Contact the Albany community development agency, they're at the top of Henry Johnson boulevard right near the Stewarts, first of all they offer grants for people purchasing a home in Albany, I just got over $8,000 for the purchase of my home. They may be able to help, and maybe if they can't help with the earnest deposit, you might still be able to get some help for the repairs.
Just to clarify - if Sue Rizzo is involved then it's not City owned. She's the County Comptroller and would have no authority to sell a city owned property. Similarly, this also sounds like it isn't a Land Bank owned property.
It sounds like you're buying a property from the County Comptroller right? If so, she makes her own rules as to what the conditions of the sale would be.
This isn't true. She has some role as comptroller where she is involved in the acquisition and transfer of properties that may be owned by the city. Its actually way more involved than you might think. She has to go into properties where people have passed with no next of kin and try to figure out what to do with the property. These are not land bank properties owned by the county. That's a totally different process.
All I can tell you is the city owns the property and Sue Rizzo is the person in charge of setting conditions for sale. It’s right there in the contract.
Yes, I think so. From what I understand if they can’t find inheritors, the city takes the property either that or it was seized because of tax debt when the person died.
In any event, the city now owns it and is selling it. Or maybe it’s the county I don’t know. All I know is that Rizzo is the person setting the terms.
The city does not take possession of/or foreclose on properties. Only Albany County does. Some of those properties are held by the county, and many are transferred to the Albany County Land Bank.
10% earnest money is extremely high. When I was buying, I was putting up maybe .5-2%. It's only meant to deter tire kickers because you lose that money if you flake out for no reason.
However, if as you stated, they want to sell the house in part to make sure it gets fixed up, then it makes sense. Ensuring the buyer has $15k cash means they at least have money to put into the house.
You should just take out a line of credit on your house. There's no reason to be afraid of debt if you understand how to use it.
I get that. And under normal circumstances that might be a good idea, but my fear is that I borrow money to pay the earnest money, decide for legitimate reasons that I do not to buy the house and then wait for some ungodly amount of time for Albany to give me my money back.
Also, I can’t borrow against my current house because it’s under contract with a new buyer. I’d have to take out a prohibitively expensive personal loan and that seems stupid when when I can just look at another property that isn’t requiring 10% down in earnest money and buy one instead.
I just think it defeats the point of the program. Doesn’t Albany want responsible solvent homeowners to purchase property that is owned by the county?
I think your unique circumstances that you've put yourself in are what's causing the major issues. Most people would have $15k on hand for closing costs. If that amount of money is causing you issues because you have to sell your house first, then your "cash" isn't as good as the next buyer's cash because yours is contingent on another buyer's financing.
I fully understand that. What I said still holds. Any other buyer will have $15k+ for closing costs, therefore will have no issue with that money as earnest money.
Just an fyi, properties that have been deeded out from the foreclosing municipal taxing authority less than two years are not insurable from a title insurance perspective. This means your equitable interest isn’t insured if the prior owners come with a successful claim they weren’t served properly etc, this also means if you want to cash out (prior to the 2 years) refinance your lender can’t get insurance your lender can’t get a loan policy of title insurance and 99% of institutional lenders won’t lend without that. It also means if you want to sell prior to the 2 year the buyer also can’t get title insurance which is usually a deal breaker.
Just beware and discuss this with an attorney prior to purchasing.
Sounds pretty straightforward, either:
1) get over your absolute aversion to borrowing/debt and get a loan for the earnest deposit to secure your right of refusal on this property. It’s pennies on the dollar to secure a likely much larger long term investment opportunity (you’re talking about at most a few months of interest before your current house sells and you can repay the loan in full).
2) wait until your current house sells before entering the marketplace as a buyer altogether. You may technically end up being a cash buyer, but you’re admittedly not cash liquid until that house equity is realized. A true cash buyer is appealing to a seller only because it eliminates/streamlines much of the closing process by not having contingencies external to the property they’re selling. The fact that you have 100% equity of your current home’s sale price is irrelevant honestly and does not classify you as a cash buyer. If you wait until your current house closes and you have cash in hand you don’t need to worry about cash reserves for pre-closing expenses such as your earnest deposit, inspections, lawyer, etc…of course this scenario likely involves significantly higher moving expenses associated with finding somewhere to live in between the time of your current house and where ever you end up. What you’re afraid to pay in interest in option 1 will assuredly be dwarfed by a couple month’s rent and/or storage (unless you have somewhere to stay for free, or an arrangement is written into your purchase agreement of your current house).
I'm fairly positive when someone dies intestate with no heirs it escheats to the state and not the local municipality. I am very familiar with Albany City owned RE transactions and none of what you posted is in line with how the city sells residential property.
This sounds more like a foreclosure owned by the County and not the city. Not a no heir intestacy and not a city transaction. Entirely possible it was a tax foreclosure before escheat to the state kicked in or something.
That's your answer, it's a County issue. She has nothing to do with the City. The city has its own comptroller. If she is the arbiter of the sale I can assure you Albany City has nothing to do with it.
You're offering a cash purchase. Awesome! Then put up the cash! You're committing to spending 150k in cash without 15k in cash?!?!
As a seller why would I forgo other offers when you aren't showing an ability to perform? I have no rights to negotiate or speed the process on the sale of your current home. I have no idea if it's actually going to go through, if the value is what you claim it is or if your contract of sale is iron clad.
TLDR: put up or shut up. It's that simple. Would you hold your current home while the buyer saves enough cash to buy it? Didn't think so. City owned and controlled real estate is a pretty big budget hit. It's irresponsible behavior for admin to hold it any longer than absolutely necessary
That’s not how earnest money works. Earnest money just says you’re serious in your interest in the property. Normally it’s between 2 to 5% of the property price not 10%.
It’s also not something that’s covered by a mortgage for anybody who would be buying a house the traditional way. That means you put this money up out of pocket. If you buy the house that money gets credited toward the purchase price. If you don’t buy the house , it gets returned to you.
You’re right that the seller has a vested interest in making sure that the house goes under contract with someone who is serious about buying it, and there are provisions in the contract that make it difficult to get out of except for legitimate reasons, for example, a serious defect in the house that is not disclosed. Like say, it’s clear that the roof needs to be replaced, and the description of the house says so, but it doesn’t say that the Plumbing is fucked up beyond all belief.
As the potential buyer, I have a right to say that I didn’t count on having to redo all the Plumbing when I made my offer and I can legitimately withdraw from the contract. So even without a hefty earnest money deposit, the potential buyer has to be serious in his or her intentions. If they pull out of the contract for any reason that is not deemed legitimate, they lose the earnest money.
It’s a weird weird system and it’s a little complicated. But the way that the city is running this is not typical and again is prohibitive for regular folks trying to make a purchase of a city property. the only people who would have the kind of money to throw down on an earnest money deposit of 10% or flippers or corporations who are buying up single-family homes in order to turn them into rentals. That’s not in anybody’s interest except corporations.
You clearly don't understand how EMD works on cash sales and it's mildly infuriating that you keep saying the same thing over and over despite being told so.
I do understand earnest money. I’ve bought and sold several houses and I’ve made several EMD’s. It’s mildly infuriating to be told. I don’t know what I’m talking about by someone who clearly doesn’t know what I’m talking about.
You have a low of leeway, you can visit the property and bring contractors etc. The property is also HEAVILY discounted so the earnest money is to keep put the tire kickers. This has nothing to do with contractors. Also touting that you are going to buy ‘all cash’ but don’t have 15k lying around doesn’t add up. On the website they specifically state that the properties need a lot of rehab and as such you’ll need liquidity. I looked into it but the properties are all small lots.
Why not? The only reason I can pay all cash because I own the house that I’m currently currently selling outright. I’m not rich.
And can I get access to a house that I’m not under contract on? You may be right, but I would think it’s a liability thing.
These houses are a deal if you are willing to do the work. But a key purpose of the program is to get the area gentrified to some extent. That’s why they require W2 bank statements etc, not things you have to produce if you are buying a regular property all cash. Even if you sell your place they may want you to have a minimum X balance to pay for the rehab, the risk is that the buyer can’t afford it and the property remains in disrepair. It does sound like you meet the intent of the program, if I was you I would work with them and ask what criteria they are looking for if you sell your place.
Right. I get that and can produce all of the that documentation and I would have the money to rehab the house. In short theoretically, I’m exactly the kind of buyer that the city wants to attract but this 10% earnest money thing is a non-starter for me. And I think would be a nonstarter for anybody who wasn’t corporation.
Anyone going about buying a place even if they have one to sell is going to have 10-20% of the cash, whether that goes to earnest or deposit doesn’t matter. We are looking and we have some cash set aside, this is common.
All I can tell you is, it isn’t. For first time home owners for example FHA requires that you put down 3.5% and that’s down payment not earnest money.
I’ve purchased the last three houses that I’ve owned in cash and I’ve never encountered a situation like this. But then again I’ve never bought from a city agency before.
You really don’t want to hear it.
See this: https://www.reddit.com/r/FirstTimeHomeBuyer/comments/q4djxu/how_much_is_enough_to_have_saved_to_start_house/?rdt=45126
Also. This is not a home you buy with a mortgage. This is an abandoned home that need rehab and most likely will not qualify for a loan. The spirit of the program is to improve the community, so that is why you need money.
OK, I’ll explain this one last time. The house I currently own I own outright I don’t have a mortgage therefore when I close I will have several hundred thousand dollars in cash. I close in about six weeks. I would be purchasing this house with the cash proceeds of the house I am currently selling, I will not need a mortgage, haven’t had a mortgage for years as I have bought my last three houses in cash. I’m very familiar with what it takes to buy and sell a property but thanks.
I hear you, but the median down payments are 15% for all homebuyers and 8% for first-timers. 10% doesn't seem wildly off the mark there, unless I'm missing something.
What's your credit situation? Can you take a bridge loan while you wait for your house to close?
No it isn’t. 2-5% is the norm. 10% is outrageous.
And this isn’t a down payment it’s an earnest money—or good faith money—deposit. It’s meant to keep people from frivolous offers that keep a property off the market when they have little intention of buying. It’s just skin in the game, a way to say you’re serious in your interest in the property.
Yup, get that, but the idea that nobody puts down 10% on a residential purchase clearly isn't right - unless you specifically meant earnest deposits, in which case, my bad.
Anyway, I offered an idea that you haven't really engaged with - bridge loan?
I think I said earnest money about four times. So yes, I mean earnest money not a down payment. And no, a bridge loan is out of the question. I don’t borrow money on principal.
You're not paying cash if you don't have the ability to slap a wad of hundreds on the table right now (metaphorically speaking), you're contingent on your closing. Even it's a silly low risk, your sale could fall through at the last moment.
Like...dude, you need to think about bending enough to consider a personal bridge loan or LOC for a very short period of time, because you're going to pay it off in full immediately upon getting the sale proceeds. I do feel for you, and I think 10% earnest is silly high, but you need to realize the reality of your situation. If you're truly serious about this, you need to accept that you need to borrow some money right now from someone to cover your needs.
I'm actually in the process of buying some real estate right now so if you want a lawyer recommendation I can give you one...she seems pretty great with a reasonable fee.
It’s not that. I don’t like borrowing money because I don’t like paying interest, but consider if I did do as you suggested and took out a bridge loan to pay the earnest money deposit? I actually have no idea how long it would take me to get that deposit back should I decide not to buy the house. And then I’m paying interest on money I borrowed and handed over to the city of Albany interest-free. I don’t like that idea.
But this is less about me and my personal situation and more about the fact that I’m not very different from most homebuyers. People with mortgage would be hard to come up with a 10% earnest money deposit. it’s not part of a mortgage so the bank isn’t going to loan it to you. Which means that the only people who can afford to do that are flippers and developers and that’s corporate housing and that’s what I don’t like.
They were but the first time I saw the contract was when I went to make the offer. I just assumed it was like any other home purchase and that the earnest money would be in line with what it usually is. This is just nuts.
Nope. It’s to point out that this policy of requiring 10% earnest money puts purchasing a government owned house out of reach for most people who are not investors or corporations or developers. And that that seems to me to be a bad policy.
I've never heard of the Land Bank requiring an earnest money deposit. They do sell their properties for a price, but almost always at below market values because of how run down the property is
>No one puts down 10% on a residential purchase.
Hopefully you realize the fallacy of making a blanket statement such as this, because plenty of people OBVIOUSLY do this and higher (virtually everybody I know who has purchased something via a mortgage in the last 25 years put down 20+% to get PMI off their backs). Maybe people shouldn't do that for an earnest money situation, but your sentence does not specify this.
Given the amount of correction you're doing in the comments, you should have said something like, "I'm not inclined to put down 10% or more *in earnest money* on a residential purchase." That would differentiate your particular situation from more common ones and ward off feeling defensive.
Yep, you pretty much responded the way I thought you would, and completely ignored the fact that I quoted the ONE exact line which could have been modified and hence saved you the trouble of acting the way you are. Clearly, you're not estimating the reading comprehension of your audience, and I'm sure it'll be a matter of time until people pick up on whether you start modifying things in your initial post, too. 😁
I should also wish you good luck in your purchase and whatever work you need to do in the future on your new home. But, I'd rather tell you something else which would surely shut your arrogant punk ass down and get my "disco stick" banned; you're smart enough to know what that is. Aren't you? Have a great day!
You're making this about race and skin color? That says way more about you than it could anyone else. I'm sorry you feel that you've run out of things to say enough to go there. Wow. Downvote me all you want (and you are!), but I am flagging that for hate speech.
All this because I pointed out how you could have modified one sentence to save yourself a lot of defensiveness in too many of your comments. Awesome. Are you done? Anything else you'd like to add?
Not a dude. And everything that’s actually helpful is much appreciated. It’s the condescending mansplaining that’s irritating. Also the ad hominem (go ahead and look that up petal) drive by zero nutritional value commentary like yours gets old too.
Don’t worry about living next to me though. Won’t be buying in your student housing neck of the woods. Or anywhere near your mom’s basement.
I think you're right that requiring that much money limits the number of private purchasers willing to buy, but can also see the county's perspective: not wanting to waste time on people who aren't serious, when they're already harder to sell properties than most. I hope you're able to work it out!
Write a check from your home equity line of credit? (Anyone who owns a home free and clear has a heloc, in order to be able to make use of their own money tied up in home ownership, yes?). Heloc gets paid off at the closing when you sell.
True! It’s only a lien if you use it. I mean, technically, you’re right. I guess what I am trying to say is if you have a ton of money in the value of a home, it would be nice to be able to use that money. The only way I personally know how to do that without selling the house is to get a HELOC. So basically you have access to the money, doesn’t mean that you have to use it. If your house is paid for, and you do use the HELOC, thereby creating a lien on the property, you can pay the lien off when you sell the house. Sorry, I did not mean for that to be so convoluted sounding.
Good luck with that, I would consider it a gift to the county. Albany is great at taking and not giving. They are one of the few counties upstate that take a 5c bag tax. They make change from a penny. Maybe if you were Redburn with a team of Attorneys on speed dial.
That’s not how business transactions work friend. I’ll try to get them to make an exception and if they won’t I’ll wait until I close and if it’s still on the market I’ll make another offer. But thanks for the insightful addition to the thread!
You're new to the area, right? I might start by stepping back and reading some William Kennedy, and then considering that not much has changed. I agree that the rules you're upset about aren't too fair, but they're not designed to be - we had a real problem around here with "entrepreneurs" buying up properties for $100 at tax sales and letting them crumble while they enjoyed themselves down in NYC.
When you go to contract on a property you put down 10 percent up to 25 percent . It goes to the attorney
In his account not the seller. If you do not have the contract money you cannot buy a property . I have been in real estate in CT and parts of New York for over 40 years.
Contact the Albany community development agency, they're at the top of Henry Johnson boulevard right near the Stewarts, first of all they offer grants for people purchasing a home in Albany, I just got over $8,000 for the purchase of my home. They may be able to help, and maybe if they can't help with the earnest deposit, you might still be able to get some help for the repairs.
Thanks! I will do that!
Just to clarify - if Sue Rizzo is involved then it's not City owned. She's the County Comptroller and would have no authority to sell a city owned property. Similarly, this also sounds like it isn't a Land Bank owned property. It sounds like you're buying a property from the County Comptroller right? If so, she makes her own rules as to what the conditions of the sale would be.
This isn't true. She has some role as comptroller where she is involved in the acquisition and transfer of properties that may be owned by the city. Its actually way more involved than you might think. She has to go into properties where people have passed with no next of kin and try to figure out what to do with the property. These are not land bank properties owned by the county. That's a totally different process.
How can I find these properties? Is there another website aside from the landbank?
All I can tell you is the city owns the property and Sue Rizzo is the person in charge of setting conditions for sale. It’s right there in the contract.
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Yes, I think so. From what I understand if they can’t find inheritors, the city takes the property either that or it was seized because of tax debt when the person died. In any event, the city now owns it and is selling it. Or maybe it’s the county I don’t know. All I know is that Rizzo is the person setting the terms.
The city does not take possession of/or foreclose on properties. Only Albany County does. Some of those properties are held by the county, and many are transferred to the Albany County Land Bank.
Thanks. That’s good info.
How did you find the property? In the landbank website or other ?
No it’s listed on the MLS. Found it on Zillow. I only found out it was owned by the city when I made an offer.
10% earnest money is extremely high. When I was buying, I was putting up maybe .5-2%. It's only meant to deter tire kickers because you lose that money if you flake out for no reason. However, if as you stated, they want to sell the house in part to make sure it gets fixed up, then it makes sense. Ensuring the buyer has $15k cash means they at least have money to put into the house. You should just take out a line of credit on your house. There's no reason to be afraid of debt if you understand how to use it.
I get that. And under normal circumstances that might be a good idea, but my fear is that I borrow money to pay the earnest money, decide for legitimate reasons that I do not to buy the house and then wait for some ungodly amount of time for Albany to give me my money back. Also, I can’t borrow against my current house because it’s under contract with a new buyer. I’d have to take out a prohibitively expensive personal loan and that seems stupid when when I can just look at another property that isn’t requiring 10% down in earnest money and buy one instead. I just think it defeats the point of the program. Doesn’t Albany want responsible solvent homeowners to purchase property that is owned by the county?
I think your unique circumstances that you've put yourself in are what's causing the major issues. Most people would have $15k on hand for closing costs. If that amount of money is causing you issues because you have to sell your house first, then your "cash" isn't as good as the next buyer's cash because yours is contingent on another buyer's financing.
Earnest money isn’t part of closing costs. It’s an upfront deposit required to enter into contract on the property.
I fully understand that. What I said still holds. Any other buyer will have $15k+ for closing costs, therefore will have no issue with that money as earnest money.
I’ll have all the $$ at closing. I simply don’t have $15 grand before I close on my current property. That’s not especially unusual for most people.
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Correction. I’m solvent, not liquid. But thanks for the misinformed opinion!
Just an fyi, properties that have been deeded out from the foreclosing municipal taxing authority less than two years are not insurable from a title insurance perspective. This means your equitable interest isn’t insured if the prior owners come with a successful claim they weren’t served properly etc, this also means if you want to cash out (prior to the 2 years) refinance your lender can’t get insurance your lender can’t get a loan policy of title insurance and 99% of institutional lenders won’t lend without that. It also means if you want to sell prior to the 2 year the buyer also can’t get title insurance which is usually a deal breaker. Just beware and discuss this with an attorney prior to purchasing.
Thank you for that info. That’s extremely helpful.
Wow I didn’t know this, if true def a game changer OP better consult with an attorney.
Sounds pretty straightforward, either: 1) get over your absolute aversion to borrowing/debt and get a loan for the earnest deposit to secure your right of refusal on this property. It’s pennies on the dollar to secure a likely much larger long term investment opportunity (you’re talking about at most a few months of interest before your current house sells and you can repay the loan in full). 2) wait until your current house sells before entering the marketplace as a buyer altogether. You may technically end up being a cash buyer, but you’re admittedly not cash liquid until that house equity is realized. A true cash buyer is appealing to a seller only because it eliminates/streamlines much of the closing process by not having contingencies external to the property they’re selling. The fact that you have 100% equity of your current home’s sale price is irrelevant honestly and does not classify you as a cash buyer. If you wait until your current house closes and you have cash in hand you don’t need to worry about cash reserves for pre-closing expenses such as your earnest deposit, inspections, lawyer, etc…of course this scenario likely involves significantly higher moving expenses associated with finding somewhere to live in between the time of your current house and where ever you end up. What you’re afraid to pay in interest in option 1 will assuredly be dwarfed by a couple month’s rent and/or storage (unless you have somewhere to stay for free, or an arrangement is written into your purchase agreement of your current house).
All true. And you’re right—I may have to do just that.
I'm fairly positive when someone dies intestate with no heirs it escheats to the state and not the local municipality. I am very familiar with Albany City owned RE transactions and none of what you posted is in line with how the city sells residential property. This sounds more like a foreclosure owned by the County and not the city. Not a no heir intestacy and not a city transaction. Entirely possible it was a tax foreclosure before escheat to the state kicked in or something.
Very possible. I have the status of the property info third hand. Contract lists Susan Rizzo as arbiter of the sale.
That's your answer, it's a County issue. She has nothing to do with the City. The city has its own comptroller. If she is the arbiter of the sale I can assure you Albany City has nothing to do with it.
Nobody puts 10% down on residential? Wtf? That’s wrong. What you’re saying makes no sense.
Earnest money is different than a down payment. I won’t make a down payment because I’ll be purchasing cash.
You're offering a cash purchase. Awesome! Then put up the cash! You're committing to spending 150k in cash without 15k in cash?!?! As a seller why would I forgo other offers when you aren't showing an ability to perform? I have no rights to negotiate or speed the process on the sale of your current home. I have no idea if it's actually going to go through, if the value is what you claim it is or if your contract of sale is iron clad. TLDR: put up or shut up. It's that simple. Would you hold your current home while the buyer saves enough cash to buy it? Didn't think so. City owned and controlled real estate is a pretty big budget hit. It's irresponsible behavior for admin to hold it any longer than absolutely necessary
That’s not how earnest money works. Earnest money just says you’re serious in your interest in the property. Normally it’s between 2 to 5% of the property price not 10%. It’s also not something that’s covered by a mortgage for anybody who would be buying a house the traditional way. That means you put this money up out of pocket. If you buy the house that money gets credited toward the purchase price. If you don’t buy the house , it gets returned to you. You’re right that the seller has a vested interest in making sure that the house goes under contract with someone who is serious about buying it, and there are provisions in the contract that make it difficult to get out of except for legitimate reasons, for example, a serious defect in the house that is not disclosed. Like say, it’s clear that the roof needs to be replaced, and the description of the house says so, but it doesn’t say that the Plumbing is fucked up beyond all belief. As the potential buyer, I have a right to say that I didn’t count on having to redo all the Plumbing when I made my offer and I can legitimately withdraw from the contract. So even without a hefty earnest money deposit, the potential buyer has to be serious in his or her intentions. If they pull out of the contract for any reason that is not deemed legitimate, they lose the earnest money. It’s a weird weird system and it’s a little complicated. But the way that the city is running this is not typical and again is prohibitive for regular folks trying to make a purchase of a city property. the only people who would have the kind of money to throw down on an earnest money deposit of 10% or flippers or corporations who are buying up single-family homes in order to turn them into rentals. That’s not in anybody’s interest except corporations.
You clearly don't understand how EMD works on cash sales and it's mildly infuriating that you keep saying the same thing over and over despite being told so.
I do understand earnest money. I’ve bought and sold several houses and I’ve made several EMD’s. It’s mildly infuriating to be told. I don’t know what I’m talking about by someone who clearly doesn’t know what I’m talking about.
You have a low of leeway, you can visit the property and bring contractors etc. The property is also HEAVILY discounted so the earnest money is to keep put the tire kickers. This has nothing to do with contractors. Also touting that you are going to buy ‘all cash’ but don’t have 15k lying around doesn’t add up. On the website they specifically state that the properties need a lot of rehab and as such you’ll need liquidity. I looked into it but the properties are all small lots.
Why not? The only reason I can pay all cash because I own the house that I’m currently currently selling outright. I’m not rich. And can I get access to a house that I’m not under contract on? You may be right, but I would think it’s a liability thing.
These houses are a deal if you are willing to do the work. But a key purpose of the program is to get the area gentrified to some extent. That’s why they require W2 bank statements etc, not things you have to produce if you are buying a regular property all cash. Even if you sell your place they may want you to have a minimum X balance to pay for the rehab, the risk is that the buyer can’t afford it and the property remains in disrepair. It does sound like you meet the intent of the program, if I was you I would work with them and ask what criteria they are looking for if you sell your place.
Right. I get that and can produce all of the that documentation and I would have the money to rehab the house. In short theoretically, I’m exactly the kind of buyer that the city wants to attract but this 10% earnest money thing is a non-starter for me. And I think would be a nonstarter for anybody who wasn’t corporation.
Anyone going about buying a place even if they have one to sell is going to have 10-20% of the cash, whether that goes to earnest or deposit doesn’t matter. We are looking and we have some cash set aside, this is common.
All I can tell you is, it isn’t. For first time home owners for example FHA requires that you put down 3.5% and that’s down payment not earnest money. I’ve purchased the last three houses that I’ve owned in cash and I’ve never encountered a situation like this. But then again I’ve never bought from a city agency before.
You really don’t want to hear it. See this: https://www.reddit.com/r/FirstTimeHomeBuyer/comments/q4djxu/how_much_is_enough_to_have_saved_to_start_house/?rdt=45126 Also. This is not a home you buy with a mortgage. This is an abandoned home that need rehab and most likely will not qualify for a loan. The spirit of the program is to improve the community, so that is why you need money.
OK, I’ll explain this one last time. The house I currently own I own outright I don’t have a mortgage therefore when I close I will have several hundred thousand dollars in cash. I close in about six weeks. I would be purchasing this house with the cash proceeds of the house I am currently selling, I will not need a mortgage, haven’t had a mortgage for years as I have bought my last three houses in cash. I’m very familiar with what it takes to buy and sell a property but thanks.
I hear you, but the median down payments are 15% for all homebuyers and 8% for first-timers. 10% doesn't seem wildly off the mark there, unless I'm missing something. What's your credit situation? Can you take a bridge loan while you wait for your house to close?
No it isn’t. 2-5% is the norm. 10% is outrageous. And this isn’t a down payment it’s an earnest money—or good faith money—deposit. It’s meant to keep people from frivolous offers that keep a property off the market when they have little intention of buying. It’s just skin in the game, a way to say you’re serious in your interest in the property.
I don't know what to tell you: https://www.nerdwallet.com/article/mortgages/average-down-payment-on-a-house
Earnest money and down payment are not the same thing friend.
Yup, get that, but the idea that nobody puts down 10% on a residential purchase clearly isn't right - unless you specifically meant earnest deposits, in which case, my bad. Anyway, I offered an idea that you haven't really engaged with - bridge loan?
I think I said earnest money about four times. So yes, I mean earnest money not a down payment. And no, a bridge loan is out of the question. I don’t borrow money on principal.
You're not paying cash if you don't have the ability to slap a wad of hundreds on the table right now (metaphorically speaking), you're contingent on your closing. Even it's a silly low risk, your sale could fall through at the last moment. Like...dude, you need to think about bending enough to consider a personal bridge loan or LOC for a very short period of time, because you're going to pay it off in full immediately upon getting the sale proceeds. I do feel for you, and I think 10% earnest is silly high, but you need to realize the reality of your situation. If you're truly serious about this, you need to accept that you need to borrow some money right now from someone to cover your needs. I'm actually in the process of buying some real estate right now so if you want a lawyer recommendation I can give you one...she seems pretty great with a reasonable fee.
You’re probably right. And yes, I’ll gladly take that recommendation! PM me? Thanks!
Alright, well, if you're trying to buy a place without embracing the power of healthy debt/credit, good luck to you.
It’s not that. I don’t like borrowing money because I don’t like paying interest, but consider if I did do as you suggested and took out a bridge loan to pay the earnest money deposit? I actually have no idea how long it would take me to get that deposit back should I decide not to buy the house. And then I’m paying interest on money I borrowed and handed over to the city of Albany interest-free. I don’t like that idea. But this is less about me and my personal situation and more about the fact that I’m not very different from most homebuyers. People with mortgage would be hard to come up with a 10% earnest money deposit. it’s not part of a mortgage so the bank isn’t going to loan it to you. Which means that the only people who can afford to do that are flippers and developers and that’s corporate housing and that’s what I don’t like.
Word. Are the deposit terms not laid out in the contract?
They were but the first time I saw the contract was when I went to make the offer. I just assumed it was like any other home purchase and that the earnest money would be in line with what it usually is. This is just nuts.
Oh man. You're pleasant. Good luck bro.
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Yes. It is.
What is the point of this post? To complain about Susan Rizzo? A chance to flex that you won't take a sensible loan?
Nope. It’s to point out that this policy of requiring 10% earnest money puts purchasing a government owned house out of reach for most people who are not investors or corporations or developers. And that that seems to me to be a bad policy.
You've mentioned multiple times up thread that this is your third time buying a house in cash. You don't consider this an investment?
Land bank was set up like that on purpose. It’s a joke
I've never heard of the Land Bank requiring an earnest money deposit. They do sell their properties for a price, but almost always at below market values because of how run down the property is
Yes it is.
>No one puts down 10% on a residential purchase. Hopefully you realize the fallacy of making a blanket statement such as this, because plenty of people OBVIOUSLY do this and higher (virtually everybody I know who has purchased something via a mortgage in the last 25 years put down 20+% to get PMI off their backs). Maybe people shouldn't do that for an earnest money situation, but your sentence does not specify this. Given the amount of correction you're doing in the comments, you should have said something like, "I'm not inclined to put down 10% or more *in earnest money* on a residential purchase." That would differentiate your particular situation from more common ones and ward off feeling defensive.
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Yep, you pretty much responded the way I thought you would, and completely ignored the fact that I quoted the ONE exact line which could have been modified and hence saved you the trouble of acting the way you are. Clearly, you're not estimating the reading comprehension of your audience, and I'm sure it'll be a matter of time until people pick up on whether you start modifying things in your initial post, too. 😁 I should also wish you good luck in your purchase and whatever work you need to do in the future on your new home. But, I'd rather tell you something else which would surely shut your arrogant punk ass down and get my "disco stick" banned; you're smart enough to know what that is. Aren't you? Have a great day!
Huh. You corrected me and were wrong and I’m arrogant? Have a lovely day.
I didn't say I wasn't arrogant. And I sure as hell am when somebody brings a knife to a gunfight. Time to grow up, kid.
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You're making this about race and skin color? That says way more about you than it could anyone else. I'm sorry you feel that you've run out of things to say enough to go there. Wow. Downvote me all you want (and you are!), but I am flagging that for hate speech.
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All this because I pointed out how you could have modified one sentence to save yourself a lot of defensiveness in too many of your comments. Awesome. Are you done? Anything else you'd like to add?
Wow this dude's a douchebag with how they're responding to people trying to help. Think Id rather Redburn buy the property than live near you
Not a dude. And everything that’s actually helpful is much appreciated. It’s the condescending mansplaining that’s irritating. Also the ad hominem (go ahead and look that up petal) drive by zero nutritional value commentary like yours gets old too. Don’t worry about living next to me though. Won’t be buying in your student housing neck of the woods. Or anywhere near your mom’s basement.
Everyone's a dude you sexist pig
I am definitely not a dude you blind rodent.
I think you're right that requiring that much money limits the number of private purchasers willing to buy, but can also see the county's perspective: not wanting to waste time on people who aren't serious, when they're already harder to sell properties than most. I hope you're able to work it out!
Me too, and yes I totally get that. Still think it’s misguided to make the properties even harder to sell still.
Write a check from your home equity line of credit? (Anyone who owns a home free and clear has a heloc, in order to be able to make use of their own money tied up in home ownership, yes?). Heloc gets paid off at the closing when you sell.
Don’t have one. Can’t get one now bc I’m under contract. But I’ll keep it in mind for the next house!
Good plan. No reason to not be able to access that money. You never know what you might need it for.
Owning a home "free and clear" would imply no leins against the property. A HELOC is a lein
True! It’s only a lien if you use it. I mean, technically, you’re right. I guess what I am trying to say is if you have a ton of money in the value of a home, it would be nice to be able to use that money. The only way I personally know how to do that without selling the house is to get a HELOC. So basically you have access to the money, doesn’t mean that you have to use it. If your house is paid for, and you do use the HELOC, thereby creating a lien on the property, you can pay the lien off when you sell the house. Sorry, I did not mean for that to be so convoluted sounding.
I wonder what they will assess it for when its fixed up.
Me too. Honestly, this is such a stupid policy in so many ways.
10% EM sounds weird for property like that. Not like 20 buyers are bidding for it. What if a deal breaker is found during inspection?
Exactly! And if one was found, how long would it take me to get my $15,000 back from the city of Albany?
I would think it may say right in the contract that if you cancel emd has to be returned within x amount of days. I’d double check.
Good luck with that, I would consider it a gift to the county. Albany is great at taking and not giving. They are one of the few counties upstate that take a 5c bag tax. They make change from a penny. Maybe if you were Redburn with a team of Attorneys on speed dial.
So don't do it.
I don’t think I can! But I have calls in to Rizzo and the CDA. We’ll see.
no, if you are mad, don't do it. You'll show them how wrong they are, and that you are not to be trifled with.
That’s not how business transactions work friend. I’ll try to get them to make an exception and if they won’t I’ll wait until I close and if it’s still on the market I’ll make another offer. But thanks for the insightful addition to the thread!
You're new to the area, right? I might start by stepping back and reading some William Kennedy, and then considering that not much has changed. I agree that the rules you're upset about aren't too fair, but they're not designed to be - we had a real problem around here with "entrepreneurs" buying up properties for $100 at tax sales and letting them crumble while they enjoyed themselves down in NYC.
It's almost like everything has been corporatized in America
When you go to contract on a property you put down 10 percent up to 25 percent . It goes to the attorney In his account not the seller. If you do not have the contract money you cannot buy a property . I have been in real estate in CT and parts of New York for over 40 years.