’s great if the buyer takes them up on their offer, bumps up the rate to cover ALL closing costs, etc. And the day after closing they start a refi application so the in house lender gets hit with an EPO, lol. It’s like taking the “dealer financing” incentive at the car dealership and then refinancing with the bank you really want after.
 
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Remy Bressant

Boots in the cab SMDFTB
OT Supporter
Jul 24, 2015
40,107
SoCal
I’ve seen lots where the rates and fees were artificially high so they can “give back” a $2500 credit. I’ve seen some where they “give” a $10k incentive and it’s hard to compete with. It’s great if the buyer takes them up on their offer, bumps up the rate to cover ALL closing costs, etc. And the day after closing they start a refi application so the in house lender gets hit with an EPO, lol. It’s like taking the “dealer financing” incentive at the car dealership and then refinancing with the bank you really want after.
this can also be true, its been some years and the market is very different now.
as the outside lender we used to have to cut our bps real lean for those deals but being handed 30-50 a month from all their projects in a certain area was more than worth it.
 

saabguy

Saab-free since 2013. Mortgage guru
OT Supporter
Aug 11, 2003
26,103
Loserville. Population: 1
Lennar Mortgage is their mortgage company, I believe it used to be called Eagle home loans.
that company literally exists to fund Lennar home purchases on time, they drive their staff like a sweat shop and they did not miss closings or lose deals when I was in the business. that may have changed in the last 5 years.

from time to time Lennar will do an MSA with another mortgage company on some of their projects, which is essentially a mortgage company paying $$$$$ to be the in house lender on a project. those guys are equally capable especially in a major metropolitan area.
They are dumb dumbs

(Not me):
4D1C2F2D-D4DC-4A27-9952-539841C9196A.jpeg
 

Slimmy

Yep.
Mar 14, 2000
140,484
Ft. Lauderdale
Lennar Mortgage is their mortgage company, I believe it used to be called Eagle home loans.
that company literally exists to fund Lennar home purchases on time, they drive their staff like a sweat shop and they did not miss closings or lose deals when I was in the business. that may have changed in the last 5 years.

from time to time Lennar will do an MSA with another mortgage company on some of their projects, which is essentially a mortgage company paying $$$$$ to be the in house lender on a project. those guys are equally capable especially in a major metropolitan area.

I’ve seen lots where the rates and fees were artificially high so they can “give back” a $2500 credit. I’ve seen some where they “give” a $10k incentive and it’s hard to compete with. It’s great if the buyer takes them up on their offer, bumps up the rate to cover ALL closing costs, etc. And the day after closing they start a refi application so the in house lender gets hit with an EPO, lol. It’s like taking the “dealer financing” incentive at the car dealership and then refinancing with the bank you really want after.

I will check back into this thread once we get to the rate lock-in period. 👍

For now, I have a pre-approval from Better, so that should be sufficient for the offer requirements.
 
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atxmike

This is my custom title
OT Supporter
Nov 28, 2007
2,451
Austin, TX
no motivation. I invited one appraiser to speak at a luncheon to a group of agents, and he said it's not in his interest to go higher than sales price. Because if something goes bad with the loan down the road, and there is a forensic underwriter scrubbing the file, he may get called on the stand to testify why he valued the house at $X when it was under contract for less.

On the "grid" where you have the comps listed and all the value adjustments, you come up with the net adjusted price for each. If the 3 net adjusted prices are $630k, $635k, and $675k, and the house is under contract for $650k, then $650k is the appraised value because the price is "bracketed" by a lower & higher value. That same appraisal, if the parties decide they want to increase sales price to $660k so the seller can cover $10k in closing costs, just submit the amendment to the appraiser, and bam...now appraised value is $660k because it's still bracketed. "when the subject property price is bracketed by the adjusted comp prices, the sales price IS the market price."

So if your appraisal comes back higher than contract price does that mean the appraised value is the lower end of the price bracket and you are getting a really good deal?
 

saabguy

Saab-free since 2013. Mortgage guru
OT Supporter
Aug 11, 2003
26,103
Loserville. Population: 1
Don’t do business with that piece of shit company Better
Feelin’ cute

Might lay off 40% of my workforce via zoom and emphasize how difficult if a time it is for me

Idk


vishal-garg.jpg
 

saabguy

Saab-free since 2013. Mortgage guru
OT Supporter
Aug 11, 2003
26,103
Loserville. Population: 1
So if your appraisal comes back higher than contract price does that mean the appraised value is the lower end of the price bracket and you are getting a really good deal?
Not necessarily...

some appraisers will still appraise higher than contract price. Some will stick to contract price, even if they think the value is higher. In theory, the adjusted values of the comps should all be relatively close to the sales price you've agreed to. For example, this is a rural property, hard to comp out because of acreage, usage, etc. They are buying for $440k. The adjusted values of the 3 best comps are $497, 456, and $568k. He ended up pegging it at $512k. That's somewhere in the ballpark based on his opinion of value. But you can see all the adjustments and how it changes the "adjusted value" vs. "sales price" when comparing subject property to other sales

1652125117975.png
 

saabguy

Saab-free since 2013. Mortgage guru
OT Supporter
Aug 11, 2003
26,103
Loserville. Population: 1
I probably won’t, but it was really easy to get the pre-approval at least.
Now that they have shown hundreds of millions in losses the last few quarters, their offerings aren't nearly as competitive as they used to be. Go figure when you price out loans at razor thin margins and it's not enough to cover overhead...you're gonna have a bad time
 
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stevezissou

OT Supporter
Jul 15, 2009
44,150
US
Now that they have shown hundreds of millions in losses the last few quarters, their offerings aren't nearly as competitive as they used to be. Go figure when you price out loans at razor thin margins and it's not enough to cover overhead...you're gonna have a bad time
aka "race to the bottom?"
 
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lescivic

OT Supporter
Oct 13, 2003
1,837
Space Coast FL
In the two neighborhoods we’re looking at, yes.

They were also charging it for the neighborhoods we looked at in Viera as well.
Sure it’s coming eventually with the other builders. Wife wants to move to Viera area but it’s become stupid expensive. Was reading an article that listed Titusville-Melbourne-Palm Bay as one of the most overvalued areas in the country.
 

Slimmy

Yep.
Mar 14, 2000
140,484
Ft. Lauderdale
Sure it’s coming eventually with the other builders. Wife wants to move to Viera area but it’s become stupid expensive. Was reading an article that listed Titusville-Melbourne-Palm Bay as one of the most overvalued areas in the country.
Yea, we looked at various neighborhoods around there, and the premiums are getting too high for the Viera area, so we shifted to SW Florida, where it seems to be a little more affordable. I have no preference, just want to be somewhere close to water as I plan to get a boat in the next 1-2 years.
 

10dementianal

Well-Known Member
Mar 29, 2007
15,456
The wife and I drove around a smaller community yesterday that is tucked out of the way but still far South and pretty far East of the major metro area. Saw several DR Horton signs up @Cashishift Platteview making it BIG lol
 

DaninTexas

Well-Known Member
Aug 20, 2004
10,487
Dallas, Tx
I'm officially under contract - fucking finally. This house looks like it's going to be worth the wait and torment.

How do you guys feel about buying points to reduce your rate right now? Part of me expects rates to drop in the next year due to recession where I could refi - but I'm kinda stupid on this subject.
IMO Rates will get to 7% this year.

I also personally think we will NEVER see rates in the 2% to 4% range in our lives again.
 
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Menger

OT Supporter
Nov 23, 2011
23,792
Well I offered 10% over list, a $7500 appraisal gap, and to eat $5k worth of inspection related repairs and I came in 2nd of 4 offers :hs:
Talked to realtor. Changed the language on my secondary offer to match what the selling agent wanted ... which was a straight up offer of $11k less than the max I offered before. So I don't know what if anything was better about the other offer they accepted, or if they just got some kind of sob story and sold the house for less to someone else :hs:
 

saabguy

Saab-free since 2013. Mortgage guru
OT Supporter
Aug 11, 2003
26,103
Loserville. Population: 1
I'm officially under contract - fucking finally. This house looks like it's going to be worth the wait and torment.

How do you guys feel about buying points to reduce your rate right now? Part of me expects rates to drop in the next year due to recession where I could refi - but I'm kinda stupid on this subject.
It depends on the cost, what the reduction in rate it buys you, and how long it takes to recoup the up front cost you’d be paying.
 
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Mejnoon

Well-Known Member
May 6, 2000
39,489
Omaha, NE
You're the expert so I won't try to argue with you. But you still didn't address the fact that rates will keep going up until inflation is under control. If you think that won't have a cooling effect on the housing market I guess we'll just agree to disagree.
I mean, of course it will, rate increases are already cooling the market off. But the supply issue persists and cannot be alleviated quickly, and rents have appreciated as fast or faster than home prices. There is no affordability advantage to renting in most local markets.

High rents will effectively establish a price floor for housing. Investor demand for hard assets is high and increasing.

They’re not saying it out loud but institutional investors pouring money in to housing feels like a flight to quality to me, and it’s far from over.
 

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