Flippin’ Pronstar

[TheDan]

Why do people offer over asking?

Yeah that's retarded. If I were the lender that behavior would make me nervous.

 

[pronstar]

Yeah that's retarded. If I were the lender that behavior would make me nervous.

Keep in mind that an appraisal simply determines what the lender will allow you to borrow.

The actual value of a home is determined by the buyer and seller. It could be more or less than the appraisal.


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[deemus]

Definition of fair market value.

Probable price at which a willing buyer will buy from a willing seller when (1) both are unrelated, (2) know the relevant facts, (3) neither is under any compulsion to buy or sell.

 

[TheDan]

Keep in mind that an appraisal simply determines what the lender will allow you to borrow.

The actual value of a home is determined by the buyer and seller. It could be more or less than the appraisal.

Sure, but offering over an asking price? Sounds like something people who are one missing pay check from defaulting on all their bills do.

 

[digger]

People coming in from parts of the country where home prices average much higher than Tx market having sold a home are flush with cash and glad to push that offer.

 

[SQLGeek]

People coming in from parts of the country where home prices average much higher than Tx market having sold a home are flush with cash and glad to push that offer.

Yep. Cash buyers that see a "deal" compared to where they were from don't care.

 

[FireInTheWire]

I have a couple of friends who were laid off. I'm not feeling super confident in my own job right now. That's best discussed in person over beers though.

Beer??? did somebody say beer?

 

[toddnjoyce]

Yep. Cash buyers that see a "deal" compared to where they were from don't care.

Yep. The idiotthat relocated here from Minnesota and lost his mind when the neighbors were burning the brush piles last month are a case in point.

Same floor plan as ours, 1 year older; they offered 18% over what our house sold for. Granted, they’ve got a slightly larger lot and a basic rectangular pool, and without some of the upgrades we did that can’t be done later, but it didn’t make the appraisal and that didn’t matter one bit because they were only putting a mortgage on half the cost; the rest was cash.

 

[SQLGeek]

And of course because of that they screw you when it comes to property assessment. Real estate going crazy is going to kick everyone in the teeth pretty soon.

 

[pronstar]

As far as offers over asking...note that there’s a selling tactic of purposely coming to market with a low price. The reasoning is, it’ll attract buyers and spark a bidding war.

My mentor is doing this with a house he’s renovated in Plano.

Buyers will know the home is underpriced, so it’s more like an blind-auction sale.


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[TheDan]

Housing is weird. I think people see it as an investment, but unless you're doing what pronstar is, it's actually a liability.

Make hay, man... I think HGTV has made people lose their minds.

 

[pronstar]

Housing is weird. I think people see it as an investment, but unless you're doing what pronstar is, it's actually a liability.

Make hay, man... I think HGTV has made people lose their minds.

The house folks actually live in is absolutely an asset...for the bank!
It's a liability for everyone else.

 

[ZX9RCAM]

Last house I lived in, I sold for double what I paid for it.

 

[pronstar]

Last house I lived in, I sold for double what I paid for it.

If you tally-up the interest payments you made, did you truly double-up?


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[ZX9RCAM]

If you tally-up the interest payments you made, did you truly double-up?


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No.
Lived in it for 10-11 years.
I still feel good about it.
Sold it about 4 months after I bought the new one.

 

[F350-6]

If you tally-up the interest payments you made, did you truly double-up?

Is that the only reason you think it's a liability? Or are there others? I'm just trying to understand your thinking.

 

[pronstar]

Is that the only reason you think it's a liability? Or are there others? I'm just trying to understand your thinking.

An asset puts money in your pocket...it makes you money while you own it.

A liability takes money out of your pocket...it costs you money while you own it.


In basic accounting, anything in an asset column is balanced by a liability on someone else’s column. It can’t be an asset (or a liability) to both parties.
(Mickey this is the extent of my accounting knowledge LOL)

A house that’s financed is a bank asset. They’re making interest on it.

A house that’s financed is your liability because it takes money out of your pocket the entire time you own it. You pay:
Interest
Maintenance and repairs
Utilities
Principle payments
Insurance

A $300k house, financed at 30 years and 3% interest, costs you $155k in interest.

That interest is the banks profit.



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[ZX9RCAM]

So, even though I paid cash for the house, it's a liability, because there are maintenance and utility costs?

 

[Sasquatch]

So, even though I paid cash for the house, it's a liability, because there are maintenance and utility costs?

That should be an asset - its appreciating (usually) while you own it - yes you're paying upkeep and taxes, but you're not continuing to pay a mortgage and interest

 

[ZX9RCAM]

That should be an asset - its appreciating (usually) while you own it - yes you're paying upkeep and taxes, but you're not continuing to pay a mortgage and interest

That's pretty much what I thought, but
I was going off what pronstar said.