Initial offer on SWFL house?

[Purseval]

I never rely on wikpedia quotes for ANYTHING, go to your own county web site for info, wikpedia isn't reliable because anyone can post anything they want there and then its a "fact"...don't think so

Every one of those facts was footnoted to the reports they came from, including the county website. That is why I included the link, so he can go there himself and feel free to dispute any part of it.

Wikipedia is a great source for generic topics like county facts, how to solve a quadratic equation, how a V8 engine works, etc. If you want info on political or other hot button issues like global warming then it's pretty much worthless.

 

[dvcgirl]

This might be true in SOME parts of FL, but other parts truly have nothing structural wrong with their economy. I do agree with Dave Ramsey about that part.

Well, I'd argue that the entire US economy is in the beginning phases of a major structural change. The very bright guys at PIMCO, the largest bond house in the country, call this "the new normal"....where we're going to see a very long period of sustained high unemployment (we're going to see the unemployment numbers go up from here)....and much lower growth than we're used to seeing in this country. In the short term, there is mounting evidence that we may enter into a deflationary period.

I like to think of it as the great downsizing of the American lifestyle.

 

[punkin]

Well, I'd argue that the entire US economy is in the beginning phases of a major structural change. The very bright guys at PIMCO, the largest bond house in the country, call this "the new normal"....where we're going to see a very long period of sustained high unemployment (we're going to see the unemployment numbers go up from here)....and much lower growth than we're used to seeing in this country. In the short term, there is mounting evidence that we may enter into a deflationary period.

I like to think of it as the great downsizing of the American lifestyle.

Hello fellow pessimist.

I think we are well into it. I think the beginning was about 2 years ago. This one is going to be a long haul depression/recession (whatever you want to call it). It will not be getting better any time soon...and looking at my crystal ball (which is a good as anyone else's) I see most of Florida's real estate marker bottoming out somewhere about 2030 or so.

 

[Luvchefmic]

Every one of those facts was footnoted to the reports they came from, including the county website. That is why I included the link, so he can go there himself and feel free to dispute any part of it.

Wikipedia is a great source for generic topics like county facts, how to solve a quadratic equation, how a V8 engine works, etc. If you want info on political or other hot button issues like global warming then it's pretty much worthless.

I stand corrected..thank you for clarification....learn something every day

 

[rockydek]

We do have a realtor and she seems very competent and knowledgeable. However, she is the listing agent on the property we like the most. Therefore, she is representing both buyer and seller which seems a bit awkward and muddies the situation we're in. We can put 20% down and do a conventional loan. We have an 800 on credit. We don't have a current mortgage as our home up north is paid for in full. This would be a second, retirement home for us. Any other thoughts? TIA!

I am pretty sure ...If she is the listing broker..She is representing the seller.
Not the buyer...Her commission will be affected by a lower offer and may be discouraged by her. Insist on making it anyway. Good Luck!

 

[dvcgirl]

Hello fellow pessimist.

I think we are well into it. I think the beginning was about 2 years ago. This one is going to be a long haul depression/recession (whatever you want to call it). It will not be getting better any time soon...and looking at my crystal ball (which is a good as anyone else's) I see most of Florida's real estate marker bottoming out somewhere about 2030 or so.

Well, 3 years ago was when we saw the first shocks....in July of 2007, when Bear Stearns (remember them?) disclosed that two of their sub-prime mortgage hedge funds had lost nearly all of their value. That's when my ears perked up. The market dropped big time that August....and then "happy days were here again".....and the market recovered hitting new highs in October of 2007. DH and I were still really, really nervous with what we were reading. And so we went to all cash options in our investments in November of 2007.

We figured we'd be out of mutual funds for a few months....we ended up staying on the sidelines until late January of 2009....missing the big drop. We missed the bottom, but are still sitting on a 40% gain from our entry point....and now there's just far too much downside risk in the stock market for my comfort level. Time to sit on the sidelines for awhile.

Remember, in 1929 the market crashed and then rallied back 50% in the next year. Then it fell 80% and that's when The Great Depression began. The market almost always gives you a chance to get out. And think that's what we're seeing now.

Housing normally leads us out of recessions, and that sure is heck ain't happening. Consumers are tapped out, and with the "D" word (deflation) uttered with increasing frequency, people will begin putting off large purchases. Why buy today when you can buy it cheaper tomorrow, or next week...or next year. Why hire a new employee today when you can hire one for far less next year? And why hire at all in this environment when you have no idea what the tax structure will be in six months....there's too much uncertainty. It's far safer to sit on cash, and that's what fortune 500 companies are doing right now.

The Fed is obviously spooked....trying to turn sentiment with their new announcement that they're planning buying treasuries as the mortgage debt they own rolls over. Retail numbers just released suck. If this was a cyclical event, we'd be well on our way to recovery. We're not.

 

[Muushka]

Well, 3 years ago was when we saw the first shocks....in July of 2007, when Bear Stearns (remember them?) disclosed that two of their sub-prime mortgage hedge funds had lost nearly all of their value. That's when my ears perked up. The market dropped big time that August....and then "happy days were here again".....and the market recovered hitting new highs in October of 2007. DH and I were still really, really nervous with what we were reading. And so we went to all cash options in our investments in November of 2007.

We figured we'd be out of mutual funds for a few months....we ended up staying on the sidelines until late January of 2009....missing the big drop. We missed the bottom, but are still sitting on a 40% gain from our entry point....and now there's just far too much downside risk in the stock market for my comfort level. Time to sit on the sidelines for awhile.

Remember, in 1929 the market crashed and then rallied back 50% in the next year. Then it fell 80% and that's when The Great Depression began. The market almost always gives you a chance to get out. And think that's what we're seeing now.

Housing normally leads us out of recessions, and that sure is heck ain't happening. Consumers are tapped out, and with the "D" word (deflation) uttered with increasing frequency, people will begin putting off large purchases. Why buy today when you can buy it cheaper tomorrow, or next week...or next year. Why hire a new employee today when you can hire one for far less next year? And why hire at all in this environment when you have no idea what the tax structure will be in six months....there's too much uncertainty. It's far safer to sit on cash, and that's what fortune 500 companies are doing right now.

The Fed is obviously spooked....trying to turn sentiment with their new announcement that they're planning buying treasuries as the mortgage debt they own rolls over. Retail numbers just released suck. If this was a cyclical event, we'd be well on our way to recovery. We're not.

Wow DVCgirl, I like your style! My husband is someone who stays in the stock market because he is in it for the 'long haul' fearing missing a gain when getting out of a shaky market. I, on the other hand, have no problem pulling out my stuff when things look strange. Sadly, I didn't do it back in 9/08 like I really wanted to. So I pulled out a little while ago, and anticipate a big drop again soon. Then I will get back in.

I agree, we are a very long way away from recovery, even though they tell us it is the 'summer of recovery'.

 

[punkin]

It is definitely fundamental and not cyclical. Anyone who says differently is probably trying to sell you something.

 

[dvcgirl]

Wow DVCgirl, I like your style! My husband is someone who stays in the stock market because he is in it for the 'long haul' fearing missing a gain when getting out of a shaky market. I, on the other hand, have no problem pulling out my stuff when things look strange. Sadly, I didn't do it back in 9/08 like I really wanted to. So I pulled out a little while ago, and anticipate a big drop again soon. Then I will get back in.

I agree, we are a very long way away from recovery, even though they tell us it is the 'summer of recovery'.

We used to be just like your husband....we never got out of the market like we did in early November of 2007. I actually posted about it on this board...either the day we got out, or the day after. November 6th, 2007. I was really freaked out by just about everything I was reading that entire summer. And so when the market hit that 14K mark, we got out the next week.

I've been a classic dollar cost average investor for 20 years....starting in 1990. Kept right on doing so through the few minor recessions I've seen in my working/investing lifetime. It all worked out just fine, even with the tech crash in the last 90s/early 2000s. But this time is really different.

When the market tanked from 14,100 in late 2007 down to the high 7,000s in early 2009....we got back in, counting on a bounce off the bottom. Well, we got in too soon, rode it down to the bottom, but have indeed seen that bounce we were hoping for. But for the past couple of weeks everything I'm hearing and reading leads me to think that there's very little upside potential in this market right now....and far too much downside risk.

I hate the idea of seeing no return for the next year or so, but I hate the idea of losing a good deal of everything we've worked for the past 20 years. Honestly, in the best of circumstances, I think the markets will be flat a year from now. I'm just hoping that we get clear signals one way or another about how this thing is going..... In the meantime, we'll be piling up cash and watching from the sidelines. "Buy and hold" is really risky these days.

 

[LoveBWVVBR]

We used to be just like your husband....we never got out of the market like we did in early November of 2007. I actually posted about it on this board...either the day we got out, or the day after. November 6th, 2007. I was really freaked out by just about everything I was reading that entire summer. And so when the market hit that 14K mark, we got out the next week.

I've been a classic dollar cost average investor for 20 years....starting in 1990. Kept right on doing so through the few minor recessions I've seen in my working/investing lifetime. It all worked out just fine, even with the tech crash in the last 90s/early 2000s. But this time is really different.

When the market tanked from 14,100 in late 2007 down to the high 7,000s in early 2009....we got back in, counting on a bounce off the bottom. Well, we got in too soon, rode it down to the bottom, but have indeed seen that bounce we were hoping for. But for the past couple of weeks everything I'm hearing and reading leads me to think that there's very little upside potential in this market right now....and far too much downside risk.

I hate the idea of seeing no return for the next year or so, but I hate the idea of losing a good deal of everything we've worked for the past 20 years. Honestly, in the best of circumstances, I think the markets will be flat a year from now. I'm just hoping that we get clear signals one way or another about how this thing is going..... In the meantime, we'll be piling up cash and watching from the sidelines. "Buy and hold" is really risky these days.

If the money is for retirement and retirement is decades off (as it is for us), buy and hold makes sense. I would only take my money in and out of the market if retirement was fast approaching.

 

[acomasdiaz]

Thanks to all for posting your various points of view. It looks like we had a bit of disagreement, but I kind of expected us to be all over the board on this topic. I just appreciated your thoughts a whole lot.

We put in a very lowball (according to our real estate agent) on the house this morning. She didn't say it was an insult to the owners, but it must've bordered on being insulting from what we could detect in her body language and spoken words. She asked if we would be willing to negotiate should they refuse our offer, and we said we would think about possibly negotiating but offered no specific range. Our initial offer was 20% less than the asking price with basically no contingencies other than it came turnkey furnished.

The offer expires late on Tuesday afternoon. She felt they should have a bit of extra time since it's the weekend and they're overseas owners.

No, we haven't explored homeowners' insurance yet but she suggested using an insurance broker to find the best deal out there when/if the time comes if we ever reach agreement with the owners of the house. We realize it's very expensive and a huge portion of the mortgage payment. I guess that comes with the territory down here so we're prepared for sticker shock.

I would love to know if the offer was taken...

 

[dvcgirl]

If the money is for retirement and retirement is decades off (as it is for us), buy and hold makes sense. I would only take my money in and out of the market if retirement was fast approaching.

Normally, if we were witnessing just another cyclical event in the economy, I'd agree completely with you. Like I said, we held on in the market right on through the tech crash. But we've got some very serious threats on the horizon. And the possibility of deflation is enough for me to pull my money out and watch for awhile. Everyone thinks it can't happen here....in such a developed economy. We learned our lesson from the 1930s. But we only have to look at a chart of the Japanese stock market to see that it can indeed happen in a very developed economy in our time. Japan has now had two "lost decades".....20 years of deflation. Their market peaked at nearly 40,000 and twenty years later it is trading around 9,000.

All of the latest data show us that the economy is stalling. And that's if you even believe that we've had a recovery to begin with....many don't. The "non-recovery recovery". The longer the economy stalls, or even worse...if we fall back into recession.....the greater the risk of deflation beginning. Once it starts, it's very hard to stop it. We're sort of discussing it in this thread.....waiting to buy a house because you don't believe the market has bottomed. Why buy today when you can get it cheaper tomorrow. Imagine that phenomenon spilling over into all markets, for all goods and services. Inventories pile up, people hoard cash and stop spending. And the stock market plummets.

I hope that it doesn't happen, I really do. It would be devastating for our country. But I'm willing to sit on the sidelines and watch, giving up return on our investments in the short term since we got out high and bought close enough to the recent bottom to see a 40% return in just over 18 months. The recovery is so weak that I don't think we'll miss a big pop in the market by waiting this year to see how things will unfold.

 

[FoggyToad]

I would love to know if the offer was taken...

Hi there! Finally I'm back and can give a progress report.

I don't think they were as insulted by our offer as the real estate agent was because they replied on Monday with a counter offer. They lowered their asking price by $20k. They asked for a couple items from the home that had sentimental value and they were willing to pay all closing costs.

That left us still $29k apart on the asking price for the house. We decided to make one final offer and then would stand firm but didn't reveal that part to the agent. We upped our offer by $9k which we thought was fair (maybe too fair in retrospect?)

They countered again and this time lowered their asking price another $14k but asked us to pay all closing costs. Nope, we couldn't agree to that.

We held our ground and sent back a counter with the same $$$$ offer as we submitted earlier and put the closing costs back in their column.

We received a phone call on Friday from the agent saying our offer was accepted without any more changes. It appears we have a house if everything goes as planned with home inspections, title searches, and closing.

 

[Purseval]

Congratulations and best of luck with your new home.

 

[LoveBWVVBR]

Hi there! Finally I'm back and can give a progress report.

I don't think they were as insulted by our offer as the real estate agent was because they replied on Monday with a counter offer. They lowered their asking price by $20k. They asked for a couple items from the home that had sentimental value and they were willing to pay all closing costs.

That left us still $29k apart on the asking price for the house. We decided to make one final offer and then would stand firm but didn't reveal that part to the agent. We upped our offer by $9k which we thought was fair (maybe too fair in retrospect?)

They countered again and this time lowered their asking price another $14k but asked us to pay all closing costs. Nope, we couldn't agree to that.

We held our ground and sent back a counter with the same $$$$ offer as we submitted earlier and put the closing costs back in their column.

We received a phone call on Friday from the agent saying our offer was accepted without any more changes. It appears we have a house if everything goes as planned with home inspections, title searches, and closing.

Congratulations! It sounds like you did a great job on negotiations! Trust me, they're just happy to have the offer and sell the house.

 

[Disneycrazymom]

We used to be just like your husband....we never got out of the market like we did in early November of 2007. I actually posted about it on this board...either the day we got out, or the day after. November 6th, 2007. I was really freaked out by just about everything I was reading that entire summer. And so when the market hit that 14K mark, we got out the next week.

I've been a classic dollar cost average investor for 20 years....starting in 1990. Kept right on doing so through the few minor recessions I've seen in my working/investing lifetime. It all worked out just fine, even with the tech crash in the last 90s/early 2000s. But this time is really different.

When the market tanked from 14,100 in late 2007 down to the high 7,000s in early 2009....we got back in, counting on a bounce off the bottom. Well, we got in too soon, rode it down to the bottom, but have indeed seen that bounce we were hoping for. But for the past couple of weeks everything I'm hearing and reading leads me to think that there's very little upside potential in this market right now....and far too much downside risk.

I hate the idea of seeing no return for the next year or so, but I hate the idea of losing a good deal of everything we've worked for the past 20 years. Honestly, in the best of circumstances, I think the markets will be flat a year from now. I'm just hoping that we get clear signals one way or another about how this thing is going..... In the meantime, we'll be piling up cash and watching from the sidelines. "Buy and hold" is really risky these days.

I think I remember that discussion in 07. I remember talking with you about how no one was paying attention to some of the reports and even the media was not saying anything. We stayed in the market at that time and did ok but this round I am ready to get out and sit on the side with you. I don't like the way the "summer of recovery" is going at all!

To the OP congratulations on your new home. I hope you have many happy days there!

 

[punkin]

Congrats on the new house. Enjoy it in good health!

 

[dvcgirl]

I think I remember that discussion in 07. I remember talking with you about how no one was paying attention to some of the reports and even the media was not saying anything. We stayed in the market at that time and did ok but this round I am ready to get out and sit on the side with you. I don't like the way the "summer of recovery" is going at all!

Well, now there's hyper-attention in the media. Back in the summer of 2007 it was still "happy days are here again". Even after the market dipped in the late summer of 2007, it hit a high in October giving us an opportunity to get back out.

The market now is very different from that time. Less troubling in some ways, more troubling in others. Our biggest fear is the threat of deflation, which several serious economists (not perma-bears) are putting at 25%....that's enough for me to want to see how this plays out. And with a 25% threat, we're talking about seriously slow growth. The housing market is heading into a double-dip now. The latest sales numbers, both existing and new, were abysmal....I mean....*really* bad. And we have those abysmal numbers in an interest environment that is the lowest *ever*. So, when exactly are people going to buy houses again? Well, when they have jobs or when their friends have jobs again....when they think this recession is finally over.

Housing has led us out of 7 of the last 8 recessions. Manufacturing was supposed to lead us out of this one, but now that is slowing as well...slowing dramatically. All of this points to really lousy GDP numbers in the coming months.

So, as an investor, I think you have to be much more nimble these days. The downside risk here is enormous compared to the upside potential. The equity market could rally initially on a big announcement from the Fed, something like a massive amount of Quanatative Easing. But then the Fed usually digests that kind of news and comes to the realization, "oh, well the Fed must think things are *really* bad if they're doing that".....and then the market comes back down. Other than that, the Fed is pretty much "out of bullets".

As for Fiscal policy, the idea of another massive stimulus bill from the Administration....just ain't gonna happen. *And*, if we see the house or senate go back to the republicans, it's really not going to happen.

Even if the market does rally 10% over the next year, I'm happy to protect our gains this past year, miss that 10% and get a good indication that we're definitely out of the woods. We made our money on the big pop from the bottom.....and we just don't want to risk losing that.

 

[acomasdiaz]

Congrats! Hope everything goes smoothly!