Home Buying & Real Estate Thread

[HankHill]

I'm going to try to answer all of these questions directly when possible.

Yes I agree a buyer could always switch up the financing after the offer is accepted. However, lets be honest those no money down payment programs are typically for first time home buyers etc. A first time buyer typically doesn't know of all their options. While I agree that strategy could work, its definitely going to be more work for the buyer to get all of that done in a timely manner. First time homebuyers, are typically the least likely to make such a move unless something falls through.

Let's be real if I told you I could get you a pre-approval requiring no money down, a fair rate, etc why would you even bother to look around until someone else tells you thats the reason you're not beating out other offers.


I've backed out of 1 contract my entire life (and I paid let the seller keep the earnest). So no I wouldn't back out but I'd also be less likely to take the 0 money down payment offer over a person paying a similar price with cash, 20% down conventional financing etc.

You have to take into consideration that the market was on fire for the last 2 years. Very few places are getting no offers.

Let’s say I make an offer with a pre-approval that shows 20% down payment. After we make the purchase agreement, I find a private local lending product with 0% down payment. Are you as the seller going to back out of the sale?

 

[sneakaprince]

Let’s say I make an offer with a pre-approval that shows 20% down payment. After we make the purchase agreement, I find a private local lending product with 0% down payment. Are you as the seller going to back out of the sale?

I already answered this and said no. However, you are clearly seasoned. If you could get approved for the 20% conventional I'm more inclined to believe you could get the deal done.

You forget to get a pre-approval on a 20% conventional loan you have to show funds or assets.

This product isn't really designed for the person who could have 20% down payment money.

Props to you if you can pull off that bait and switch. I'm all for that but the vast majority of people using this product don't have that option

 

[HankHill]

I already answered this and said no. However, you are clearly seasoned. If you could get approved for the 20% conventional I'm more inclined to believe you could get the deal done.

You forget to get a pre-approval on a 20% conventional loan you have to show funds or assets.

This product isn't really designed for the person who could have 20% down payment money.

Props to you if you can pull off that bait and switch. I'm all for that but thevast majority of people using this product don't have that option

So you don’t have a problem with no down payment; your problem is with first time buyer programs.

 

[sneakaprince]

So you don’t have a problem with no down payment; your problem is with first time buyer programs.

You must be skimming over some of my post. I clearly big upped those programs earlier today.

See below.

By no means am I damning this program either. I'm black I wanna see more of my people win not less. I also want to be realistic with people.

I always wanna remove obstacles instead of add them when it comes to homeownership. I started with an FHA loan too and I'm grateful that those opportunities exist. In a buyer's market an FHA loan is probably one of the best oportunities many people have at building generational wealth.

It’s why cash offers win so so so much more often even if slightly less. It costs a lot of time and money for sellers when a buyer doesn’t get financing in correctly and they have to relist a property because the buyers side stuff fell apart. Lot of hoops to jump through and it’s a lot better for a seller if this isn’t one of them.

Net net
Cash offers
20% down
all other sorts of offers

if you have those 3 you’re always going with the cash offer, then the 20%, then everything else as a seller.

See above. Thank God someone else said it.

0% down likely means more contingencies because the bank is taking on more risk. They are going to cross their T's and dot their I's in underwriting to ensure that if they are stuck holding the bag they have a bag that's at least worth holding (once again I can't blame them).

I think some people are confused because we keep mentioning VA loans and FHA loans. These are similar products that are currently available in most markets. I have no doubt that there could be other products I'm not hip to that offer buyers a chance to get in at little to no money down. What I know is that these types of products usually have more strings attached than say a conventional 5-20% or outright cash offer. As a seller I want the least amount of strings possible attached to my deals.

Maybe my team is more discerning than others but we trying to go all the way when we accept offers.

 

[keko jones]

So you don’t have a problem with no down payment; your problem is with first time buyer programs.

Dude makes no sense ...

Apples and Oranges ...

A person with a downpayment has no skin in the game if they put offers on multiple houses and never had to commit.

Is not like a buyer is putting 20% down on a conventional loan and then decides he wants out and the buyer is keeping the 20% down.

Unless there's a contract and money on escrow to guarantee the seller you're serious no matter how much money you have down, the buyer can walk at anytime ...

Like you said, this dude clearly has an issue with the type of loan not the capita being put down.

But enough...

 

[keko jones]

I already answered this and said no. However, you are clearly seasoned. If you could get approved for the 20% conventional I'm more inclined to believe you could get the deal done.

You forget to get a pre-approval on a 20% conventional loan you have to show funds or assets.

This product isn't really designed for the person who could have 20% down payment money.

Props to you if you can pull off that bait and switch. I'm all for that but thevast majority of people using this product don't have that option

Bro you're assuming a lot of stuff.

You might as well as for credit score.

But I understand ... my boy was buying a 950k home in Texas and the people were giving him **** because it was a VA loan ... little did they know he was is a chief engineer for lockheed martin making about 200k a year.

Dude walked and went to the next house .... the seller had the house listed for 6 months before reducing the price by 75k to get it sold.

This pandemics anttics will stop ... sellers got used to bidding wars, multiple offers, over ask offers for holes in the walls. If it reverts back, all this entitlement (ripping first time home buyers off) will stop and ya gonna take what comes. Always ask for a deposit to ensure the buyer means business and is not backing out and keep it moving. Obviously if you know your house needs work dont look at FHA or VA if you are listing for a lot more than comps demand.

That's the issue here, not the down payment.

 

[sneakaprince]

Dude makes no sense ...

Apples and Oranges ...

A person with a downpayment has no skin in the game if they put offers on multiple houses and never had to commit.

Show me where I said this or anything to this effect.

 

[sneakaprince]

Bro you're assuming a lot of stuff.

You might as well as for credit score.

Why do you think agents almost require a pre-approval before submitting an offer? When the offer with pre-approval is submitted I know as a seller that the credit score is already where it should be in order to buy. Thus, they run a credit check before issuing any pre-approval.


EDIT: and before you say "what if they were buying in cash?" which is totally different, they typically make you show proof of funds.

This pandemics anttics will stop ... sellers got used to bidding wars, multiple offers, over ask offers for holes in the walls. If it reverts back, all this entitlement (ripping first time home buyers off) will stop and ya gonna take what comes. Always ask for a deposit to ensure the buyer means business and is not backing out and keep it moving. Obviously if you know your house needs work dont look at FHA or VA if you are listing for a lot more than comps demand.

That's the issue here, not the down payment.

Read any of my post. I've always alluded or outright stated that this type of program is weaker in the current market because seller's have the luxury of receiving multiple offers. If the market were to revert back to a buyers market all of this is out of the window unless the house itself is in high demand and has competing offers.

No matter what condition the market is in if a home were to receive multiple offers and the seller has to choose between the conventional 20% downpayment offer or the 0% downpayment offer (yes, a good discerning agent will know what to look for) the buyer and agent are going to side with the conventional offer (at similar value) everytime. This is assuming that all other contingencies (appraisal, inspection, etc) are the same.

 

[sneakaprince]

But I understand ... my boy was buying a 950k home in Texas and the people were giving him **** because it was a VA loan ... little did they know he was is a chief engineer for lockheed martin making about 200k a year.

Dude walked and went to the next house .... the seller had the house listed for 6 months before reducing the price by 75k to get it sold.

You have a clear cut example of someone discriminating on an offer based on what type of loan is attached to it. How do you not see the similarities with a 0 money program?

While I agree the seller was dumb not to take the offer, there is no telling if he would've accepted only to have the VA appraisers come back and say the house appraised at 200 under agreed upon price. I know that sounds wild but the VA loans are known to have this happen.. See reddit below.








Yeah the seller was dumb not to at least see the offer through if there was nothing else on the table, but what's the point in agreeing to a deal if you know if you know it has a higher likelihood of not making it close?

 

[sole searchin]

I mean cash is king is similar.

If I’m a seller and someone has more cash (or all cash) I’d go with them if they waived contingencies/closed faster/etc depending on if the price was right (even lower then a traditional mortgage etc).

It happens all the time. Financing, etc doesn’t always work out and that time spent is wasted. Not sure what the argument is here (I guess not about $$$ aspect).

 

[sneakaprince]

But I'm crazy when I say it.

This realtor is literally flipping people from FHA to conventional to make their offers more competitive. FHA wasn't cutting it, but you guys think a 0 money down program will be better .

 

[sneeker]

my niece is deciding to move to either Georgia or California specifically San Juan Capistrano. told her that California would be nicer.

 

[moderndarwin]

Let’s say I make an offer with a pre-approval that shows 20% down payment. After we make the purchase agreement, I find a private local lending product with 0% down payment. Are you as the seller going to back out of the sale?

I actually did this. I had 5 lenders competing and the 10% down lender was able to get the most solid pre approval letter together done first. So our realtor used that one + proof of funds when making an offer. The purchase contract had 10% down listed on it and a high earnest money and a certain cap for interest rate (as a contingency) and a fast 21 day close. I ended up going with a lender that allowed me to do 5% down. You’re generally not “supposed” to do this and it gives room for the seller to back out of the transaction. In my case, they didn’t. It helped i had 800+ credit score and solid proof of funds. Was clear to them I had multiple lenders so getting financed wasn’t a risk…and trying to force me to use the higher down payment lender would of made the 21 day close not happen.

 

[moderndarwin]

Has anyone used flyhomes? I was tempted to go try that because they’re basically a cash offer on your behalf but had a great realtor and 5% down thing going on so didn’t make sense to try something new like that this go around.

 

[B Sox]

Let’s say I make an offer with a pre-approval that shows 20% down payment. After we make the purchase agreement, I find a private local lending product with 0% down payment. Are you as the seller going to back out of the sale?

Seller doesn't really have any recourse as long as the new financing doesn't alter the deal at all (net to seller, timeline, etc).

 

[keko jones]

But I'm crazy when I say it.

This realtor is literally flipping people from FHA to conventional to make their offers more competitive. FHA wasn't cutting it, but you guys think a 0 money down program will be better .

Bro ... I didn't bother to look at this.

This has 0 to do with what we are asking or talling and 100% on what you're selling.

You are equating a BOA promo with an FHA/VA loan. You're ASSUMING that because it's 0 down, the bank is going to be just as strick as a FHA/VA loan. Bottom line, these people sellers don't give a damn about 0% down, but rather the loan being used. The reason they don't want to deal with them is because 1. The realtor has engraved the horror stories in their mind. 2. The realtor already pointed out the many things they would have to fix to pass an FHA/VA loan. 3. The realtor already told them their house is not going to appraise for the asking price. It has zero to do with the money they are putting down.

Again, you're trying to convince some of us that because the FHA/VA yada yada yada you know the 0 down is going to be worst.

My question was why did OP find it funny and why would a person walk away from a deal because the buyer is putting 0% down. YOU STILL HAVE NOT ANSWERED WITHOUT SAYING FHA/VA and yet we aren't talking about that because we don't know the type of loan. You would think BOA never had FHA loans, like this is something new. They just said minorities can get a loan without any money down, they didn't say an FHA loan, that doesnt scream people at will not qualify ... you still have to be vetted and your credit worthiness will scrutinized.

I highly doubt an unemployeed person with 20% down would get approved for a home. An employed person person using a promotional deal is going to get approved and that's enough to show the buyers, an approval letter is serious ... not going to get laughed at or rejected solely on the % being put down.

What would turn a seller off are the contingencies or is not as good of an offer as the next person.

What you said about doing the same loan and taking less with a person that put money down is ..... nevermind.

Only way a seller takes someones lower asking price is if they have all cash and don't have to worry about financing falling, quicker closing, no contingencies or is a friend.

But FHA/VA yada yada yada.

 

[sneakaprince]

Bro ... I didn't bother to look at this.

This has 0 to do with what we are asking or talling and 100% on what you're selling.

You are equating a BOA promo with an FHA/VA loan. You're ASSUMING that because it's 0 down, the bank is going to be just as strick as a FHA/VA loan. Bottom line, these people sellers don't give a damn about 0% down, but rather the loan being used. The reason they don't want to deal with them is because 1. The realtor has engraved the horror stories in their mind. 2. The realtor already pointed out the many things they would have to fix to pass an FHA/VA loan. 3. The realtor already told them their house is not going to appraise for the asking price. It has zero to do with the money they are putting down.

Again, you're trying to convince some of us that because the FHA/VA yada yada yada you know the 0 down is going to be worst.

My question was why did OP find it funny and why would a person walk away from a deal because the buyer is putting 0% down. YOU STILL HAVE NOT ANSWERED WITHOUT SAYING FHA/VA and yet we aren't talking about that because we don't know the type of loan. You would think BOA never had FHA loans, like this is something new. They just said minorities can get a loan without any money down, they didn't say an FHA loan, that doesnt scream people at will not qualify ... you still have to be vetted and your credit worthiness will scrutinized.

I highly doubt an unemployeed person with 20% down would get approved for a home. An employed person person using a promotional deal is going to get approved and that's enough to show the buyers, an approval letter is serious ... not going to get laughed at or rejected solely on the % being put down.

What would turn a seller off are the contingencies or is not as good of an offer as the next person.

What you said about doing the same loan and taking less with a person that put money down is ..... nevermind.

Only way a seller takes someones lower asking price is if they have all cash and don't have to worry about financing falling, quicker closing, no contingencies or is a friend.

But FHA/VA yada yada yada.

Hey bro you got it. Go about your process your way. Imma go about it mine. Best of luck.

 

[HankHill]

I actually did this. I had 5 lenders competing and the 10% down lender was able to get the most solid pre approval letter together done first. So our realtor used that one + proof of funds when making an offer. The purchase contract had 10% down listed on it and a high earnest money and a certain cap for interest rate (as a contingency) and a fast 21 day close. I ended up going with a lender that allowed me to do 5% down. You’re generally not “supposed” to do this and it gives room for the seller to back out of the transaction. In my case, they didn’t. It helped i had 800+ credit score and solid proof of funds. Was clear to them I had multiple lenders so getting financed wasn’t a risk…and trying to force me to use the higher down payment lender would of made the 21 day close not happen.

Seller doesn't really have any recourse as long as the new financing doesn't alter the deal at all (net to seller, timeline, etc).

Agreed. This is what I’ve been getting at. With the process and contingencies being the same, there shouldn’t be a reason as to why a lower/non down payment loan makes the seller concerned. Yet, for some reason it being argued that the buyer not coming out of pocket for the down payment = no skin in the game = likely to walk away from the deal. If I put 20% down and seller contingencies aren’t being met, I’m still going to null the contract and get back my EMD. I’m not out a down payment or EMD so what was my skin in the game?

 

[keko jones]

Hey bro you got it. Go about your process your way. Imma go about it mine. Best of luck.

100%!! my process is accepting a qualified buyer that's serious about buying a house. If I knowy house is older or won't appraise, the listing will indicate Conventional loans or Cash offers only. Also an agree upob amount to be escrowed and applied to closing if the deals is finalized or forfeited if the buyer pulls out.

Been working for years. Thanks bud.

 

[sneakaprince]

100%!! my process is accepting a qualified buyer that's serious about buying a house. If I knowy house is older or won't appraise, the listing will indicate Conventional loans or Cash offers only. Also an agree upob amount to be escrowed and applied to closing if the deals is finalized or forfeited if the buyer pulls out.

Been working for years. Thanks bud.

I ain't gonna go back and forth with you fam if you don't understand that there is a ranked/ tiered system when it comes to accepting offers in a competitive market then that's on you.

I compared a NEW product with little to no data around it to a well established product that most people currently use to buy their first home.

Everyone who commented on this topic is speculating and making assumptions.

I'm happy your system works for you and blessing to you for accepting whatever offers meets your desire. As I've said from the beginning every deal is 50-50 from the moment you accept offer. We are just trying to add a percent or 2 in our favor by doing our due diligence and accepting the offer most likely to make it to close.

Time is money, I personally don't like wasting those things.

 

[ballinsam23]

In neighborhoods I look at it, nobody absolutely nobody takes an offer with less than 20% serious. Atleast 25% in most cases and even those get easily beat by full cash offers.

The agents showing in these neighborhoods, I don’t even think they take people with non conventional loans serious. Idk what it is but in my experiences it doesn’t happen.

 

[turbospartan]

When I bought, my offer was chosen by the sellers because I had proof of funds, mortgage approval letter, and down payment relative to the other offers. One other offer was the same as mine, but I believe it was an FHA loan. So the seller's chose mine instead.

I've had a friend sell a house to a VA loan and they had to jump through multiple hoops just to meet the minimum requirements. They were required to fix certain things (cracks in the porch steps, etc.) before it would even go through, and in the end he said he should've just went with the other non-VA offer which was less money, but he wouldn't have had to fix all that dumb ****.

My realtor explained to me that there is definitely a tier system for offers. Cash > 20%+ down Conventional > 5-20% Conventional > FHA / VA loan

Could've all been ********, but he was also a realtor for like 40+ years. I don't think anyone in here is saying that a seller would instantly back out of an offer if they saw the 0% down program loan, more so that if they had multiple offers... the 0% down is one of the least likely offers to be chosen, if everything else remains the same (ie the sale price is the same $400k; between a Cash Offer vs. 20% down vs. 0% down vs. VA/FHA).

 

[Raji Lowenthal]

Can you put down 20% for a VA loan? Seems like they offer the buyer the most protection from flip sellers etc.

 

[B Sox]

There is 1000% a tier system when sorting through offers.

 

[B Sox]

Can you put down 20% for a VA loan? Seems like they offer the buyer the most protection from flip sellers etc.

You CAN put as much down as you'd like with a VA loan. Within the past couple years veterans were definitely putting more down (or at least writing in their offer that they would) in order to make sellers feel more comfortable with their financial standing.