December 2020 – Page 2 – Majeed Ekbal's Daily Blog

Newsflash: Three Furnaces??

Posted on December 31, 2020 by Majeed Ekbal

Currently eyeing a suburban home. Have lived in a condo in the city for many years, so single family homes are new to me.Said home is 4,000 SF above grade with 1,400 below with a finished basement. Inspection revealed that there are THREE furnaces in this house. Two in the basement and one in the attic. Each services one floor of the home.This seems like overkill to me, and worries me about maintenance and repair costs. Is this normal?

Newsflash: Will inventory climb?

Posted on December 31, 2020 by Majeed Ekbal

Will inventory increase eventually?Hi, I’m a real estate idiot. Will more inventory become available in the coming years? I remember looking at houses on Zillow last year and there were tons of homes for sale in my price range, now, even going 100k more, there’s just nothing… what’s the natural eb and flow of times like this? What events normally happen for housing sales and prices to dip and availability to increase?

Newsflash: Seeking advice for renting out recently purchased house

Posted on December 31, 2020 by Majeed Ekbal

So I purchased my home last May and have been living it in since, however like many people this year, I’ve ran into some financial troubles and can no longer afford my mortgage/bills with my current salary. I think I have 6 options.Option 1: I try and rent out my house and rent another apartment nearby and become a temporary landlordOption 2: I try and find a roommate to help pay the bills.Option 3: I rent/airbnb my entire house.Option 4: I sell my houseOptions 5: I take out a small loan, finish off certain aspects of the house that would increase the value, and then sell it at a potentially higher profit.Option 6: I try and find a higher paying job.So my situation has been keeping me up at night and any advice would be greatly appreciated.Options 4 would be my last choice since I’ve really fallen in love with the property and would be sad to see it go, although I could probably make a profit. Option 2 would be tricky since I don’t like the idea of living with a stranger during Covid times, especially in that I have a newborn, but this would be the easiest option. Options 1 could also be a less complicated choice.Any thoughts? Have any of you ever had a situation like this?Also, would I have to check with my mortgage company to see if option 1 and 3 are even possible?

Newsflash: New Coronavirus megathread, place for linking good discussions.

Posted on December 31, 2020 by Majeed Ekbal

Pretty much daily there is a new post about how CV is impacting the market, and there have been some really great discussions. I thought we could try linking the best of them here, so they are easy to find.Feel free to ad others as anyone sees fit.

Newsflash: First-Time Home Buyer – Buy, Rent or Relocate?

Posted on December 31, 2020 by Majeed Ekbal

Hi everyone! Sorry for the long essay, but I was hoping to get some honest advice on whether my family should be considering to rent, buy, or move in today’s crazy housing market. 3bed/2bath townhomes and single family homes here in the San Jose, CA area are in the $900k to $1m range (insane, I know). If we buy, our focus would be to live in a decent area with good schools for our 19-month old daughter.My wife does not currently work, but will get back into the job market once COVID-19 settles down and we can get our daughter to day care. Before our daughter was born, she was making about $70k before taxes. Because of the uncertainty in today’s landscape, however, we’d feel better if we solely relied on my salary for future planning.I spoke with a lender for pre-qualification and they said that I should qualify for a $822k mortgage @ 2.5%. Not entirely sure if that includes points, however. I didn’t know what those were at the time.We are also contemplating on moving to different areas (e.g. San Diego, Houston) where there is a heavy pharmaceutical industry precence (I work in Regulatory Affairs), but all of our family and friends are here in San Jose. The abiility for our daughter to grow up around her cousins and our family/friends help raising her is a seemingly unquantifiable opportunity cost.First time home-buyers, so we are still learning. Should we Buy, Rent, or Relocate?Cash – $104k 401k – $127.4k Roth IRA – $38.4k Taxable Brokerage – $75.8k Crypto – $14.9k Custodial – $1.4k 529 – $1.4k Debt – $0 Incoming Lump Sum March 2021 (Bonus, RSU/ESPP) – $79k (estimated pre-tax)Income – $225-260k/year (depending on stock value; $155k base + $28k annual bonus)

Newsflash: [MI] How do I exclude a person from purchasing a house?

Posted on December 31, 2020 by Majeed Ekbal

My father in law passed away and we need to sell his house.A quick back-story: Neighbor has bought many of the houses in the neighborhood so we think he may try to buy this house. Neighbor is also a complete tool. He has attempted to sue my FIL on several occasions. One, for example, was because he claimed my FIL was “spying” on him, and sued him for the cost of a privacy fence. Obviously that was thrown out of court.We are VERY concerned that he will buy the house and then sue the estate for every little thing “wrong” with it. He may even create problems to sue for.Yes, we’re disclosing everything we are aware of, but we live in TN and have only visited the house.We also realize he can sue for anything, even if it’s disclosed and not a valid lawsuit, which will cost us $250/hour for the attorney to handle.And yes, the neighbor will likely attempt something like this. He’s petty, and will enjoy wasting the estates money, even if he gets none.Our realtor tells us that if the neighbor makes a full-price offer and we reject it, his realtor could go after us for their part of the sales commission.Right now, our thought is we will reject any offer from him that is not full-price, with no contingencies.But we’d really just rather not accept ANY offer.We are consulting with the attorney to check options (we will likely trespass him from the property so he can’t even do a viewing).Is there anything else we can do?

Newsflash: First time home buyer – Can someone review my estimated closing costs for any concerns?

Posted on December 31, 2020 by Majeed Ekbal

I’m sorry, I know this is a lot to ask. Location is NY (not a major city, not near NYC). I haven’t gone to look for houses yet. I am working on pre-approval. This is what I have been offered before a hard pull on my credit. I am happy with the interest rate and I am okay with having discussions with my lender, I just want to make sure I’m not going to be taken for a ride due to my inexperience. The school and property taxes are rough estimates and that is fine.The main concerns I have: “Application Fee” seems high based on some research; I don’t quite understand Aggregate Adjustment; I’m not quite clear on how $9,720.04 is the final cash from the borrower (items on that list plus two months of payments maybe? but it still doesn’t seem to add up cleanly). Can anyone ELI5? Anything raise a red flag for anyone?Loan Amount: $145,500.00, Interest Rate: 2.375%, Loan Term: 360 MONTHS, Loan Purpose: PURCHASE, Amortization Type: FIXED RATE Loan Type: CONVENTIONALSorry about wonky tablesAnticipated loan feesAmount to be paid by borrowerApplication Fee$1,095.00Appraisal Fee$580.00Credit Report Fee – single$18.13Flood Certificate Fee$7.50Mtg Electronic Registry System$12.70Tax Service Fee$80.81Homebuyer Counseling Fee$75.00Title – Doc Preparation Fee$65.00Title – Endorsement Fee$221.80Title – Lender Title Insurance$718.00Title – Search/Abstract Fee$150.00Title – Settlement Closing Fee$512.00Recording Fee For Deed$205.00Recording Fee For Mortgage$201.00Tax Stamp For County Mortgage$727.50Per Diem Interest ($9.47 per day from 2/15/21 to 3/1/21)$132.58Hazard Insurance (2 months @ $62.50 per month)$125.00County Property Taxes (2 months @ $166.67 per month)$333.34School Property Taxes (2 months @ $250.00 per month)$500.00Aggregate Adjustment$1,437.47Title – Owner Title Insurance$241.00Proposed PaymentProposed PaymentPRINCIPAL & INTEREST$565.49Hazard Insurance$62.50Mortgage Insurance$66.69County Property Taxes$166.67School Property Taxes$250.00Total Monthly Payment$1,111.35Loan SummaryLoan SummaryPurchase Price$150,000.00Estimated Prepaid Items$1,570.05Estimated Closing Costs$4,910.44Borrower Paid Discount$-260.45Total Costs$156,220.04Other CreditsOther CreditsLender Credit-$1,000.00Loan Amount-$145,500.00Cash From/To Borrower$9,720.04

Newsflash: Renting House to Adult Video Company

Posted on December 31, 2020 by Majeed Ekbal

I have a modest, 3 bedroom house. The main attraction comes from having a pool and hillside behind the house.Due to this, I have been approached by a porn company that would like to film on location. I said yes, but am now worried that it may cause problems with my neighbors, and local legal regulations. I will be watching the scenes they film, as part of our agreement, so I can promptly answer and visitors that may be wondering what is going on.Does anyone have any suggestions to mitigate any possible issues?

Newsflash: Difference between signing appointment and closing?

Posted on December 31, 2020 by Majeed Ekbal

I have bought and sold 4 houses over the years and always just signed everything at closing and got the keys there. I just got a request from my mortgage company to pick my “signing appointment” and it says it must be one business day before close of escrow on 1/15 (my planned closing date). I’m waiting to hear back from them what this is, but they’re in a different time zone so it’ll be a few hours so wanted to check if any of you are familiar. Would I get the keys at this appointment or is this something else?

Newsflash: real estate listing agent is insisting on 6% fee. we have not signed yet. is this reasonable or should we find someone else?

Posted on December 31, 2020 by Majeed Ekbal

i am in southern wisconsin in a town of about 10k people. and am helping my mother sell her home. a family friend in real estate highly recommended someone they used to sell their own parent’s home (the friend lived in another city). this real estate agent (with century 21) is insisting on 6%. we have not signed yet. a family member who is a broker in our state, and also out of town says we should not have to pay 6% and that he could have saved us a 25% referral fee. do we as a seller have to pay the buyer’s real estate commission? is that customary? the easiest thing is to just have my mother sign and let him do his thing, but i don’t want my mother to be taken advantage of. the tax assessed value of the house is 145k and two independent real estate agents set that same number as the target selling value of the house. the c21 agent is very pleasant to work with. i hesitate to get my mother in between two people she cares about who are both in real estate, but here we are. what are your thoughts?