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Heisman Winner [138497]
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House inspections are a racket, when "they" want them to be.
Jun 8, 2021, 9:13 AM
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Let's compare two scenarios.
1. I purchased my current house 7 years ago, and found an inspector on my own. He charged something like $300, and he came out to my house for over 3 hours, crawling all over, under, in, and around EVERYTHING. He's seen parts of my house that I haven't. He gave me an 18 page color report with pictures and details on every issue and potential issue he identified. Never seen anything so thorough.
2. Refinancing same house. USAA has to have an inspection for appraisal (bullshit because lots of refis don't require inspections/appraisals). $570, non-negotiable, set up by USAA. Guy shows up, takes a picture or two from the street, walks through side yard and opens gate to go into backyard. Takes a few more pics, DOESN'T close the gate which I discovered later. Knocks on the door as the bottom drops out, like DUMPING rain. Spends probably 6 minutes inside, pokes his head in a few bathrooms and bedrooms. And that's it. Gets in his car and leaves. $570.
Who is making out on this racket? The inspectors AND the mortgage companies? So completely unnecessary, especially in a bull housing market. Zillow's margin of error would be more reliable than what this guy provided. And don't get me wrong, he was a nice guy and all. At least 1 of the 6 minutes he spent inside was discussing Clemson football and the game against Georgia and recruiting.
This concludes my TED Talk.
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Oculus Spirit [75924]
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Hey, leave this to FBCoach.
Jun 8, 2021, 9:16 AM
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Also are you SURE this was an inspection and not appraisal?
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Oculus Spirit [86221]
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Right, this was just an appraisal right, sqft, quick peek in
Jun 8, 2021, 9:21 AM
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side don.
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Lot o points [163012]
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Appraisal is the scam.
Jun 8, 2021, 9:20 AM
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I mean just look at Zillow and you got a close number.
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All-In [31959]
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Inspection on a refi is BS....
Jun 8, 2021, 9:22 AM
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did you shop around to see if other's closing costs/rates were more attractive considering the $575 inspection charge?
To my knowledge, I don't think I've ever had to provide an inspection report to an appraiser. The inspection has always been an option for the buyer.
In fact, when I sold my last house in Augusta, I had a very general inspection done prior to listing the house to understand what I was up against. Basically a sellers inspection and I paid $300 for it, I think. The buyers ended up using it and not doing their own inspection to save money...which was a really stupid move on their part, but it never impacted anything on the appraisal.
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Oculus Spirit [78876]
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I assume you made USAA pay for both inspections?***
Jun 8, 2021, 9:24 AM
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Heisman Winner [106040]
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It's all about that sweet sweet equity, he could have added
Jun 8, 2021, 9:26 AM
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another $570 to the couple thousand already in there.
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Oculus Spirit [81478]
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I may be wrong, but I think some folks in here don't really
Jun 8, 2021, 9:34 AM
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understand what "equity" is.
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Heisman Winner [106040]
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Equity is a simple calculation: Eq = V - (M+F)
Jun 8, 2021, 9:42 AM
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Equity = Home Value - (Mortgage Balance + F)
F=Family Contribution & What you conned other people into paying.
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CU Medallion [64837]
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I use the same equation to figure out how much I have to
Jun 8, 2021, 12:17 PM
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spend on my wife's birthday present.
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Heisman Winner [138497]
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Oculus Spirit [98001]
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So are appraisals.
Jun 8, 2021, 9:26 AM
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We got a letter from OUR mortgage company offering a HELOC at an insanely low rate. We bit. Applied, qualified, and they sent someone to do an appraisal. Now back up. We've been in this house 8 years. The entire time we've lived here, a dozen houses or more have sold, and every single one sold for higher than their prior sale (from the builder).
FFWD again....appraisal comes back. To issue the loan they need a certain percentage of equity, which we had easily. Well, the house "appraised" $15K BELOW what we purchased it for, bringing our equity exactly $1K UNDER the required equity for the low rate. We asked for a copy. Square footage was 300 too low. They ran comparables on houses in the neighborhood behind our neighborhood, and included ZERO homes in our neighborhood, that were closer.
We told our mortgage company to go shovel it.
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Heisman Winner [120299]
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Sounds like you paid too much 8 yrs ago***
Jun 8, 2021, 9:41 AM
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Oculus Spirit [98001]
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Nope.
Jun 8, 2021, 10:57 AM
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We were the second to the last house the builder sold. Last house, after our house, sold for $10K more (same floor plan).
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Heisman Winner [106040]
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What is the $/SF versus what others are selling for?
Jun 8, 2021, 9:43 AM
[ in reply to So are appraisals. ] |
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If it is the same or close, maybe you just overpaid for your house.
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Oculus Spirit [98001]
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Builder wanted and got $89/sq ft.
Jun 8, 2021, 11:07 AM
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We were the second to the last house sold in the neighborhood by the builder as new construction. Last house, same floor plan, sold 6 months later for $95/sq ft. Homes are selling for $130/sq ft now. No house ever sold in our neighborhood (aside from the original sale with the builder) has ever sold for less than $100 sq ft. About 20 homes have sold since the original purchase from the builder. Until Mr. appraiser for the HELOC lender came along, and his appraisal was $84 sq foot, and ignored every other home sold in our neighborhood and ran comparables on the homes in the neighborhood behind ours. In the radius/timeframe used in their appraisal there were four homes sold in our neighborhood they did not include, that were in that radius, and closer than homes they used in the neighborhood behind us.
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Oculus Spirit [81478]
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$95/sq ft?? Does that include land??
Jun 8, 2021, 11:39 AM
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Holy crap...I having a hard time competing with others buying a house that is 5x-6x that. They get snapped up for cash before I can finish writing an offer.
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Oculus Spirit [98001]
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You should live in Lexington and not Mt. Pheasant then
Jun 8, 2021, 11:54 AM
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3/4 acre lot,all brick, with woods and a creek on the back side. 2012 sale.
Message was edited by: Tiggity®
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Oculus Spirit [81478]
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But then I have to live in Lexington
Jun 8, 2021, 12:16 PM
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There's not a buying boom going on there as well?
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Oculus Spirit [98001]
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There is. But everything is relative.
Jun 8, 2021, 12:47 PM
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We are being helped (hurt if buying) by the county council ruling to ban all new track developments (over like 6-8 units) for a full year. Since they couldn't get the penny sales tax passed a few years ago for roads because they got forced into allocating that money to libraries, water and sewer systems, green spaces, parks, etc., the tax failed. So no money for road improvements. So no new homes.
Not that it makes much difference since builders have slowed down anyway.
Existing homes will keep climbing around here for a year at least.
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Heisman Winner [136058]
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Good thing the deluge came and kept him from getting a
Jun 8, 2021, 9:26 AM
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really close look at that 'fence'.
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Oculus Spirit [79304]
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The inspector left it open.
Jun 8, 2021, 9:29 AM
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So the squirrels could walk through it instead of hopping over it.
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Oculus Spirit [81478]
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Well, on the flip side of that, for inspections anyway...
Jun 8, 2021, 9:33 AM
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I put a contract on a house in the old village back in February, got an inspection done, and found out that most of the floor joists were rotted out and would require some pretty major work to be done (like ripping out the floors, subfloors and a wall in the kitchen and a bedroom)to repair.
I ran from that deal; I was easy $50-$75K in getting it repaired. It also worked out better for the seller, because I saw just last night that someone came behind me the next week and paid $35K more for the house than I was going to.
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All-In [31959]
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but the buyers could be making the sellers fix it, right?***
Jun 8, 2021, 9:44 AM
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Oculus Spirit [81478]
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Sure, I guess there could have been some numbers shenanigans
Jun 8, 2021, 9:57 AM
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going on with raising the price of the house, then coming back off for repairs or something, but..I doubt it.
I rode by the house a few weeks ago and no one was working on it. Not saying it couldn't have already been done and the crew doing it was gone...but in the real world, none of this adds up, time-wise, Especially now. That was probably in late April-May when I rode my...it closed in March. I guess the buyer could be deferring doing it as well. But if it were me, and I was going to ever get it done, I'd do it ASAP just to be done with it. It would be a very disruptive repair.
When I broached the subject of repairs with the seller she was all "hellnaw". She wasn't budging. She wanted out of the house as she had just gotten married and was moving to Alabama or something, so they said. She really kind of screwed herself, as she accidently sent me some documentation where she had an estimate to get the crawlspace encapsulated, and the guy doing that noted the rotted joists. I saw that and asked my inspector to take some extra pics and look there. When I asked her about it, she said (through her realtor) that "her daddy had come by and looked at it and did something", and that something he did was probably look at it and tell her she needed to get that fixed because they were still rotten, covered with fungus and mold.
I think its more likely that whomever the next buyer after me got to inspect the house didn't see the rotted joists, and the seller sold the house and ran without disclosing it.
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All-In [46946]
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I don't know if you've heard, but I'm kind of an expert
Jun 8, 2021, 9:51 AM
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Appraisals are absolute scams. They see what the appraisal needs to be, and it appraises at that. Unless there are major issues. Not once in my long career of 12 months has an appraisal not come back exactly what I needed it to.
Inspections are not scams. You may get a lazy inspector, but for the most part they do their due diligence on what is wrong with your house. Your dude just didn't want to get wet. So I guess that worked for you. Next time I'm going to schedule the inspection when it's pouring rain.
STRUCTURAL ENGINEERS ARE SCAM ARTISTS AND CAN SUCK MY ####
Your best bet is to rent on IOP
Message was edited by: FBCoachSC®
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Scout Team [152]
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rookie
Jun 8, 2021, 9:59 AM
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your best bet is to live in your in-laws house and not pay the mortgage. just pay their bills and take the burden off of em has worked best for us
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CU Medallion [64837]
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Re: rookie
Jun 8, 2021, 12:19 PM
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Hall of Famer [21594]
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I'm about to close on my refi.....
Jun 8, 2021, 10:26 AM
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The exact same thing happened with my appraisal. I'm thinking about switching careers. They have it made and are making bank.
Literally was there all of 20 minutes and took 5 pictures and bounced.
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All-In [46946]
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When we refinanced before selling the dude
Jun 8, 2021, 10:29 AM
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came in, asked me 5 questions then walked out.
Appraisal hit what we needed
5 minutes total
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Oculus Spirit [81478]
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It doesn't always work like that.***
Jun 8, 2021, 10:33 AM
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All-In [49320]
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When I changed banks and got a new HELOC, the "appraisal"
Jun 8, 2021, 10:50 AM
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consisted of a guy coming out to confirm my house existed, and there was not another dwelling on the property. He took a picture from down on the road. The bank guy joked with me about it when he told me the guy was only looking for those two things.
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CU Medallion [55963]
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The ENTIRE housing industry has become a racket.
Jun 8, 2021, 11:05 AM
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No offense to any realtors, I know some fine people in the industry.
I have had the same experience with inspections on both the buying and selling side. Highly variable and fishy. Same with appraisals.
Meanwhile, our country suffers due to perverse incentives that decrease available affordable housing and incentivize McMansion building.
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All-In [46946]
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It is insane. There is no way this is sustainable
Jun 8, 2021, 11:19 AM
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people are buying houses with no inspections left and right for 20K over the already inflated value because nobody wants to build right now.
Eventually home prices will drop and that person who paid a total of 40% over value will be upside down on his mortgage and take a massive hit.
I see another 2008 building
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Oculus Spirit [81478]
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meh...I've been saying that for about a year and a half.
Jun 8, 2021, 11:36 AM
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But the demand is legit and the people buying, especially for cash with no appraisal/inspection, can afford it.
I'm not sure the bubble isn't anything more than inflation. And in that case, its not a bubble as much its just a shifted market. No one I know in real estate who has been in it for any time has seen a shift in demand and prices this fast, but, change-cycle times of everything have increased.
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Hall of Famer [21594]
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The market will crash once the Boomers start dying off and
Jun 8, 2021, 11:59 AM
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there are more homes for sell than needed.
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Oculus Spirit [81478]
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So like 20 more years then, huh?
Jun 8, 2021, 12:17 PM
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Yeah, I'll prob be dead in 20 years, too.
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All-In [46946]
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Hopefully***
Jun 8, 2021, 12:19 PM
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Oculus Spirit [81478]
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You and I will prob die about the same time
Jun 8, 2021, 12:21 PM
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Sucks for you
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Hall of Famer [21594]
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Oculus Spirit [81478]
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I may need to buy a house before then.
Jun 8, 2021, 12:28 PM
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I probably won't want to rent that long.
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Oculus Spirit [79304]
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What incentives are going on?
Jun 8, 2021, 11:25 AM
[ in reply to The ENTIRE housing industry has become a racket. ] |
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Sure there are low interest rates, but the cost of building materials right now is a very adverse incentive fore new construction.
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CU Medallion [55963]
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Not right now. Leading up to now that's where the profit was
Jun 8, 2021, 11:33 AM
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in McMansions. Meanwhile, old school 3 BR, 2 BA middle class homes were not being built. And forget about OLD old school 2 BR 1 BAs like from the 1950s. No one builds new ones of those. So a LOT of the hot action in the housing market is for older homes with 3-4 BRs and 1-2 BAs.
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All-In [46946]
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The old houses are being snapped up by investors too
Jun 8, 2021, 11:44 AM
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who buy an old run down house for pennies on the footage, drop 20k in a remodel then sell the house for 100-200/sqft.
A guy I graduated with and his dad do this.
They buy an old run down house nobody has lived in in 40 years (there are a bunch of old sharecropper houses around)
Buy the house for 10K
The son lives in the house while remodeling it over the course of a couple of months (50K-75K in materials because the son does all of the remodeling) Then they sell the house for 150-200k
It's a very lucrative business
Message was edited by: FBCoachSC®
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Oculus Spirit [79304]
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Your friends with an HGTV star?
Jun 8, 2021, 11:51 AM
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sooooooooooooooooooooooooooooooooo jealous.
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All-In [46946]
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Not really. Just a huge ### hole
Jun 8, 2021, 11:58 AM
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nobody ever like him. His dad had money so he was the typical huge truck, all the nice toys etc and though the world owes him everything.
He's now in his 30's, can't even get a date (because massive ### hole), trump supporter that works for daddy
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Hall of Famer [21594]
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I've seen this guy too.
Jun 8, 2021, 12:26 PM
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I know about 20 like him.
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All-In [46946]
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It's amazing how many there are like this
Jun 8, 2021, 12:34 PM
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We were a small school so we had our favorites but pretty much everybody got along with everybody.
But this dude was just hated by everybody. Only reason people put up with him is because he would buy beer and cigarettes for kids who let him hang out with them.
But he was just universally hated.
You would think that after 15 years of maturing he would be different.
Nope. Still can't be around him for more than 5 minutes without being ready to punch his obnoxious face.
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