FlipperToolbox

I had been looking for an investment opportunity when my elderly neighbor told me she was going to sell her vacation property. She had already contacted a realtor and was expecting to list it for $175k. Being an entrepreneur, I offered her a private sale for $160k, which would have saved her from paying out realtor commissions. But when I talked to her again a few days later, she said the realtor had bought the condo.

A few weeks later, I looked up the sale price and was shocked to find out that the realtor paid only $110k for the condo, which is at least $50k below the market value. My neighbor has Alzheimer’s, so it’s very likely she was scammed.

I took the matter seriously and questioned whether the realtor’s actions were unethical or even illegal. After doing some research, I realized that it was both unethical and illegal. I decided to file a complaint with the local realtor board and contacted any family members to let them know what had happened.

The issue could be more complex than simply being scammed, however. It is possible that due to an error, the house was recorded at the loan balance, or that the neighbor and the realtor agreed on a price but some alarming problem was discovered through inspections (sunken foundation, deferred maintenance, etc).

In any case, it is worth reporting the incident to the board. To make sure you have accurate information, it is best to get it from the county directly, as Zillow is incorrect from time to time.

I recently became aware of a potentially unethical and illegal real estate transaction. My elderly neighbor, who has Alzheimer’s, was planning to list her vacation property for $175k, but the realtor bought it for only $110k – $50k below market value. I filed a complaint with the local realtor board and contacted any family members to let them know what had happened. It is possible that due to an error, the house was recorded at the loan balance, or that the neighbor and the realtor agreed on a price but some alarming problem was discovered through inspections. In any case, it is worth reporting the incident to the board. To make sure you have accurate information, it is best to get it from the county directly, as Zillow is incorrect from time to time.

I’m in a difficult situation. My very close friend is a real estate agent and I had to make a decision to list and show my property quickly but my friend was due to give birth the same week. I decided not to hire them for the job as I knew they wouldn’t have been able to handle the responsibility. This has had a huge impact on our friendship and I’m feeling a lot of guilt as a result.

My friend is currently building a $3M home and they have admitted to me that they don’t need the money as their partner is the main provider. Even though my friend has only been a real estate agent for two years, I decided to hire the #1 realtor in my city, who I’ve known since high school. The Realtor I hired has over 20 years of experience and a large team, so even if I had gone with my friend, they wouldn’t have been able to refer me and get a referral fee.

The urgency to list, show, and sell quickly was due to the fact that my tenant had moved out with short notice. I live in another state and I didn’t want the property sitting vacant and burning cash. I had already been searching for a house for months and needed the money from the sale of my old property to help me buy a new one.

I know in my heart that I made the right decision for my family and finances, but the cost of that decision has been the loss of my close friend and that is something that I’m struggling with. I’m trying to figure out how to move forward and make things right again but I’m not sure what the best course of action is. Any thoughts or suggestions would be greatly appreciated.

I made a major mistake and regret leaving Seattle for South Dakota. I miss the mild climate, the beauty of the area, the entertaining options, and the overall atmosphere of life there. I’ve been in South Dakota for almost a year now, and still find myself wishing I was back in my old Seattle home, paying the mortgage and living there.

I’m not the only one who made this mistake this year. Many of my clients who left Seattle during the pandemic are wanting to return now. It’s a reminder that life is too short and our environment has a significant impact on us.

My story is similar to many others. My family and I moved from Southern California to Northern Virginia, because it drastically reduced our expenses and this has become our home. However, I still feel the beauty of SoCal and I can’t help but miss it every time I see it on television or in movies.

It’s easy to get caught up in the moment and make a quick decision on something as big as relocation. It’s important to consider all angles, as the everyday impact on your life can be huge. Everyone’s situation is different, so only you can make the best decision for yourself. However, I would suggest taking the time to really think through the options and make sure it’s the right path.

I’m still trying to process my feelings and figure out how to move forward. It’s hard to look back and accept that I made a mistake. But, I’m learning to accept it and use it as a lesson to make more informed decisions in the future. We can’t change what happened, but we can use these experiences to grow and make better choices.

I know I’m not alone in this situation, and I wish all of us the best of luck in finding the place that is right for us. Life is too short to stay in a place that doesn’t bring us joy.

I’m about to sell my small house and it’s a completely new experience for me. I’m not sure what my options are and what I should avoid. The thing is, my neighbor has asked me on multiple occasions to let him know if I’m selling because he wants to buy the house for his daughter. I really appreciate his help and kindness, but this isn’t something that I’m using to affect my decision, it’s just a financial matter.

My options are to either skip the realtor, look up comps myself, and offer the house to my neighbor at the price I think it would sell for; hire a real estate attorney/lender to do the sale; talk to a few realtors and don’t sign any listing agreements; or ignore my neighbor and just sell the house.

The truth is, I don’t know what to do. Going through a realtor would be the safest option, but discussing my neighbor’s desire to purchase the house with them would be a good idea too. If I decide to go through a realtor, I should consider taking the highest number they suggest in their CMA and let my neighbor know my intention is to list. If I skip the realtor, I could save money, which I could then share with my neighbor.

I realize this is a tough decision, but I just want to make sure I explore all of my options first before I make my final decision. Whatever I decide to do, I want to make sure I get a fair price for my house.

As the housing market heated up in recent years, many of my in-laws were eager to move back to the area and put a bid in on a house. Unfortunately, the inspection revealed that the house was priced way too high and would need around $150,000 worth of upgrades to make it safe. This was a “flipper house” that was probably passed over due to inspection issues. It’s sad to think that even the worst houses are too expensive these days.

Apparently, it was common knowledge in the real estate community that this was the time to “dump” the bad houses without inspections being done. Who knows how many people ended up in this situation? The majority of people are more concerned with securing their 2.5% loan than making sure the house is safe.

On the bright side, this makes rehabbing old homes an attractive option for people. My in-laws were willing to waive inspections and overpaid by about 5% on their 120 year old house. We were aware that there could be serious water infiltration and foundation issues, but the location and setting were perfect and we didn’t want to lose it after looking for two years. A year and a half later, the issues have mostly been fixed, and we are still here.

I’m reading through some posts from potential homebuyers and it’s understandable why they feel stressed. It would take up 50-60% of take-home pay to cover mortgage and other housing expenses, and that’s a lot to commit to. It’s not unrealistic to expect higher incomes, parents to help out with new babies, and a commitment to being frugal and not traveling. But I’m having a hard time understanding why people would take so much risk with the economy and interest rates so high.

I get that there was a bidding war last year that allowed people to lock in extremely low rates, but now those rates have almost doubled. People are stretching their budget to the max to accommodate that, just because of the low inventory. But this has been going on for a few years now, it’s not something new. The right house in the right time will come eventually.

I see a lot of people saying that it’s worth it to take the risk and buy the house, otherwise you’ll be priced out while saving, and that the job market is strong. I also hear people saying that home assets are a great thing to hold onto during hyperinflation, and that the government will have forbearance programs to help homeowners in the event of unemployment. The only situation that makes sense to me is when renting is equal to or twice the cost of buying.

It’s important to remember that you don’t want to buy a house that you can’t afford. Make sure you look at your budget and make the best decision for your current financial situation.

When considering a mortgage, one of the most important factors to understand is the amortization schedule. This is the schedule of principal and interest payments over the life of the loan. But why is the amortization schedule the way it is? Why can’t banks split it proportionally so that all 360 payments (in the case of a regular mortgage) have the same principal and interest payment?

The answer lies in the way interest is calculated. Interest is a percentage of the remaining balance on the loan. In simple terms, this means that you pay more interest when the balance of the loan is higher, and less interest when the balance is lower.

For example, say you borrow $240,000 at 10% interest. The first month’s interest will be about $2,000 ($240,000 * .10/12). So if your principal and interest payment is $2,500, you’ll pay $500 principal that month. Some years later, you’ll owe $120,000. Then you’ll be paying about $1,000/month in interest and $1,500 of that same $2,500 payment will go towards the principal every month. Years later you’ll owe $12,000 and only $100/month will be interest.

So why can’t banks split principal and interest payments proportionally? The answer is simple: because the math won’t add up. If you wanted to make the same payment over 30 years, the bank would have to take the interest rate and work out what the monthly payment would need to be so each of the 360 monthly payments is the same amount while accounting for the interest owed on the remaining principle.

Of course, if you wanted to, you could always change the percentage split of principal and interest payments by paying extra. For example, if you fully paid off the mortgage in the first payment, it would be almost all principal.

At the end of the day, it all comes down to why you wanted the loan in the first place. If you wanted to borrow money for 30 years, the amortization schedule is the best way to ensure that each monthly payment is the same.

As someone who rents a four-bedroom single family home in a high cost of living area, I get why renting is becoming a trend among high-income earners. Renting offers an easy way to live in an expensive city while saving up for the future. Plus, it’s often cheaper to rent than to buy in a HCOL area.

Recent news from the Wall Street Journal confirms this trend, with over three million high-income renters across the US. It’s not just about the cost, though. Renting also offers convenience and flexibility.

For high-income earners, renting is just another way of paying for help so they can spend their time doing what they want. The landlord/tenant dynamic is different when the landlord is essentially treated as another servant, but they’re willing to pay for it so it works.

Some people might be quick to judge and see renting as throwing away money since you don’t actually own anything. But that’s not the case. Renting is a perfectly valid option, especially in dense HCOL urban areas where there is no traditional American dream. Here, it’s just about getting a slice of a city and living the life you want.

Renting might not be the same as owning, but it is a viable option for a lot of people, especially in HCOL urban areas. You don’t have to take on a burdensome mortgage, and you don’t have to sacrifice the quality of life you want.

Renting is a smart way to save and live the life you want in a HCOL area. It can be an easy, convenient and flexible way to enjoy your city without taking on a mortgage.Read more“Are You Renting a High-Cost Home for Less Than a Mortgage? Saving and Saving Until You’re Flush With Cash?”

Buying a home for the first time has become an incredibly daunting and demoralizing experience for many. With houses being priced at 240k in 2021, and interest rates at 3.4%, many first time buyers thought they could afford a lot more for their money – only to have their offers consistently rejected.

The market has become so competitive that even bidding 30k over the asking price isn’t enough to secure a property. This morning, for example, I was outbid on a 1 bedroom, 1 bathroom, 1,200 sq ft house for 270k – a price that was 30k over the asking price.

The frustration of seeing the same amount of money not going as far, and the feeling of losing out on a home that could have been perfect for my family is incredibly demoralizing. What am I supposed to do?

Many people in my area are feeling this same sense of hopelessness, as there are barely any houses getting listed anymore. We experienced the same thing when we purchased our house in 2021, but the situation has only gotten worse since then.

We eventually ended up getting our house from a for-sale-by-owner listing on Facebook Marketplace, after losing 10+ bids to cash buyers. I would advise other first time home buyers to check the ‘other’ tab on Zillow too, as this might be the best way to secure a house in 2021.

It’s easy to become completely apathetic to the entire process of house hunting when it feels like such a miserable experience. Thankfully, there are still some ways to secure a home, but it’s important to be aware that you may have to make alot of offers and check all available options before you find success.

It’s no wonder that the number of homes for sale is dwindling. According to the National Association of Realtors, home sales surged 14.5% in February compared to January. This was the first monthly gain in 12 months and the highest increase since the start of the Covid-19 pandemic in July 2020.

Simultaneously, higher mortgage rates have been driving down home prices since last summer. For the first time in a record 131 months, prices were lower on a year-over-year comparison. However, the sales counts are based on closings, so the contracts were likely signed when mortgage rates had dramatically fallen at the end of December and throughout January.

This trend is especially evident in the Midwest. I have been keeping an eye on the number of homes for sale in my area for many years now. During normal times, the area usually had about 60-80 homes for sale without any contingencies (no accepted offers). But in the past few years, that number has been steadily decreasing. Last week there were only four homes available. And today, there is exactly one home for sale. Even then, the home is over $700K, while the average in this area is closer to $200K.

The same was true during the 2008 crash. While places like Phoenix and Las Vegas saw massive 25%-30% average transaction price declines, places like New York and Connecticut saw 3%-5% average transaction price declines. Even some parts of California, a notoriously expensive area, saw 5%-10% declines.

It’s clear that the real estate market is highly volatile and unpredictable. As more people look to purchase homes, the number of homes available will continue to drop. This means that buyers need to act fast to get the best deals.