Home Buying & Real Estate Thread

[keko jones]

Funniest thing I've read today.

with the exception of Detroit, good luck getting an offer accepted with $0 DP

Not sure what this means?

Why would a seller care if you put money down or not?

 

[sneakaprince]

Not sure what this means?

Why would a seller care if you put money down or not?

Too easy to walk away with no money.

A lot of those programs also come with crazy strings.

My vet brothers please forgive me when I say this, trust me I appreciate your service.

When the market was crazy hot my realtor kept it real with me and said she wouldn't even entertain offers with VA loans. VA loans and FHA loans have a reputation for ****** appraising that typically undervalues a house. They are also more stringent on condition of the home being purchased.

As a seller if I have two offers of equal value (maybe even one for slightly less) attached to a VA Loan VS a conventional, I'd take the conventional everytime. Much more likely to make it all the way to the finish line, plus buyer has skin in the game via earnest money etc.

At the end of the day a deal can always fall apart but it's even easier to walk away when a person has $0 investment in it going through.

 

[keko jones]

Too easy to walk away with no money.

A lot of those programs also come with crazy strings.

My vet brothers please forgive me when I say this, trust me I appreciate your service.

When the market was crazy hot my realtor kept it real with me and said she wouldn't even entertain offers with VA loans. VA loans and FHA loans have a reputation for ****ty appraising that typically undervalues a house. They are also more stringent on condition of the home being purchased.

As a seller if I have two offers of equal value (maybe even one for slightly less) attached to a VA Loan VS a conventional, I'd take the conventional everytime. Much more likely to make it all the way to the finish line, plus buyer has skin in the game via earnest money etc.

At the end of the day a deal can always fall apart but it's even easier to walk away when a person has $0 investment in it going through.

Again what no money down vs money down has to do with the seller? Why will they turn an offer down?

When it comes to VA, they aren't going to approve a vet for more than what the house is worth .... during the pandemic house where selling for much much more than theor worth ... once the market adjust the house are going to be worth more but not what a lot of people paid.

FHA is a problem because they will point everything out that sellers don't want to fix. Obviously this was an issue during the pandemic because buyers were desperate enough to buh houses unseen, so why bother with VA and FHA that are trying to protect their investment? Once houses start sitting for months and people can actually negotiate again those FHA and VA loans are going to be good.

 

[ballinsam23]

Most of the sought after areas, no one is accepting an FHA loan. Gotta be minimum 20% down.

 

[keko jones]

Most of the sought after areas, no one is accepting an FHA loan. Gotta be minimum 20% down.

I'm still tripping about the down payment. Is the BoA NoDown No Closing a FHA loan? If not, what does it matter to the seller what a person puts down?

 

[sneakaprince]

Again what no money down vs money down has to do with the seller? Why will they turn an offer down?

When it comes to VA, they aren't going to approve a vet for more than what the house is worth .... during the pandemic house where selling for much much more than theor worth ... once the market adjust the house are going to be worth more but not what a lot of people paid.

FHA is a problem because they will point everything out that sellers don't want to fix. Obviously this was an issue during the pandemic because buyers were desperate enough to buh houses unseen, so why bother with VA and FHA that are trying to protect their investment? Once houses start sitting for months and people can actually negotiate again those FHA and VA loans are going to be good.

I highly doubt a no money down program is going to have less strings than a VA Loan or FHA loan.

Some of those VA loans are actually no money down, but the VA uses their own appraises who like you said "protect" the investment by making sure you aren't paying more than the house is actually worth. The downside of that is to absolutely ensure you the buyer isn't paying too much they will use the lowest comps possible and they have their own appraisers.

If this Bank of America program is anything similar sellers are less likely to accept that offer over someone with conventional financing and 20% down.

 

[sneakaprince]

I'm still tripping about the down payment. Is the BoA NoDown No Closing a FHA loan? If not, what does it matter to the seller what a person puts down?

Maybe it's just me but it as a seller it would feel too easy for either the bank or the person to walk away from the deal.

In theory you would have multiple offers. It's not like a seller isn't going to accept what ever deal comes their way if there are no competing offers but if it's a hot market (like the last 2 years or so) I doubt the sellers go with the no money down offer.

 

[keko jones]

I highly doubt a no money down program is going to have less strings than a VA Loan or FHA loan.

Some of those VA loans are actually no money down, but the VA uses their own appraises who like you said "protect" the investment by making sure you aren't paying more than the house is actually worth. The downside of that is to absolutely ensure you the buyer isn't paying too much they will use the lowest comps possible and they have their own appraisers.

If this Bank of America program is anything similar sellers are less likely to accept that offer over someone with conventional financing and 20% down.

Maybe it's just me but it as a seller it would feel too easy for either the bank or the person to walk away from the deal.

In theory you would have multiple offers. It's not like a seller isn't going to accept what ever deal comes their way if there are no competing offers but if it's a hot market (like the last 2 years or so) I doubt the sellers go with the no money down offer.

None of this answer the original question.

The original statement was

Funniest thing I've read today.

with the exception of Detroit, good luck getting an offer accepted with $0 DP

Again, why would an offer from someone with no downpayment be rejected?

FHA, VA, etc was not mentioned.
Contingencies were not mentined.
Just no money down and being funny.

 

[getback]

Next project is replacing the old insulation in my basement with batt insulation. Seems pretty straightforward. Anyone have experience doing it?

 

[HankHill]

sneakaprince keko jones stork

I think folks are confusing a downpayment with an earnest money deposit.

"No downpayment" shouldn't have anything to do with the seller; it's between the buyer and their lender. The seller likely wouldn't even know that unless the buyer informs them (directly or you're in some lending program that discloses it).

The EMD usually comes when you submit an offer or ratify the contract. A lender/program can't force a seller to accept offers without an EMD so not sure what the concern is.

 

[sneakaprince]

sneakaprince keko jones stork

I think folks are confusing a downpayment with an earnest money deposit.

"No downpayment" shouldn't have anything to do with the seller; it's between the buyer and their lender. The seller likely wouldn't even know that unless the buyer informs them (directly or you're in some lending program that discloses it).

The EMD usually comes when you submit an offer or ratify the contract. A lender/program can't force a seller to accept offers without an EMD so not sure what the concern is.

When you submit an offer letter there is a line that denotes how the purchase will be made.

Talk to any seasoned realtor they will tell you they know who has VA/ FHA offers etc.

I'm sure when offering to purchase a buyer's pre-approval letter would also outline that the buyer is using a no money down financing option. That could be the difference maker for getting your offer accepted or not. Especially if you have a competing offers for an equal or even slightly lessor amount.

At the end of the day some of the power is with the agent. Some agents aren't even presenting offers with extraneous contingenious (typical VA/ FHA loans, likely this one as well), especially when we have competing offers with less strings or headaches. Getting the offer is only half the battle. That **** still has to go to close and it's always 50/50.


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.

My old student had a VA loan and dead *** couldn't get an accepted offer. I hooked him up with my realtor and loan officer. They explained the hardships of getting an accepted offer with a VA loan. We ended up getting my homie a conventional 5% down payment and he had an accepted offer within 30 days. Call me crazy but I truly speak from experience.

 

[sneakaprince]

In regards to earnest money what would you put down if you have no down payment? I mean I guess they could still do the earnest money as a show of good faith but as a seller I'd much rather have something vs nothing.

Earnest money is another one of those checklist things that you can use to gauge how serious a buying party is when it comes to getting the deal done.

Yeah it might only be 1k but at least they have some skin in the game.

Idk if you guys have had deals fall through, I have and trust me it's ******* annoying.

My other good friend had a 700k sale fall through after all the **** in Afghanistan went down last year. His buyers had all their money in the bank of Afghanistan and literally overnight that **** was gone.

They had their house off the market for damn near 60 days and had moved out. Mind you they paid 2 mortgages while selling the home.

My homie felt bad for the buyer but he still kept half the earnest money because at the end of the day he ate a loss too.

He ended up selling the house another 60 days later but that was 1/3 of the year spent paying 2 mortgages which sucks.

 

[datznasty]

1.5% was the standard in Oklahoma last time I bought and tried to sell. Likely much higher now. And i bought my house new construction no money down, out of my own pocket anyways theres a state program that gives you 3.5% for a first time buyer

 

[sneakaprince]

1.5% was the standard in Oklahoma last time I bought and tried to sell. Likely much higher now. And i bought my house new construction no money down, out of my own pocket anyways theres a state program that gives you 3.5% for a first time buyer

As a seller I still try to cast as wide a net as possible when selling a single fam home. That usually means I'm doing everything I can do to ensure it passes a FHA inspection before it's listed on the market.

Investment property is kinda different (at least where I've sold, and purchased to be fair).

 

[keko jones]

When you submit an offer letter there is a line that outlines how the purchase will be made.

Talk to any seasoned realtor they will tell you they know who has VA/ FHA offers etc.

I'm sure when offering to purchase a buyer's pre-approval letter would also outline that that buyer is using a no money down financing option. That could be the difference maker for getting your offer accepted or not. Especially if you have a competing offers for an equal or even slightly lessor amount.

At the end of the day some of the power is with the agent. Some agents aren't even presenting offers with extraneous contingenious (typical VA/ FHA loans, likely this one as well), especially when we have competing offers with less strings or headaches. Getting the offer is only half the battle. That **** still has to go to close and it's always 50/50.


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.

My old student had a VA loan and dead *** couldn't get an accepted offer. I hooked him up with my realtor and loan officer. They explained the hardships of getting an accepted offer with a VA loan. We ended up getting my homie a conventional 5% down payment and he had an accepted offer within 30 days. Call me crazy but I truly speak from experience.

So what you're saying a seller is more incline to accept an offer where a person has put money down vices no money down even if it's less money?

We aren't talking about type of loans, because that's not what anyone originally mentioned.

 

[HankHill]

When you submit an offer letter there is a line that denotes how the purchase will be made.

Talk to any seasoned realtor they will tell you they know who has VA/ FHA offers etc.

I'm sure when offering to purchase a buyer's pre-approval letter would also outline that the buyer is using a no money down financing option. That could be the difference maker for getting your offer accepted or not. Especially if you have a competing offers for an equal or even slightly lessor amount.

That depends on the lender. I can look at old pre-approval letters from a national bank that shows it and one for a local lender that doesn't. In any case, it's as relevant to a seller as the amount of interest the buyer is paying. Neither impact how much you want to sell the house.

At the end of the day some of the power is with the agent. Some agents aren't even presenting offers with extraneous contingenious (typical VA/ FHA loans, likely this one as well), especially when we have competing offers with less strings or headaches. Getting the offer is only half the battle. That **** still has to go to close and it's always 50/50.


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.

My old student had a VA loan and dead *** couldn't get an accepted offer. I hooked him up with my realtor and loan officer. They explained the hardships of getting an accepted offer with a VA loan. We ended up getting my homie a conventional 5% down payment and he had an accepted offer within 30 days. Call me crazy but I truly speak from experience.

Your hangups have nothing to do with "no downpayment" though. You seem to just not like FHA and similar programs because as a seller you'd have to meet a lot more standards in order to close. These can be contingencies that both groups would decide on anyway with conventional loans. A buyer can just as easily switch lenders after ratifying their contract if they're offered a lower rate or closing cost/downpayment support. Would you back out of the contract then?

 

[HankHill]

So what you're saying a seller is more incline to accept an offer where a person has put money down vices no money down even if it's less money?

We aren't talking about type of loans, because that's not what anyone originally mentioned.

Thats like me saying I accept offers based on what the mortgage rate is. Why would that matter?

 

[thenewjs23]

Too easy to walk away with no money.

A lot of those programs also come with crazy strings.

My vet brothers please forgive me when I say this, trust me I appreciate your service.

When the market was crazy hot my realtor kept it real with me and said she wouldn't even entertain offers with VA loans. VA loans and FHA loans have a reputation for ****ty appraising that typically undervalues a house. They are also more stringent on condition of the home being purchased.

As a seller if I have two offers of equal value (maybe even one for slightly less) attached to a VA Loan VS a conventional, I'd take the conventional everytime. Much more likely to make it all the way to the finish line, plus buyer has skin in the game via earnest money etc.

At the end of the day a deal can always fall apart but it's even easier to walk away when a person has $0 investment in it going through.

While the VA Loan doesn't require earnest money, the seller can still request it. I used the VA loan and my seller required earnest money. During covid inspectors were doing drive by inspections, some would walk up to the door and look through the windows.

My Broker was so good with the paper work, we closed 15 days early.

 

[moderndarwin]

Some wildin going on here.

I just bought a home in California. It definitely says what your down payment is and even about the rate. I put down a lot of earnest money because I was doing a low down payment. There’s contingencies based on interest rate.

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.

 

[sneakaprince]

Some wildin going on here.

I just bought a home in California. It definitely says what your down payment is and even about the rate. I put down a lot of earnest money because I was doing a low down payment. There’s contingencies based on interest rate.

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.

Fam I'm so lost at why this isn't clear to more people.

 

[keko jones]

In regards to earnest money what would you put down if you have no down payment? I mean I guess they could still do the earnest money as a show of good faith but as a seller I'd much rather have something vs nothing.

Earnest money is another one of those checklist things that you can use to gauge how serious a buying party is when it comes to getting the deal done.

Yeah it might only be 1k but at least they have some skin in the game.

Idk if you guys have had deals fall through, I have and trust me it's ****ing annoying.

My other good friend had a 700k sale fall through after all the **** in Afghanistan went down last year. His buyers had all their money in the bank of Afghanistan and literally overnight that **** was gone.

They had their house off the market for damn near 60 days and had moved out. Mind you they paid 2 mortgages while selling the home.

My homie felt bad for the buyer but he still kept half the earnest money because at the end of the day he ate a loss too.

He ended up selling the house another 60 days later but that was 1/3 of the year spent paying 2 mortgages which sucks.

Im not sure what's going on bro.

A seller can always ask for escrow in good faith that the buyer is not a tire kicker. Never seen a seller reject someone for what % of money they putting down.

When it comes to FHA and VA loans, I get a sellers hesitation as they come with a lot of restricting and appraisal stipulations, but it has nothing to do with downpayment.

I mean There are a bunch of conventional loan promotions, some even as littler as 1.5%. I personally don't see a seller pre pandemic and even now rejecting an offer because hey you didn't put enough money down.

Lastly, I and I know a bunch of people that have purchase homes with zero down and use the money down to remodel or furnish their homes.

I really want to know how things are now though.

 

[keko jones]

Fam I'm so lost at why this isn't clear to more people.

Because I have never seen ir heard and I have family in real estate and I have purchase and sold homes of a seller rejecting an offer because the buyer didnt put any money down. Like wtf???? **** makes no sense, I'm going (seller) is going to get the agree upon priced.

 

[lazyj10]

When we sold our home - which was what he had to do before buying the house we wanted - we looked over all offers received. The couple of offers with the highest down payment, and above ask, we're further looked at in detail by us including proof of funds. One low down payment was above ask as well (and within a couple thousand of the aforementioned others) but based on our timeline and needs, we assessed that as riskier. Reason being is, if we didn't appraise then the buffer on the low down payment is gone and prolongs the process. The folks putting down 25% would be fine because they had enough capital to cover any difference if need be (their down payment as a %, for example, cold be 22% instead).

 

[sneakaprince]

A buyer can just as easily switch lenders after ratifying their contract if they're offered a lower rate or closing cost/downpayment support. Would you back out of the contract then?

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 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.

 

[sneakaprince]

Im not sure what's going on bro.

A seller can always ask for escrow in good faith that the buyer is not a tire kicker. Never seen a seller reject someone for what % of money they putting down.

When it comes to FHA and VA loans, I get a sellers hesitation as they come with a lot of restricting and appraisal stipulations, but it has nothing to do with downpayment.

I mean There are a bunch of conventional loan promotions, some even as littler as 1.5%. I personally don't see a seller pre pandemic and even now rejecting an offer because hey you didn't put enough money down.

Lastly, I and I know a bunch of people that have purchase homes with zero down and use the money down to remodel or furnish their homes.

I really want to know how things are now though.

My brother I hope all is well on your end.

As moderndarwin just restated people are always going to feel more comfortable when the buying party has some skin in the game too.

You have to consider the people this program is targeting. Once again its usually going to be first time home owners, lower to middle class American's etc. Most of the time these are people that do not have a ton of disposable income. The old stat was something like most American's don't have more than 2K in emergency funds. I don't know what the stats are now and I have to assume its more with inflation.

However, I talk to a lot of people, I know plenty of 30+ year olds with no more than 10K in available funds. That means if financing falls through or the house under appraises on the agreed upon sale price someone is going to have to take a loss or make some serious changes. If a buyer only has 10K and they have no skin in the game (no earnest money, and no preparation in terms of savings for a down payment) the buyer will just walk from the deal. Truthfully no harm no foul. I'll be honest 99% of sellers won't bother taking you to court so the seller will just hold that L.

As a seller no one is looking to be in that situation. In fact a seasoned realtor with multiple offers on the table will use that as leverage to go with another more promising situation that is likely to make it all the way to closing at the agreed upon buy price.

Once again this is all based on current market conditions and the assumption that there are multiple offers on the table.

In a buyers market you can throw this out the window. Seller would be just sitting on the crib anyway so they might take the chance. In today's market that's less likely.