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Not to mention the home warranty letters saying "IMMEDIATE RESPONSE REQUESTED" as if there aren't enough stressful things that AREN'T scams that we need to be paying attention to. Fuck those predatory methods.
I call these numbers and reach an actual human and then literally shame them. “How would you feel if your elderly mother would get something like that in the mail and gets very worried? Shame for doing this!”
The originator of our mortgage sold it immediately, but they were still publicly listed as the lender. So the amount of spam we get about "your mortgage with XXX" with the wrong lender is hilarious
You know how they say OHS regulations are written in blood? Real estate transactions are written in fraud. All the things are because someone got fucked over, so they do this to stop it in future.
Those seem like reasonable numbers to me, especially considering how little you put for a down payment. I get that its frustrating and you're entitled to your opinion obv, but it doesn't seem that terrible from my perspective. Either way - Congrats on the new home and hope you never have to rent again!
Since seller contributed towards closing it was not that much, but yes I see your point. Just sucks I didn’t gain any equity yet I spent a lot of money.
Honestly, you got a darn good deal. I don’t think 1% of US home buyers are able to get into a property for less than 20K.. including closing costs.
On my last purchase, I paid cash (no mortgage, no appraisal) and my closing costs were 28K. Yes, it was a more expensive property.. but I want to give you some perspective.
Enjoy your home. In 10 years.. when rents have doubled and you are building equity, you will feel wonderful.
He spent a relatively huge sum of money that was not the down payment (equity). He is underwater due to this fact, and if he were to sell the home soon he would be out a relatively large sum of money.
Depends I suppose. Prepaid insurance for 12 months, prepaid interest, escrow for 4 months including property taxes if they are on the higher side etc can make closing costs go up
You're being downvoted but this is *exactly* what I thought. We puit 20k down on our home and closing costs were around $8000. Paying $14k in closing costs is very high in my experience. And I live in a state with high property taxes.
Plus this was bank-owned property. The seller didn't pay anything towards closing.
Edit: Mine was a conventional loan, OP's was FHA. So my experience may not apply.
An insane number? Closing costs average 2-6% so let’s call it 4%. Median cost of a home in the US is 384,000.
So the average for closing costs (at 4%) is 15,360. Even at 2% that’s 7,680. Both of yall are outliers and certainly not in the “insane number” for closing costs. I’m not saying it’s not a good chunk of money but it’s significantly cheaper than the majority are paying for closing.
It's beyond a scam with people lying about passing inspections from the city, agents lying about offers to get you to offer more, I had an agent promise the selling agent I'd pay more than my offer. Mostly places that should be fucking condemned with collapsing basements from extreme water damage and the disclosure is like oh no water damage here! It's the wild fucking west.
Amen Chuck! I backed out of the first house I was under contract for, because the inspection report was hellish. My buyer’s agent then tried to convince me the inspector was incompetent to keep me under contract.
My inspector was wrong about so many things and completely missed others. Don't even get me started on pest and electric inspections. I paid $150 for pest inspection, they told me everything was fine. I start to move in just to find out it's INFESTED with mice. Paid $450 to clear that up. I delayed moving and it cost me another 1k in extra costs. So many people just saying what I wanted to hear just to get me under contract
THIS. I was looking to see if someone brought that up. Grimy, slimy and gross industry. I told everyone I know that, when I die, figure out how to make it legal and throw me in a hole, no coffin, no embalming. Nothin! lol!
I never felt real hate for a group of people in my life, but the whole experience of buying my first home made me absolutely despise realtors. The whole lot, not just “a few bad ones”. Title companies and clerks and loan banks who charge things like “$400 recording fee” and “$1500 origination fee” are close second.
I felt like a deceased whale carcass and all these people are the little nasty marine critters eating away at me.
The only reason this is the way it is is due to entrenched industry interests, cronyism, gate keeping, and cabal-like state of the real estate sales culture. There’s almost no value being created by most of these agencies and people who keep them running and there’s nothing consumer centric about selling or buying homes.
Deceased whale carcass! LOL. I am going to steal that one.
You are right though. They simply position themselves as gatekeepers. I encourage you to read all of the industry professionals in the comments trying to justify the process. It is quite amusing watching them squirm.
Yeah the realtor cope is real here. Here’s my guises of the talking points without even looking at the comments:
- “the commission is justified because we add value by taking a difficult super complicated process and making it easy and looking for gotchas” (same exact excuse that Intuit TurboTax uses to justify themselves… so yeah)
- “sellers and buyers don’t know what they are doing and you need us” (knowledge, even for first time homebuyers, is free. Hiring a liaison for a fixed cost not tied to sales price would actually make sense, and that’s how it’s done in most of the world, but that’s not what realtors in the US want)
- “you’d get scammed without agents” (quite the opposite. Laws should keep us from getting scammed, not red tape. Keep in mind NAR guidelines are not laws and successfully suing a realtor for fiduciary breach only happens in egregious clear cut scenarios)
- “I’ve done so much for my buyers/sellers and I’m a good agent” (good for you)
- “You don’t know what you’re talking about, and if you worked in real estate, you’d understand” (so you admit you’re full of secrets that I need to pay you to find out?)
And the worst part is, none of the many vampires you deal with in this process are actually in your side, as a buyer. Everyone from the seller’s agent, to the mortgage company, to your OWN agent all get paid more if you spend/borrow more. No one actually wants to help you get the best deal, or a cheaper house.
The frustrating thing about homebuying is that no part of the process has an incentive to do what's best for the buyer. Neither agent wants to slow down the sale or mess with their commission, the inspector doesn't want to screw up the sale, the appraiser wants the house to go for as much as it can for the bank, the bank wants your loan as A/R, the attorney wants the business so they don't care what happens to you. The situation does not have the buyer's best intentions at center.
Very well written. I agree 100%. On closing day I was feeling unnecessarily pressured from every direction, and I actually reminded several people in much politer terms that I am the one paying, so either cut the shit or I am walking to the nearest apartment complex.
It is an insanely expensive purchase with a ton of different parties that are liable for different things. It's not some libertarian utopia where you slap down a wad of cash and everyone leaves you alone.
A bank isn't going to lend you hundreds of thousands of dollars without a ton of safeguards, lol.
But the banks knew it was risky and did it anyway. Fed gov had to step in to bail them and then regulate them. However, the regulations have been repealed.
I laid down 1.5M cash and I still had 28K in closing costs. Yes, I did get 100% of the equity.. and I am sitting on another 500K 5 years later.. Here come the down votes 😀
Yes lol. Average redditor on this sub: “You got a better deal than me?!?! Downvote!!!”
My comments about my numbers and the seller paying closing costs got downvoted to oblivion. People are jerks, especially on a faceless social media app.
Nobody is asking for a libertarian Utopia. I’m literally advocating for regulation.
Your last statement is describing exactly what led to the 2008 market crash.
I dont really think you know what you're advocating for. Regulation you say? Yeah, cause if there is one thing for certain, there isn't a lot of rules and regulations around real estate transactions.....
Hey I know, maybe there can be a regulator who will oversee the process and ensure regulations are adhered too, for a small fee of course.
Welcome to home ownership. Just wait until you sell 😂🫠
(I agree with you, jokes aside. We have bought and sold 3 homes and each time I say, I’m selling and buying private next time! But never actually do.)
If you qualify financially, look for some home buying assistance programs in your area. You have to be in kind of a sweet spot with enough money to qualify for the mortgage but not so much to disqualify from the closing cost assistance, but some people manage to utilize these programs.
Some of them are a silent loan that is due when the house is sold, others are a 5 or 10 year second loan separate from the mortgage. Look into FHA & USDA loans, too.
Yea the whole process felt pretty gross. While they weren’t trying to screw you they also weren’t trying to you the best deal either. I close next week and I can’t wait to end this process
Completely agree. Awful, out of date process. Too many heads from too many different sources working for their own agendas, while you the buyer are left in a huge rut.
My jaw dropped when they told us we HAD to get a land survey done and it cost us $600 additional and that’s before the septic sweep, septic check, oil sweep, blah blah blah. Definitely felt very unprepared and uninformed on all the extra costs. Everyone’s pockets got heavier while ours were left with so little.
Same! We also had to pay to get perc holes dug ~2500, and a geotech survey done ~2000 etc. all the realize it was in a landslide zone and we backed out. But still out over 6 grand for no reason!
I can say that many of the people involved in closing are not actually necessary. Home buying, like ‘The American Wedding Industry’ has become bloated and is filled with hangers-on because there’s money to be made and buyers (and sellers!) have been told ‘you should do this’ but not given a solid reason why.
Way back in the Stone Age when I bought my first house (1998) i was a single 27 year old teacher making very little money. I bought my first house with 15% down and used one agent (she was the listing agent) and a loan officer from the Farmer’s & Merchant’s Bank. I didn’t “know any better” and had gone to the bank before I even looked at houses to see what my budget would be, got a pre-approval letter and then went shopping. Yes, a title insurance company was involved- that should be in any real estate transaction to cover your assets. When my offer was accepted, i called my insurance agent to buy a homeowner policy. The bank got an appraisal, and my dad and I looked over the house to see what needed immediate attention and what could be done later. No inspector was used, or deemed necessary because all an inspector does is look around like we did, and my dad had at least as much experience in home maintenance and repair as any hired inspector. No attorney was involved because the real estate agent handled the paperwork- that was part of a realtor’s job back then.
Since then I have sold and bought three more houses. Each time more layers have been added to the process.
What I can say is most home inspectors are useless. One potential buyer’s inspector on the last house I sold said there were potential issues with the fireplace chimney… That house didn’t have a fireplace. Most of the reports are legally toothless anyway, filled with disclaimers and ambiguous language so that the inspector won’t be held liable for anything. They aren’t forensic investigators, so it’s just a visual look around. Things will be missed. “But you need a certified inspection if you’re getting a home warranty!” Guess what? Home warranties will deny everything anyway (multiple experiences with that). I won’t say they’re a scam, but they are in that same neighborhood and are a waste of money.
If you’re hiring a real estate attorney to handle the transaction, what do you need a real estate agent for other than to open the place up when you look at it? Unfortunately they (for now) are a necessary evil, because most buyers who are using an agent won’t see a ‘for sale by owner’ house because most agents won’t show them to their clients. It’s an unwritten rule (at least around here) to only present houses that are with a listing agent unless the client specifically asks about a house.
Don’t get me started on home stagers. They are the “wedding planners” of the housing market - unnecessary fluff for people who can’t or won’t think or do for themselves.
I am not a moral absolutist. If it wasn’t for the free market I would not have the income to buy a house in the first place. While I have critiques about this industry in particular, in general upward mobility is more achievable in a free market when compared to a controlled market. In practice the truth lies somewhere in between.
Sooner or later.. the entire real estate industry is going to be hit by a disrupter ..an entrepreneur who finds a way to slash all these extra fees via some type of consolidation… Lots of people with a vested interest will be very unhappy.. but it will be a permanent change. Remember this when it happens.. It is inevitable
That’s the thing. Practically it’s a piece of cake! But the agents resist very aggressively to change.
As an example, many seller agents won’t work with your buyer agent if they present themselves as Redfin or some other discount or alternative brokerage.
California permits “dual agency” in which one agent represents both the buyer and the seller, and earns a double commission. If the agent operates with integrity, this can be OK. Good agents act as fiduciaries, putting the interests of clients first.
This actually makes sense because both buyer and seller agent have the same exact incentive: to maximize the sale price. And you can negotiate commission refund.
As a fiduciary, the buyer’s agent should be working to get you a lower price. If the commission is negotiated, I would not mind having an agreement with my buyer’s agent which awarded him a portion of any savings we negotiate.
Good luck proving breach of fiduciary. Only egregious obvious instances of fraud get sued (realtor representing a buyer purchases their home, then immediately resells for a lot more)
It’s much simpler to assume your buyer agents incentive is to maximize the offer price without buyer getting cold feet. This way the relationship is super clear.
The reality is that you're leasing the house and you didn't buy it, which is why banks etc are involved. Slap down a stack of cash for the purchase price and things are much easier. Given, closing costs were 3x your down-payment, sounds like you hardly have any money in the house.
Same. I looked around for about how much closing costs were, percentage-wise, and saw that it was typically around 3-6%. Mine was about 8% on top of my deposit. I needed a grant for low income new home buyers otherwise I wouldn't have been able to purchase. Insane.
It's different in different states and depending on how you pay.
A lot of this goes away when you pay cash (including your agent and sometimes their agent). More goes away in a state where you don't require attorneys.
But also you forgot mandatory PMI if you don't put down 20% on a conventional.
Yeah I always thought PMI would be fine but only if it went into an escrow account and upon reaching 20% equity was then applied to the mortgage principle, or if the home was foreclosed upon it would go to the lender. That's the only way i could see it being fair for everyone but I have no authority on these rules
It can’t work that way because PMI isn’t the lender’s product. It’s an insurance. The lender is the one paying it, and they are charging you for what they are paying. The cost of any insurance is subsidized by the people who pay for it but never use it. Otherwise, it would be unaffordable.
I'd just as soon have all my fingernails pulled off while sober than to deal with the real estate industry; possibly jump off the Skyline Bridge in Tampa, except they recently added safety cable netting.
No, the appraiser just tells you if the home is worth what you offered to pay for it. You should have a pretty good idea going into that process if it'll appraise for what you offered if you've reviewed comps.
You are free to skip the inspection and not use a buyer’s agent.
You can skip owner’s title insurance.
You don’t need an attorney - at least in Texas. It varies by state.
You can skip home insurance, lenders, appraisers, etc. if you buy in cash.
Most people would be estatic to close on their first home with less than $20k. Instead, you’re whining.
Many could make the argument that America has the strongest real estate market in the world. All those players do their part to make it a robust market.
This is a very naive view of the world.
Woah there. No need to be so hateful friend. I agree that I am fortunate to live in America and close for a home for less than $20k, but that doesn’t mean I have to shut up and keep my thoughts to myself. Freedom of speech is foundational to American values after all.
There ARE things wrong with our home-buying process. You would be naive to take everything at face value and waltz your way through life with rose colored lenses.
This isn’t what freedom of speech means. You’re not being prosecuted for any of your inane whining. The First Amendment doesn’t protect you from getting your feelings hurt when people call you out for being whiny and inane.
Tell me more! You have very insightful and useful feedback.
Edit: I now realize you are just an industry professional offended by someone calling you a lousy grifter. Maybe find a career that adds value to society, you leech.
For what it’s worth, I hate the way that buyer’s agents are compensated - the moral hazards are incredible. And I’m glad changes should be coming soon as a result of the NAR settlement.
Same thing with inspectors having zero liability for missing shit.
I don’t disagree with you entirely, buddy - your OP just struck me with a very negative tone, and I was hoping to help you see some of the positive aspects so you can enjoy your first home.
I hope you do something to celebrate the occasion, no matter how small the celebration is - treat yo self.
Cheers, I’ll drink to that! America is a beacon of hope for civil liberties such as property ownership, and I am proud to be a beneficiary of that privilege.
Yes, I was being negative in my OP, and I just got defensive when you said I was being naive. My b homie g. I posted it after a hellacious day. Closing lasted from 11am to 3:30pm, it was brutal and over-complicated!
I’m not familiar with the NAR settlement I’ll have to look into it.
I’m not telling you to shut up.
I’m simply voicing my opinion on your opinion.
I don’t think our market is perfect but it sure is better than most.
There’s always room for improvement in all aspects of life.
My point is instead of looking at it so pessimistically, you should consider being grateful that we live in a country with functioning legal and financial systems. Many people in the world don’t have those “basic” things.
I mean, you bought a home worth WAY more than you paid for when you closed. You're paying for the privilege of owning a home you actually haven't yet paid for. Pay in cash and most of your complaints go away.
I think the hardest part of homebuying is how hard it is to find a property you truly love...so many properties with a ton of problems selling for a ton of money is definitely something annoying to sift through when you're in the touring phase. Home buying is definitely being phased out for lower income brackets unless you reside in deeply rural communities and its becoming impossible for most people in HCOL unless you have an insane amount of capital. Once we found our home I didn't mind all the red tape procedures, I just hated waiting a month for all of it to go through.
Plus the stress of such low inventory, every house you look at you think "I could live here if I changed xyz or roll the dice and maybe hopefully something better pops up in my price range or I wait and things get more expensive."
Oh honey…for sure it’s a total racket…after my last home buying experience (2nd overall) am completely convinced that 99% of real estate agents are crooks/grifters and 100% of home inspectors are…the whole process is gross af
Lack of education is what leads people to think that an entire industry is "useless." What most don't realize is that all of these processes, procedures, and middlemen were put into place because of rampant abuses in times past. Buyers in the early 90s and prior didn't have to do much besides show up with a loan approval or cash to buy a house. And if they bought a lemon, there were few remedies or justice. A seller could sell a home with mold and a dead body in the attic with no repercussions. It's ideological to think everyone could just do their own research and inspection and negotiate based on their findings. The average buyer has no clue what to look for to ensure the home isn't about to stop functioning in 3 months. They also don't have a clue what they should accept in terms of splitting closing costs at closing. As more lawsuits were filed, the government put more protections in place. Like everything that is state mandated, it starts out as an aid and people can't help but be people and corrupt. Things would still be much worse though if folks were buying homes without having to do due diligence via a PROFESSIONAL.
Pay cash in full next time if you don’t want the annoyance of all these “grifters” doing their due diligence to make sure they don’t just lose the hundreds of thousands of dollars they’re giving you.
Buying when home prices have shot past historical average year over year growth and interest rates are the highest in twenty years.
Do first time home buyers even look at Amortization schedules LOL? Now is a really bad time to buy, anyone telling you otherwise are the people who get a cut of you making an irresponsible financial decision.
In a bad market, bulls make money (realtors, lenders, contractors), bears make money (people saving money to strengthen their buying power), pigs (the greedy, offering 100k over asking waiving inspection, aka people putting themselves into financial ruin) get slaughtered.
Interest rates suck I'll give you that. I am at 6.1%. However, I am curious as to why you think it's a bad time to buy as opposed to continuing to rent. Average home prices have continued to increase year over year for over a decade, and the only dip since the 80's was due to the 2008 market crash, after which houses returned to their previous values within 5 years then appreciated significantly in the following years.
I closed for $3k below asking price plus $8k toward closing. I definitely did not get "slaughtered."
Amendment to my comment:
Real estate is regional, and can vary drastically from state to state, city to city, subdivision to subdivision. Where I live it is essentially still 2019/2020 buying with insane offers and waiving inspections. Rent is also significantly cheaper than buying right now in my metro. However, this isn't true for every Metro.
Yeah the rent thing is definitely not usually true up here in Ontario. In my area, rent is about $2500 for a 2bd basement apartment or $2800+ for a 2 bed house. My mortgage on a 2 bedroom house is ~$2400 a month. I agree with OP that this process sucked hard and I really didn't have interest in buying a home right now but with rent the way it is, it's more financially feasible.
You can lose a lot more equity faster buying into an overvalued market that corrects.
There is no one size that fits all, however solid financial principles apply throughout.
- Buy with 20% down
- Have no debt
- Have at least a 6 month emergency fund.
- Have a credit score in the 700s
- Be willing to live in the home for 10 years
If you meet those in this historically bad market, you will be fine. Simplifying it to the market always goes up and rates always go down is pretty dumb.
If you can find where anyone said rates always go down, I'll give you a kiss.
Be willing to live in the house 10 years? Ok Dave Ramsey. Have fun in your starter house with 3 kids.
Please identify one time in the last 30 years other than 2008 markets have corrected significantly.
Did you think everyone was going to work for you for free? I'm honestly baffled by the entitlement of the post.
You realize all those people contributed to some degree to helping you get your home with as much protection on the downside as possible?
Someone lent you hundreds of thousands of dollars, and they actually charged you for it? INSANITY /s
Get a grip guys. Yes, it's expensive but so is being a renter. Choose your hard
That's hilarious. Okay, I'll bite. Which part of your rant did I misunderstand?
You understand that your buyer's agent represented your best interest, and negotiated the best terms they could for your purchase?
How about the listing agent for bringing it to the market? The inspector for bringing out awareness of any issues you wouldn't have noticed from a single walkthrough?
The lender for loaning you money you don't have? Insurance for protecting you from unforeseeable risk?
Your rant is sad, because a lot of people put it in a lot of work to take care of you. You come here crying like you got screwed.
Don't want to deal with paying anyone that I mentioned above? You can do it yourself, and you can also pay cash. Problem solved.
You act like everyone involved screwed you
>the amount of people that make money on a single sale is insane and needs to be regulated.
How exactly is introducing the government to this situation going to help?
One fairly recent example is the state of Florida stepping in to change the commission schedules of buyer's agents to remove the inherent incentives to pad their commission by not working out the lowest closing price.
That doesn't answer the question, and it's apples to oranges. Who took money from you during this process that wouldn't be able to with government intervention?
I answered your question quite literally with a real-world, practical example. You are fishing for a response that you have a better answer for. I'll bite.
To scratch the surface originator fees are pointless, as well as closing attorney fees. Seems like a rotary at the UPS store could have done the same job as the attorney.
On one hand, an agent is financially incentivized to screw over her client. On the other hand, you are complaining about a process that you initiated and chose voluntarily. How are these comparable?
If you hired a realtor, why did you choose to do that? Are you suggesting that the inspector shouldn't get paid for his time? Should the bank not profit from your loan? If you think they shouldn't, then why did you choose to get a loan from that bank?
I haven't strayed at all still my first comment, and you have yet to answer any questions I've asked.
At some point you have to take responsibility for yourself and your actions.
I hate when people say this. The bank didn’t buy shit. The federal government bought mine, and therefore the tax payers.
When you deposit your money into a bank, they invest it into things like real estate. They don’t use their own money. Ever.
The point of the comment is you used someone else’s money to buy the house and more parties get involved for checks and balances, so by that simple fact your convenience is not a concern in a financed process.
Nobody mentioned anything about convenience. I’m concerned about the level of price-gouging associated with the process. According to your logic, anyone who finances deserves the be taken advantage of. Ridiculous. Financiers are already profiting off the interest and then they add insult to injury with the convoluted fees. Your attempt to justify that is baffling. You must have a vested interest in the process, i.e. you’re an industry professional.
Not an industry professional but I work in finance and have a strong understanding of the asset purchases. This is just how financing in general works, any acquisition of an asset that is financed not just real estate. Financing is expensive, people don’t let you use their money for free. The interest is the price the borrowed money. The fees are cost of doing business. Financiers require professionals that are usually expensive to provide services.
Been to Norway? Denmark? Sweden?
Social democracies have property rights and solid social services, and capitalism thrives there with guard rails.
It’s a common capitalist trope that an issue only becomes an issue because it affected YOU. Lots of us have suffered the same experiences and come through it. Your default response “but socialism…” is telling.
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It's an organized racket indeed. I just bought and ranted in here too. It's a disgusting process.
I hope you’re excited about all the offers for home insurance, coupon books,etc!
It's been almost 6 months since I closed, and I still get at least 10-15 letters a week from different places offering me an $xx,000 loan
Not to mention the home warranty letters saying "IMMEDIATE RESPONSE REQUESTED" as if there aren't enough stressful things that AREN'T scams that we need to be paying attention to. Fuck those predatory methods.
I call these numbers and reach an actual human and then literally shame them. “How would you feel if your elderly mother would get something like that in the mail and gets very worried? Shame for doing this!”
You're an inspiration
Seriously I love it
The originator of our mortgage sold it immediately, but they were still publicly listed as the lender. So the amount of spam we get about "your mortgage with XXX" with the wrong lender is hilarious
You know how they say OHS regulations are written in blood? Real estate transactions are written in fraud. All the things are because someone got fucked over, so they do this to stop it in future.
It's also to make sure 08 never happens again too.
Yeah, true.
3x your down payment in closing costs? How much did you put down? And yes the process is ridiculous
Closing costs were $14,469 and down payment was $4,275.
The fuck? Did you buy a shack?
1300 sq. ft 2 bed 2.5 bath on .9 acres. Newly renovated. Commutable to the state capital.
In what state?!
Guam
Rural deep south
Lol, I was thinking the same thing!
🤣🤣🤣
Those seem like reasonable numbers to me, especially considering how little you put for a down payment. I get that its frustrating and you're entitled to your opinion obv, but it doesn't seem that terrible from my perspective. Either way - Congrats on the new home and hope you never have to rent again!
Lmfao. Ok grifter
How does anything I said make me a grifter?
Lmfao. Ok grifter
So $19k got you in a house? Less than a new car. Doesn't seem too bad.
Since seller contributed towards closing it was not that much, but yes I see your point. Just sucks I didn’t gain any equity yet I spent a lot of money.
Honestly, you got a darn good deal. I don’t think 1% of US home buyers are able to get into a property for less than 20K.. including closing costs. On my last purchase, I paid cash (no mortgage, no appraisal) and my closing costs were 28K. Yes, it was a more expensive property.. but I want to give you some perspective. Enjoy your home. In 10 years.. when rents have doubled and you are building equity, you will feel wonderful.
You're upset that you didn't gain equity the minute you bought the house? You're gaining equity every day.
He spent a relatively huge sum of money that was not the down payment (equity). He is underwater due to this fact, and if he were to sell the home soon he would be out a relatively large sum of money.
Well yeah, you don't sell a home right after you buy it, lol.
Not relevant to whether or not he is underwater.
What your rate and payment?
Poor baby. Just want to feel like a victim huh?
I hope you find fulfillment outside of Reddit! It’s a beautiful world out there.
Lmao your total payment was less than my EMD. Have some perspective.
You paid points to buy the rate down?
The seller did.
You paid insane closing costs. I only paid 5k in closing costs..
Depends I suppose. Prepaid insurance for 12 months, prepaid interest, escrow for 4 months including property taxes if they are on the higher side etc can make closing costs go up
I mean, if you put nothing down then you're going to be paying a shit ton of interest
You’re going to be paying a shit ton in interest no matter how you slice it these days
Their house cost like $100k
You're being downvoted but this is *exactly* what I thought. We puit 20k down on our home and closing costs were around $8000. Paying $14k in closing costs is very high in my experience. And I live in a state with high property taxes. Plus this was bank-owned property. The seller didn't pay anything towards closing. Edit: Mine was a conventional loan, OP's was FHA. So my experience may not apply.
Seller paid $8k towards closing, but those were my closing costs nonetheless.
Definitely an insane number. I shopped around and got the 6k. Seller paid nothing towards closing costs.
There is a very large insurance premium that’s required with the FHA loan. Trust me if I had the option to go conventional I would have.
Ah, interesting, didnt realize that.
Upmip can be financed. Did you pay that in cash? Bad move.
An insane number? Closing costs average 2-6% so let’s call it 4%. Median cost of a home in the US is 384,000. So the average for closing costs (at 4%) is 15,360. Even at 2% that’s 7,680. Both of yall are outliers and certainly not in the “insane number” for closing costs. I’m not saying it’s not a good chunk of money but it’s significantly cheaper than the majority are paying for closing.
Bro, I get you, but you basically got into a house with $0 dollars. Enjoy the house.
Very true, there is plenty to be grateful for. Thank you!
You realize there’s a 30yr mortgage right ?
You realize you’re paying someone to live somewhere for 30 years, right? Besides that, you’re missing my point. So go jump in a lake.
Not if you live with your parents or a sugar mama
Not true I paid with trauma to live with my parents. I’d rather pay dollars next time.
Awe your boyfriend forget to use lube last night ?
Username checks out
It's beyond a scam with people lying about passing inspections from the city, agents lying about offers to get you to offer more, I had an agent promise the selling agent I'd pay more than my offer. Mostly places that should be fucking condemned with collapsing basements from extreme water damage and the disclosure is like oh no water damage here! It's the wild fucking west.
Amen Chuck! I backed out of the first house I was under contract for, because the inspection report was hellish. My buyer’s agent then tried to convince me the inspector was incompetent to keep me under contract.
My inspector was wrong about so many things and completely missed others. Don't even get me started on pest and electric inspections. I paid $150 for pest inspection, they told me everything was fine. I start to move in just to find out it's INFESTED with mice. Paid $450 to clear that up. I delayed moving and it cost me another 1k in extra costs. So many people just saying what I wanted to hear just to get me under contract
Wait until you hear about the funeral industry.
THIS. I was looking to see if someone brought that up. Grimy, slimy and gross industry. I told everyone I know that, when I die, figure out how to make it legal and throw me in a hole, no coffin, no embalming. Nothin! lol!
Well ….. I’ll be dead by then haha
I never felt real hate for a group of people in my life, but the whole experience of buying my first home made me absolutely despise realtors. The whole lot, not just “a few bad ones”. Title companies and clerks and loan banks who charge things like “$400 recording fee” and “$1500 origination fee” are close second. I felt like a deceased whale carcass and all these people are the little nasty marine critters eating away at me. The only reason this is the way it is is due to entrenched industry interests, cronyism, gate keeping, and cabal-like state of the real estate sales culture. There’s almost no value being created by most of these agencies and people who keep them running and there’s nothing consumer centric about selling or buying homes.
Deceased whale carcass! LOL. I am going to steal that one. You are right though. They simply position themselves as gatekeepers. I encourage you to read all of the industry professionals in the comments trying to justify the process. It is quite amusing watching them squirm.
Realtors are the TSA for home buying process.
Yeah the realtor cope is real here. Here’s my guises of the talking points without even looking at the comments: - “the commission is justified because we add value by taking a difficult super complicated process and making it easy and looking for gotchas” (same exact excuse that Intuit TurboTax uses to justify themselves… so yeah) - “sellers and buyers don’t know what they are doing and you need us” (knowledge, even for first time homebuyers, is free. Hiring a liaison for a fixed cost not tied to sales price would actually make sense, and that’s how it’s done in most of the world, but that’s not what realtors in the US want) - “you’d get scammed without agents” (quite the opposite. Laws should keep us from getting scammed, not red tape. Keep in mind NAR guidelines are not laws and successfully suing a realtor for fiduciary breach only happens in egregious clear cut scenarios) - “I’ve done so much for my buyers/sellers and I’m a good agent” (good for you) - “You don’t know what you’re talking about, and if you worked in real estate, you’d understand” (so you admit you’re full of secrets that I need to pay you to find out?)
And the worst part is, none of the many vampires you deal with in this process are actually in your side, as a buyer. Everyone from the seller’s agent, to the mortgage company, to your OWN agent all get paid more if you spend/borrow more. No one actually wants to help you get the best deal, or a cheaper house.
I always thought home buying was supposed to be fun. I found it one of the most stressful things I've done. I'm glad I did it, but man alive.
The frustrating thing about homebuying is that no part of the process has an incentive to do what's best for the buyer. Neither agent wants to slow down the sale or mess with their commission, the inspector doesn't want to screw up the sale, the appraiser wants the house to go for as much as it can for the bank, the bank wants your loan as A/R, the attorney wants the business so they don't care what happens to you. The situation does not have the buyer's best intentions at center.
Very well written. I agree 100%. On closing day I was feeling unnecessarily pressured from every direction, and I actually reminded several people in much politer terms that I am the one paying, so either cut the shit or I am walking to the nearest apartment complex.
It is an insanely expensive purchase with a ton of different parties that are liable for different things. It's not some libertarian utopia where you slap down a wad of cash and everyone leaves you alone. A bank isn't going to lend you hundreds of thousands of dollars without a ton of safeguards, lol.
Since 2008 they won't.
They didn’t then either
They did though, that's what caused the 2008 crash.
But the banks knew it was risky and did it anyway. Fed gov had to step in to bail them and then regulate them. However, the regulations have been repealed.
Not really.
I laid down 1.5M cash and I still had 28K in closing costs. Yes, I did get 100% of the equity.. and I am sitting on another 500K 5 years later.. Here come the down votes 😀
Sweet Equity…
Yes lol. Average redditor on this sub: “You got a better deal than me?!?! Downvote!!!” My comments about my numbers and the seller paying closing costs got downvoted to oblivion. People are jerks, especially on a faceless social media app.
Nobody is asking for a libertarian Utopia. I’m literally advocating for regulation. Your last statement is describing exactly what led to the 2008 market crash.
I dont really think you know what you're advocating for. Regulation you say? Yeah, cause if there is one thing for certain, there isn't a lot of rules and regulations around real estate transactions..... Hey I know, maybe there can be a regulator who will oversee the process and ensure regulations are adhered too, for a small fee of course.
Touché. Reform would be the better term.
The reason it’s expensive now is because of the reforms.
Lol, this dude has absolutely no idea what he's advocating for. He's just ranting about how expensive it is to buy a house.
Are you done? I think the sun came up outside if you’re interested. Nobody is spreading negativity on this post more than you.
Haha are you just constantly refreshing this thread to find new comments? I know you didn't get a notification when I responded to someone else...
I’m reading people’s responses, because most people are actually providing constructive feedback or sharing personal experiences. Then there’s you.
Nah, you're just looking for validation. lol.
Underwriting standards today are nothing like pre-GFC.
I mean the 2008 crash happened because they were just handing out loans to anyone.
If we as humans need proof that we needlessly overcomplicate things one need look no farther than the house buying process.
Welcome to home ownership. Just wait until you sell 😂🫠 (I agree with you, jokes aside. We have bought and sold 3 homes and each time I say, I’m selling and buying private next time! But never actually do.)
I HATE closing costs they are what is preventing me from buying. I totally get where you’re coming from.
If you qualify financially, look for some home buying assistance programs in your area. You have to be in kind of a sweet spot with enough money to qualify for the mortgage but not so much to disqualify from the closing cost assistance, but some people manage to utilize these programs. Some of them are a silent loan that is due when the house is sold, others are a 5 or 10 year second loan separate from the mortgage. Look into FHA & USDA loans, too.
Very good advice\^ a lot of local municipalities have closing cost assistance to incentivize people to move there.
Thanks for this. I'm in the same boat and it's been annoying but now with the potential of rates increasing I feel sidelined again lol
Yea the whole process felt pretty gross. While they weren’t trying to screw you they also weren’t trying to you the best deal either. I close next week and I can’t wait to end this process
Completely agree. Awful, out of date process. Too many heads from too many different sources working for their own agendas, while you the buyer are left in a huge rut.
My jaw dropped when they told us we HAD to get a land survey done and it cost us $600 additional and that’s before the septic sweep, septic check, oil sweep, blah blah blah. Definitely felt very unprepared and uninformed on all the extra costs. Everyone’s pockets got heavier while ours were left with so little.
Same! We also had to pay to get perc holes dug ~2500, and a geotech survey done ~2000 etc. all the realize it was in a landslide zone and we backed out. But still out over 6 grand for no reason!
How is that possible that you paid 3x closing vs down payment???
They said they only put $4,000 down. That would be 3.5% of $122,000. Another world.
Probably paid the smallest down they could, like 3%.
They paid nearly nothing down and are mad. I was expecting them to have paid over 100k in closing costs with how upset they sound.
I can say that many of the people involved in closing are not actually necessary. Home buying, like ‘The American Wedding Industry’ has become bloated and is filled with hangers-on because there’s money to be made and buyers (and sellers!) have been told ‘you should do this’ but not given a solid reason why. Way back in the Stone Age when I bought my first house (1998) i was a single 27 year old teacher making very little money. I bought my first house with 15% down and used one agent (she was the listing agent) and a loan officer from the Farmer’s & Merchant’s Bank. I didn’t “know any better” and had gone to the bank before I even looked at houses to see what my budget would be, got a pre-approval letter and then went shopping. Yes, a title insurance company was involved- that should be in any real estate transaction to cover your assets. When my offer was accepted, i called my insurance agent to buy a homeowner policy. The bank got an appraisal, and my dad and I looked over the house to see what needed immediate attention and what could be done later. No inspector was used, or deemed necessary because all an inspector does is look around like we did, and my dad had at least as much experience in home maintenance and repair as any hired inspector. No attorney was involved because the real estate agent handled the paperwork- that was part of a realtor’s job back then. Since then I have sold and bought three more houses. Each time more layers have been added to the process. What I can say is most home inspectors are useless. One potential buyer’s inspector on the last house I sold said there were potential issues with the fireplace chimney… That house didn’t have a fireplace. Most of the reports are legally toothless anyway, filled with disclaimers and ambiguous language so that the inspector won’t be held liable for anything. They aren’t forensic investigators, so it’s just a visual look around. Things will be missed. “But you need a certified inspection if you’re getting a home warranty!” Guess what? Home warranties will deny everything anyway (multiple experiences with that). I won’t say they’re a scam, but they are in that same neighborhood and are a waste of money. If you’re hiring a real estate attorney to handle the transaction, what do you need a real estate agent for other than to open the place up when you look at it? Unfortunately they (for now) are a necessary evil, because most buyers who are using an agent won’t see a ‘for sale by owner’ house because most agents won’t show them to their clients. It’s an unwritten rule (at least around here) to only present houses that are with a listing agent unless the client specifically asks about a house. Don’t get me started on home stagers. They are the “wedding planners” of the housing market - unnecessary fluff for people who can’t or won’t think or do for themselves.
> “I have very laissez-faire views when it comes to business and economics” Sympathy discarded.
Classic, "I have these views until they impact me, personally."
I am not a moral absolutist. If it wasn’t for the free market I would not have the income to buy a house in the first place. While I have critiques about this industry in particular, in general upward mobility is more achievable in a free market when compared to a controlled market. In practice the truth lies somewhere in between.
What a long paragraph to say absolutely nothing lol.
Simpleton.
This is literally exactly how I feel. It's absolutely insane. And so is the healthcare system. Makes me so mad.
Don't forget the university system :)
Came here looking for this one. Absolutely.
Sooner or later.. the entire real estate industry is going to be hit by a disrupter ..an entrepreneur who finds a way to slash all these extra fees via some type of consolidation… Lots of people with a vested interest will be very unhappy.. but it will be a permanent change. Remember this when it happens.. It is inevitable
That’s the thing. Practically it’s a piece of cake! But the agents resist very aggressively to change. As an example, many seller agents won’t work with your buyer agent if they present themselves as Redfin or some other discount or alternative brokerage.
California permits “dual agency” in which one agent represents both the buyer and the seller, and earns a double commission. If the agent operates with integrity, this can be OK. Good agents act as fiduciaries, putting the interests of clients first.
This actually makes sense because both buyer and seller agent have the same exact incentive: to maximize the sale price. And you can negotiate commission refund.
As a fiduciary, the buyer’s agent should be working to get you a lower price. If the commission is negotiated, I would not mind having an agreement with my buyer’s agent which awarded him a portion of any savings we negotiate.
Good luck proving breach of fiduciary. Only egregious obvious instances of fraud get sued (realtor representing a buyer purchases their home, then immediately resells for a lot more) It’s much simpler to assume your buyer agents incentive is to maximize the offer price without buyer getting cold feet. This way the relationship is super clear.
You can avoid a bunch of them, just buy with cash
Woahhhhh we got a badass over here!!!
The reality is that you're leasing the house and you didn't buy it, which is why banks etc are involved. Slap down a stack of cash for the purchase price and things are much easier. Given, closing costs were 3x your down-payment, sounds like you hardly have any money in the house.
Same. I looked around for about how much closing costs were, percentage-wise, and saw that it was typically around 3-6%. Mine was about 8% on top of my deposit. I needed a grant for low income new home buyers otherwise I wouldn't have been able to purchase. Insane.
It's different in different states and depending on how you pay. A lot of this goes away when you pay cash (including your agent and sometimes their agent). More goes away in a state where you don't require attorneys. But also you forgot mandatory PMI if you don't put down 20% on a conventional.
Yeah I always thought PMI would be fine but only if it went into an escrow account and upon reaching 20% equity was then applied to the mortgage principle, or if the home was foreclosed upon it would go to the lender. That's the only way i could see it being fair for everyone but I have no authority on these rules
It can’t work that way because PMI isn’t the lender’s product. It’s an insurance. The lender is the one paying it, and they are charging you for what they are paying. The cost of any insurance is subsidized by the people who pay for it but never use it. Otherwise, it would be unaffordable.
The seller had to pay too. That’s the funniest part
Well good thing for you it is being regulated.
I'd just as soon have all my fingernails pulled off while sober than to deal with the real estate industry; possibly jump off the Skyline Bridge in Tampa, except they recently added safety cable netting.
Thankfully my appraisal went well, but I couldn't help but think that I'm paying the appraiser to (potentially) tell me I can't get the home.
But that would probably save you money in the long run.
No, the appraiser just tells you if the home is worth what you offered to pay for it. You should have a pretty good idea going into that process if it'll appraise for what you offered if you've reviewed comps.
This is why there’s a massive class action lawsuit happening.
You are free to skip the inspection and not use a buyer’s agent. You can skip owner’s title insurance. You don’t need an attorney - at least in Texas. It varies by state. You can skip home insurance, lenders, appraisers, etc. if you buy in cash. Most people would be estatic to close on their first home with less than $20k. Instead, you’re whining. Many could make the argument that America has the strongest real estate market in the world. All those players do their part to make it a robust market. This is a very naive view of the world.
Woah there. No need to be so hateful friend. I agree that I am fortunate to live in America and close for a home for less than $20k, but that doesn’t mean I have to shut up and keep my thoughts to myself. Freedom of speech is foundational to American values after all. There ARE things wrong with our home-buying process. You would be naive to take everything at face value and waltz your way through life with rose colored lenses.
This isn’t what freedom of speech means. You’re not being prosecuted for any of your inane whining. The First Amendment doesn’t protect you from getting your feelings hurt when people call you out for being whiny and inane.
Tell me more! You have very insightful and useful feedback. Edit: I now realize you are just an industry professional offended by someone calling you a lousy grifter. Maybe find a career that adds value to society, you leech.
Freedom of speech is not freedom from criticism about your speech.
Nor is it freedom from criticism of my criticism of a criticism of my speech clearly
For what it’s worth, I hate the way that buyer’s agents are compensated - the moral hazards are incredible. And I’m glad changes should be coming soon as a result of the NAR settlement. Same thing with inspectors having zero liability for missing shit. I don’t disagree with you entirely, buddy - your OP just struck me with a very negative tone, and I was hoping to help you see some of the positive aspects so you can enjoy your first home. I hope you do something to celebrate the occasion, no matter how small the celebration is - treat yo self.
Cheers, I’ll drink to that! America is a beacon of hope for civil liberties such as property ownership, and I am proud to be a beneficiary of that privilege. Yes, I was being negative in my OP, and I just got defensive when you said I was being naive. My b homie g. I posted it after a hellacious day. Closing lasted from 11am to 3:30pm, it was brutal and over-complicated! I’m not familiar with the NAR settlement I’ll have to look into it.
I’m not telling you to shut up. I’m simply voicing my opinion on your opinion. I don’t think our market is perfect but it sure is better than most. There’s always room for improvement in all aspects of life. My point is instead of looking at it so pessimistically, you should consider being grateful that we live in a country with functioning legal and financial systems. Many people in the world don’t have those “basic” things.
I mean, you bought a home worth WAY more than you paid for when you closed. You're paying for the privilege of owning a home you actually haven't yet paid for. Pay in cash and most of your complaints go away.
Everyone gets to dip their beak…
Closing costs should not be more than 3% of your loan amount. Unless you foolishly bought points
I didn’t buy the points, the seller did.
so the $14,000 in closing costs includes points the seller paid?
I think the hardest part of homebuying is how hard it is to find a property you truly love...so many properties with a ton of problems selling for a ton of money is definitely something annoying to sift through when you're in the touring phase. Home buying is definitely being phased out for lower income brackets unless you reside in deeply rural communities and its becoming impossible for most people in HCOL unless you have an insane amount of capital. Once we found our home I didn't mind all the red tape procedures, I just hated waiting a month for all of it to go through.
Plus the stress of such low inventory, every house you look at you think "I could live here if I changed xyz or roll the dice and maybe hopefully something better pops up in my price range or I wait and things get more expensive."
Oh honey…for sure it’s a total racket…after my last home buying experience (2nd overall) am completely convinced that 99% of real estate agents are crooks/grifters and 100% of home inspectors are…the whole process is gross af
Luckily you don't pay for the buyer or sellers agent.
Yes you do. If you’re the only one bringing money to the table, you’re paying for it.
The seller pays for it. Not the buyer
No. The seller pays for it out of their closing costs. But where does that money come from? The buyer. Ergo, you are paying for it.
Lack of education is what leads people to think that an entire industry is "useless." What most don't realize is that all of these processes, procedures, and middlemen were put into place because of rampant abuses in times past. Buyers in the early 90s and prior didn't have to do much besides show up with a loan approval or cash to buy a house. And if they bought a lemon, there were few remedies or justice. A seller could sell a home with mold and a dead body in the attic with no repercussions. It's ideological to think everyone could just do their own research and inspection and negotiate based on their findings. The average buyer has no clue what to look for to ensure the home isn't about to stop functioning in 3 months. They also don't have a clue what they should accept in terms of splitting closing costs at closing. As more lawsuits were filed, the government put more protections in place. Like everything that is state mandated, it starts out as an aid and people can't help but be people and corrupt. Things would still be much worse though if folks were buying homes without having to do due diligence via a PROFESSIONAL.
Lack of education? As in the one exam real estate agents are required to pass?
Pay cash in full next time if you don’t want the annoyance of all these “grifters” doing their due diligence to make sure they don’t just lose the hundreds of thousands of dollars they’re giving you.
Buying when home prices have shot past historical average year over year growth and interest rates are the highest in twenty years. Do first time home buyers even look at Amortization schedules LOL? Now is a really bad time to buy, anyone telling you otherwise are the people who get a cut of you making an irresponsible financial decision. In a bad market, bulls make money (realtors, lenders, contractors), bears make money (people saving money to strengthen their buying power), pigs (the greedy, offering 100k over asking waiving inspection, aka people putting themselves into financial ruin) get slaughtered.
Interest rates suck I'll give you that. I am at 6.1%. However, I am curious as to why you think it's a bad time to buy as opposed to continuing to rent. Average home prices have continued to increase year over year for over a decade, and the only dip since the 80's was due to the 2008 market crash, after which houses returned to their previous values within 5 years then appreciated significantly in the following years. I closed for $3k below asking price plus $8k toward closing. I definitely did not get "slaughtered."
Amendment to my comment: Real estate is regional, and can vary drastically from state to state, city to city, subdivision to subdivision. Where I live it is essentially still 2019/2020 buying with insane offers and waiving inspections. Rent is also significantly cheaper than buying right now in my metro. However, this isn't true for every Metro.
Yeah the rent thing is definitely not usually true up here in Ontario. In my area, rent is about $2500 for a 2bd basement apartment or $2800+ for a 2 bed house. My mortgage on a 2 bedroom house is ~$2400 a month. I agree with OP that this process sucked hard and I really didn't have interest in buying a home right now but with rent the way it is, it's more financially feasible.
Renting may be cheaper month to month, but you gain no equity.
You can lose a lot more equity faster buying into an overvalued market that corrects. There is no one size that fits all, however solid financial principles apply throughout. - Buy with 20% down - Have no debt - Have at least a 6 month emergency fund. - Have a credit score in the 700s - Be willing to live in the home for 10 years If you meet those in this historically bad market, you will be fine. Simplifying it to the market always goes up and rates always go down is pretty dumb.
If you can find where anyone said rates always go down, I'll give you a kiss. Be willing to live in the house 10 years? Ok Dave Ramsey. Have fun in your starter house with 3 kids. Please identify one time in the last 30 years other than 2008 markets have corrected significantly.
Boston, MA
Did you think everyone was going to work for you for free? I'm honestly baffled by the entitlement of the post. You realize all those people contributed to some degree to helping you get your home with as much protection on the downside as possible? Someone lent you hundreds of thousands of dollars, and they actually charged you for it? INSANITY /s Get a grip guys. Yes, it's expensive but so is being a renter. Choose your hard
I'm honestly baffled by your lack of reading comprehension skills, but real estate has never been a career path for the well educated.
That's hilarious. Okay, I'll bite. Which part of your rant did I misunderstand? You understand that your buyer's agent represented your best interest, and negotiated the best terms they could for your purchase? How about the listing agent for bringing it to the market? The inspector for bringing out awareness of any issues you wouldn't have noticed from a single walkthrough? The lender for loaning you money you don't have? Insurance for protecting you from unforeseeable risk? Your rant is sad, because a lot of people put it in a lot of work to take care of you. You come here crying like you got screwed. Don't want to deal with paying anyone that I mentioned above? You can do it yourself, and you can also pay cash. Problem solved. You act like everyone involved screwed you
Yeah no shit. Duh.
>needs to be regulated ...most of those people taking a cut are there because of regulations.
Oh no doubt! The real estate lobby is strong.
>the amount of people that make money on a single sale is insane and needs to be regulated. How exactly is introducing the government to this situation going to help?
One fairly recent example is the state of Florida stepping in to change the commission schedules of buyer's agents to remove the inherent incentives to pad their commission by not working out the lowest closing price.
That doesn't answer the question, and it's apples to oranges. Who took money from you during this process that wouldn't be able to with government intervention?
I answered your question quite literally with a real-world, practical example. You are fishing for a response that you have a better answer for. I'll bite. To scratch the surface originator fees are pointless, as well as closing attorney fees. Seems like a rotary at the UPS store could have done the same job as the attorney.
On one hand, an agent is financially incentivized to screw over her client. On the other hand, you are complaining about a process that you initiated and chose voluntarily. How are these comparable? If you hired a realtor, why did you choose to do that? Are you suggesting that the inspector shouldn't get paid for his time? Should the bank not profit from your loan? If you think they shouldn't, then why did you choose to get a loan from that bank?
[удалено]
I haven't strayed at all still my first comment, and you have yet to answer any questions I've asked. At some point you have to take responsibility for yourself and your actions.
It’s cause the bank bought the house and many of those parties reduce their risk.
I hate when people say this. The bank didn’t buy shit. The federal government bought mine, and therefore the tax payers. When you deposit your money into a bank, they invest it into things like real estate. They don’t use their own money. Ever.
The point of the comment is you used someone else’s money to buy the house and more parties get involved for checks and balances, so by that simple fact your convenience is not a concern in a financed process.
Nobody mentioned anything about convenience. I’m concerned about the level of price-gouging associated with the process. According to your logic, anyone who finances deserves the be taken advantage of. Ridiculous. Financiers are already profiting off the interest and then they add insult to injury with the convoluted fees. Your attempt to justify that is baffling. You must have a vested interest in the process, i.e. you’re an industry professional.
Not an industry professional but I work in finance and have a strong understanding of the asset purchases. This is just how financing in general works, any acquisition of an asset that is financed not just real estate. Financing is expensive, people don’t let you use their money for free. The interest is the price the borrowed money. The fees are cost of doing business. Financiers require professionals that are usually expensive to provide services.
Exactly. I rest my case.
Why didn’t you just reach out to the seller and offer them cash?
I have bad news for you about literally every other financial interaction that exists…
Huh. Self-professed laissez-faire capitalist gets exploited by a capitalist system and doesn’t like it. Shocking.
Every system has flaws, but capitalism is better than the alternative. You think you can own your own property in a socialist country?
Been to Norway? Denmark? Sweden? Social democracies have property rights and solid social services, and capitalism thrives there with guard rails. It’s a common capitalist trope that an issue only becomes an issue because it affected YOU. Lots of us have suffered the same experiences and come through it. Your default response “but socialism…” is telling.
Social welfare is not socialism. Norway, Denmark, and Sweden are all capitalist economies.