Misfitmorgan's Journal - That Summer Dust

[CntryBoy777]

I would put in the offer before the price drop, personally. It gives you the leg-up and places ya in a bargaining position. Since there have been previous drops, the seller could feel dejected about it and if ya have a reason to sell, then the old saying gets some play....a bird in the hand is worth 2 in the bush....I did that many yrs ago on 30acres. The lady was asking close to $1000/acre, I offered $500/acre...she laughed at the offer, and I told her that prime tillable farm land was going for $600-650/acre and hers was all hills and woods. It was about a yr later that they came back to me and asked if I was still interested....I was, but life had placed me going a different direction. So, ya never know...it could be best to beat the rush and give them "Food for Thought". Ya never know the reason for trying to sell and if they need the $$ ya could be in a really good position.

 

[misfitmorgan]

I can't believe the prices there. I never realized how expensive it is to live in the northeast until I started talking to people in different parts of the country.

I pay $3,000/year for a mobile home and 5 acres, most of which is swampy or woods. My MIL has an old farmhouse, barn, and an outbuilding on 5-6 acres of field and pays nearly $10,000!

Depressing!

I know i was shocked when i found out how expensive other places are to live lol. The farm would have the ag exemption which is better then the homestead exemption so we get a break on that. Homestead exemption would be approx $1,800/year but even that compared to other places is very cheap. Part of it is the county we are in, we are considered a poor county...even though the next county over(which I work in) which we are only 7 minutes from is considered a fairly well off county.

I would put in the offer before the price drop, personally. It gives you the leg-up and places ya in a bargaining position. Since there have been previous drops, the seller could feel dejected about it and if ya have a reason to sell, then the old saying gets some play....a bird in the hand is worth 2 in the bush....I did that many yrs ago on 30acres. The lady was asking close to $1000/acre, I offered $500/acre...she laughed at the offer, and I told her that prime tillable farm land was going for $600-650/acre and hers was all hills and woods. It was about a yr later that they came back to me and asked if I was still interested....I was, but life had placed me going a different direction. So, ya never know...it could be best to beat the rush and give them "Food for Thought". Ya never know the reason for trying to sell and if they need the $$ ya could be in a really good position.

It is quite possible but we wont be ready in 2 months based on the schedule I have made, we need at least 4 months. Then we can go into a new property debt free, which gives us a better debt to income ratio and allows us liquid assets to purchase needed fence, equipment, trailers, etc. I am also kind of secretly hoping my raise will be thru by then.
Atm we are spending 59% of our income a month on bills, car payment, rent, gas......not including food. If we went right into the loan on this property we want our payment would be close to the same as our rent payments so we would be stuck in the same boat except instead of it taking a year to get better it would be more like 5 years. So i've figured out how to accelerate a few payments meaning that in 4 months our debt will be approximately 16% of our income not including food costs. Or 30% including the estimated mortgage payment on that place if we paid 125k.
I'm willing to have things super tight for 4 months instead of a few years and possibly loose that place. After all that gives us 20% of our income to go towards DTI ratio for the bank so we could possibly get an even better(for us) deal/place without living like we are dirt poor or take out a bit extra to be able to put up fencing or get a tractor if we need too.

 

[Bruce]

What happens if you offer $120K instead of $125K and they take it? Or offer $115K and settle on $120K? Would that take care of the "extra" 4 months from a financial perspective?

As @CntryBoy777 said, you never know their motivations. Maybe the current owners inherited it and are hoping for a windfall, reality might strike and deflate that balloon. Heck, worth a try, the house next to my prior house sold twice to people with more money and desire than thoughtful consideration of actual value. 13 years ago to a doctor and lawyer who wanted a "move in" house. They paid probably 50% more (the same day the "for sale by owner" sign went up) than it would have gone for through a realtor. Houses in that neighborhood are 99% sold by owner, location, location. They sold just over a year ago to the people who had been renting it (for $2,500/month!) for the prior 18 months. They paid at least $100K over what it is worth, gutted it, ripped the second floor off and built something that would look in place on a beach in Miami, not in Vermont. They must have $750K in a house worth half that. The wife (a doctor) must have inherited some money or something. The husband is a school counselor and isn't even listed on the deed.

Anyway, if they were cleaning up for an open house but get no interest or at least no offers and no one is coming forward outside the open house they have to rethink their price. I know it just went down < a month ago but (IIRC) they don't live nearby and either have to pay someone to keep it in "showable condition" or come up and do it themselves. That adds up after a while and they have been "waiting" for their rich prince since last fall.

 

[CntryBoy777]

Depending on the differece between the amount offered and the amount of appraisal, you can always come out way ahead at closing. If ya want or need a cushion, then finance more than offering to cover closing costs and other incidentals.....fencing, furniture, etc. It would be unusual for the interest rate to be more on a mortgage than a personal loan, then ya can amortize the mortgage and pay it off as fast as you can. Usually, a 30yr loan can be paid off within 10yrs without it being too much of a burden....it gets more difficult as you get on the backside of it, because more out of each note goes towards the principle. If ya make the offer and they reject ya, ya haven't lost anything and if they come back in the future ya offer less. This will force their "Hand" as to sell or not, and make your position of negotiation much stronger. If ya had everything lined up and paperwork filed today, it wouldn't close til about 5-6mnths anyway. I've always got a check issued to me at closing, and had the closing costs covered with the proceeds of the loan, or had the seller paying them.

 

[farmerjan]

If you wait for the open house you might very well be behind the eight ball. Make a low ball offer. They can refuse, they can counter, they can accept. It gives you an "in" and the real estate agent will be more inclined to come back to you as an interested party. One thing you have going for you is the offer isn't contingent on you "selling your current home" as many offers are.
Any real estate agent that takes a financial statement will see that you are bery close to being debt free; ie. only a few more months to pay a car loan etc. Are you pre-approved for a certain size loan? That will get you in the game alot quicker here. You also should be working with a real estate agent of your own. If you were to buy a place listed by another agent, they will share the RE income. But you will have the safety of your agent looking out for yourself. Safer when you get into contracts.
Have you had a real estate agent looking for a place for you? There might be something out there that isn't as "saleable" that an agent might know of that would be perfect for what you want. Maybe needs some work but basically sound. Older people looking to move, going into retirement, so many other things that they don't want to sell on their own and don't want to put alot into to get sold. Something that may not be seen as a good selling point that would be ideal for you.
Get pre-approved for mortgage, then you can move quickly if you find something without waiting to get an approval....And keep paying down the debt as fast as you can.
You don't want to have alot of "cash" showing for improvements, as they will want a bigger downpayment.

 

[misfitmorgan]

What happens if you offer $120K instead of $125K and they take it? Or offer $115K and settle on $120K? Would that take care of the "extra" 4 months from a financial perspective?

As @CntryBoy777 said, you never know their motivations. Maybe the current owners inherited it and are hoping for a windfall, reality might strike and deflate that balloon. Heck, worth a try, the house next to my prior house sold twice to people with more money and desire than thoughtful consideration of actual value. 13 years ago to a doctor and lawyer who wanted a "move in" house. They paid probably 50% more (the same day the "for sale by owner" sign went up) than it would have gone for through a realtor. Houses in that neighborhood are 99% sold by owner, location, location. They sold just over a year ago to the people who had been renting it (for $2,500/month!) for the prior 18 months. They paid at least $100K over what it is worth, gutted it, ripped the second floor off and built something that would look in place on a beach in Miami, not in Vermont. They must have $750K in a house worth half that. The wife (a doctor) must have inherited some money or something. The husband is a school counselor and isn't even listed on the deed.

Anyway, if they were cleaning up for an open house but get no interest or at least no offers and no one is coming forward outside the open house they have to rethink their price. I know it just went down < a month ago but (IIRC) they don't live nearby and either have to pay someone to keep it in "showable condition" or come up and do it themselves. That adds up after a while and they have been "waiting" for their rich prince since last fall.

If we could get it for 115k maybe, the other problem would be down payment. If we do it before 4 months we would not have the 20% down payment the bank will want. ATM we only have 10% IF we got it for 115k and would require the closing costs to be rolled into the loan which would make our payments more then we would like them to be. It makes more sense to wait even if we lose that place.

DH wants to go offer them 100k and see if they take it, they do require a pre-approval letter on all offers the real estate agent told me as well as earnest money.

We do want the place pretty badly but don't want to jump in to quickly and lose it because of our hast. It would also be nice to get DHs credit up a bit first since he has a credit card his ex was suppose to have paid off and he just never checked...apparently it still isnt paid off and now he has 24 late payments on his credit.

Depending on the differece between the amount offered and the amount of appraisal, you can always come out way ahead at closing. If ya want or need a cushion, then finance more than offering to cover closing costs and other incidentals.....fencing, furniture, etc. It would be unusual for the interest rate to be more on a mortgage than a personal loan, then ya can amortize the mortgage and pay it off as fast as you can. Usually, a 30yr loan can be paid off within 10yrs without it being too much of a burden....it gets more difficult as you get on the backside of it, because more out of each note goes towards the principle. If ya make the offer and they reject ya, ya haven't lost anything and if they come back in the future ya offer less. This will force their "Hand" as to sell or not, and make your position of negotiation much stronger. If ya had everything lined up and paperwork filed today, it wouldn't close til about 5-6mnths anyway. I've always got a check issued to me at closing, and had the closing costs covered with the proceeds of the loan, or had the seller paying them.

I think it depends on who is doing the appraisal. Atm the assessed value is $74,200 so x2 is $148,400 so if they go by that i wouldn't come out any more ahead lol. We could have the seller pay the closing costs if they would agree to it. Average closing time here is 30-60 days depending on what finance place your going thru. The second problem is i just got a loan not to long ago and i dont think the bank is gonna like that and i dont want another hard inquiry on my credit for no purpose.

Really i greatly appreciate all the help and ideas but for now atm it is not the right time for us to try to buy this place. If the place is still there in a few months it is ment to be ours perhaps...if not, we will find another option.

 

[NH homesteader]

Good luck! And remember there are always a million other people selling houses all the time. So if this place goes there's always another!

 

[misfitmorgan]

The goat kids left on Sunday at noon. The two moms were tight and hard only 7hrs later so i milked them and got approx a quart all together. Then yesterday i had to go someplace with my mom so they didnt get milked yesterday that i know of so i hope they are ok...i know the meat goat will be fine she generally dries herself off no problem but the dairy could be a problem.

Lamb leaves in May when he is 8 weeks old.

We pulled the boar off the gilts/sows, if we dont see them go back into heat in the next 20 days he is going home. If they got bred the approx delivery date should be July 7th-13th and we would be hoping for 40+ piglets. Then sows will be held over to be bred for late october for 4-h piglets.

 

[Baymule]

I had to go looking for it, but I found the post I was looking for! I had read a post on my favorite pig site about how to tell if a gilt or sow is pregnant, here it is!

http://sugarmtnfarm.com/2011/08/28/pregnancy-indicator/

 

[Bruce]

It would also be nice to get DHs credit up a bit first since he has a credit card his ex was suppose to have paid off and he just never checked...apparently it still isn't paid off and now he has 24 late payments on his credit.

OUCH! That will screw your credit rating big time. Don't know if there is a way to take it off the report quickly even if it was paid in full today. I ASSUME they keep a "no payments for 2 years" on your report a LONG time. You would want to explain that to any REA you talk to. Oh, and if you are going to "engage" an agent, get a broker, they have to work for YOU, REAs work for the seller even if you engaged them. At least that is how I think it works.