|
Arzakon posted:
Here...I will post the house and then a comp I found: http://edmonton.comfree.ca/display.html?code=29175 (house we want) http://www.realtor.ca/propertyDetails.aspx?propertyId=9308470 (comp) Edit: here are photos of the stairs that need to be replaced as well as the garage:    
Ophelia's Ashes fucked around with this message at 18:00 on Apr 5, 2010 |
#
?
Apr 5, 2010 17:52
|
|
|
|
| # ? May 17, 2024 02:03 |
|
|
Ophelia's Ashes posted:Buying our first home has turned into a nightmare and I'm about ready to rent the rest of my life. If you're still in a similar position as last month when you posted, you absolutely can't afford to buy a moneypit, particularly not at this price with less than 20% down. If your reduced income for extended maternity leave is still part of the near-future plan, you're setting yourself up for some really tough times.
|
|
#
?
Apr 5, 2010 18:35
|
|
|
Engineer Lenk posted:If you're still in a similar position as last month when you posted, you absolutely can't afford to buy a moneypit, particularly not at this price with less than 20% down. If your reduced income for extended maternity leave is still part of the near-future plan, you're setting yourself up for some really tough times. My maternity leave won't be an issue, we have money saved for that.
|
|
#
?
Apr 5, 2010 18:40
|
|
|
When buying a house, my wife and I decided what we wanted the most was a house with what I call "good bones". That is to say, perfect condition for the foundation, frame, roof, electrics, windows, and plumbing. We could deal with a floor that needed resurfacing, old paint, some trim that's bad looking, etc. We could replace a stove. But foundation work, demolition, no no no gently caress that. This is where fixer-uppers fit in the market; people like me that don't want to deal with the uncertainty potential in a house with major, but not well assessed, structural issues. So a fixed-up house that was a fixer-upper is worth a premium, but only if all the work was done, and it was done very well. And it is on the sellers to prove that this is the case, and on you to hire your own inspectors and verify it. If it's been done very well, you're in good shape because you know there aren't any hidden issues that could cost tens of thousands to fix. That's worth an extra premium for the non-hassle. But this house you're looking at is the worst of both worlds: a fixer-upper that was fixed up, but badly, and with many undiscovered issues still lurking. I guarantee if you already found problems with a porch, stairs, and the entire garage needs to be demolished, than there are a dozen more problems you haven't found yet. And yet, you're about to pay a substantial premium for the (lousy) work the sellers did! There is only one correct action here, and that is to walk away. It hurts, you've invested months of time and maybe hundreds of dollars on inspections, but that is a small price to pay compared to the tens of thousands and years of heartache and stress that await you if you buy this house. For the amount of money you are spending, you can demand a house with "good bones". Maybe not every thing will be ideal, you might have to settle on a roofline you don't like, a kitchen that's not the best shape, or ugly tile in the bathroom, but as skipdogg said, that's small stuff you can fix without much trouble, and yeah, you won't ever find a house that is "perfect". But you sure as gently caress can find a house that isn't harboring a dozen known and unknown gigantic problems, for which you are paying extra to inherit. Walk. Away. (Get your husband to come read all the responses to your post, too. And tell him I'm a guy and I am insistent and negotiate hard, but it's not smart to negotiate hard on something you shouldn't buy at all, it's just headstrong. Walk away. You will find a better deal.)
|
|
#
?
Apr 5, 2010 19:45
|
|
|
Has that "comp" actually sold at $395,000 or is it just on the market for that? Everything that is sitting on those websites could be sitting there because they are someones pipe dream. Have you sat down with your realtor and actually looked at the recent sales in the area?
|
|
#
?
Apr 5, 2010 20:01
|
|
|
Well you guys, this is why I love you so, you kick my rear end into reality. We decided to walk away. Leperflesh, your post really hit home and I realized that problems we could be getting ourselves into. Thanks so much guys, truly. I was reluctant and I appreciate your honestly. I lost out on $350 but whatever. Tomorrow is a new day.
|
|
#
?
Apr 5, 2010 20:34
|
|
|
Ophelia's Ashes posted:I lost out on $350 but whatever. Tomorrow is a new day.
|
|
#
?
Apr 5, 2010 21:20
|
|
|
Ophelia's Ashes posted:Well you guys, this is why I love you so, you kick my rear end into reality.  VICTORY!!! Someone listens to BFC advice and acts on it immediately! It feels great, OA. I'm really happy for you guys. There are hundreds of houses out there, I'm confident you'll eventually find one that you love.
|
|
#
?
Apr 5, 2010 22:06
|
|
|
Leperflesh posted:
Ironically...the home owners came back and said they would demo the garage fully..... My husband and I still feel we should walk away but of course they had to come back and give us that "well.....if they are gonna do that...." feeling.
|
|
#
?
Apr 5, 2010 22:55
|
|
|
Yeah. Here's the thing. Now that inspections have happened and all these worms are out of the can, they're hosed; if you walk, the next buyer will get to see all those inspection reports because of disclosure laws (well, you're in canadaland, so I dunno what the laws are there, but here in california if you know a bad thing about your property you're required by law to disclose it). So they've been negotiating like "We'll eat $4k of the $8k of costs", which means they're actually inflating the total cost of the house! Because you then pay $x -$4k +$8k = $x+4k. Whereas once you walk, they will actually have to drop the selling price substantially, because nobody is going to want the wreck they're trying to flog. Don't be sucked in. If what you wanted was a fixer-upper, you could buy one. For really cheap. And then do all the work right, yourself, and know it's all done. What you want is a house that doesn't need major repairs. Go find one, there's plenty!
|
|
#
?
Apr 6, 2010 01:17
|
|
|
Oh my god, I loving HATE buying a house. We offered $220 on a $249 listing, it crept up and we offered $235. They wanted $239 so we agreed and they then immediately said no, and removed the house from the market. WHAT THE gently caress.
|
|
#
?
Apr 6, 2010 01:37
|
|
|
Our experience has been a complete whirlwind. Last week my dad (an insurance agent) was viewing a house and met the realtor. He was so impressed that he forwarded me her name and number, and we hit it off. My fiance is ready, but I had been going back and forth about renting or staying in a house. I did some soul searching and decided that I was happy with my job and staying in the area for 5-10 years was viable. So we started looking. Due to our jobs our target area was fairly small. My fiance had the week off for spring break (she's a teacher), so she hunted while I was at work. A few days later she brought me in and showed me the ones she was happiest with. I immediately fell in love with her first choice, and we decided to put an offer down. It's a 2 story colonial built in 91, with a wraparound porch and a 2 car garage. At 2200 square feet it's a pretty big starter home. The house was listed by a relocation company for $264,900 and the closest comp was $10K higher. We offered $260K and $10.4K in closing costs; they countered with the asking price but matched our closing cost request. We accepted, and they should ratify the contract soon. We settle on 4/30. The home inspection is tomorrow. The relocation company already did a home inspection in January but we want to verify everything is acceptable. Our major source of concerns are the roof (it's 20 years old but looks pristine) and the water heater (also 20 years old). The roof we'll keep an eye on, but we'll change the water heat immediately. The rate at which everything is happening is disconcerting, but we've both put a lot of thought into it and feel we're making the right choice. The location is good, the price feels right, and we're happy with the house. We've also managed to secure a good FHA loan (5.0%, no points or fees), and with the closing cost assistance will be able to pay off the PMI up-front cost with an extra $1K over the 3.5% down payment. So yeah, scary but I'm really optimistic.
|
|
#
?
Apr 6, 2010 02:32
|
|
|
So we all know that Vancouver is one of the most expensive housing markets out there, but this is just depressing. These two houses are a block away from where I grew up, and it's a sign that I'll never be able to own a house within 500km of Vancouver. http://www.dexterrealty.com/property-detail-V818373.html http://www.thevlist.com/vlist/property_detail.php?t=q&code=&vlist=1010000592&reqd_cxc=32 It gets pretty annoying watching those HGTV shows where couples are debating whether a house with only 5 bedrooms is worth $120,000.
|
|
#
?
Apr 6, 2010 04:57
|
|
|
Taxes with everything for FTHB credit goes in the mail today. 
|
|
#
?
Apr 6, 2010 17:51
|
|
|
Reggie Died posted:So we all know that Vancouver is one of the most expensive housing markets out there, but this is just depressing. These two houses are a block away from where I grew up, and it's a sign that I'll never be able to own a house within 500km of Vancouver. I know Vancouver is a nice place to live, but I've never been able to figure out why the housing market is so nutty up there. Three years ago I thought the same thing about Seattle and my wife and I just moved in to our house last month, so you never know what will happen.
|
|
#
?
Apr 6, 2010 20:02
|
|
|
Reggie Died posted:http://www.dexterrealty.com/property-detail-V818373.html Looks like a bubble to me
|
|
#
?
Apr 6, 2010 20:06
|
|
|
necrobobsledder posted:WTF, and I thought the Bay Area was bad for houses. Minus the plot of land they're on, those houses could probably only pull about $800k USD here. I just searched for the full list of most unaffordable places to buy a house and that survey lists Vancouver as the most unaffordable place to live, blech. http://www.fcpp.org/publication.php/3153
|
|
#
?
Apr 6, 2010 21:16
|
|
|
Home inspection was today. Guy was really professional and very thorough. They divided the items into 3 different priority levels, with 1 being immediate, 2 being near-term, and 3 being long-term risks. The four big issues were: 1) The GFCI outlet in the garage is apparently linked to every bathroom and exterior socket, and it doesn't trip. 2) The wallboard in the garage ceiling was installed with smooth nails and looks ready to fall. 3) There's a sink in the master bathroom that has a leaking pipe. 4) A boot on a pipe vent on the roof is cracked and is probably acting as an avenue for water to enter the garage attic. Beyond that he also had one moderate; of the 12 or so (recently installed) windows 8 have failed thermal seals. What's interesting is that the GFCI problem and the failed thermal seals were both discovered during a previous home inspection, and the contract explicitly states that these issues would be 'corrected by a qualified contractor.' Oddly enough the only correction I noticed was that they nailed down a piece of flashing I had noticed was loose earlier. It's even evident in one of the seller's inspection pictures! It will be interesting to see how things end up. Fixing thermal seals is very expensive, and given how many have failed we may be inclined to just replace the windows. The inspector made it clear that he was very satisfied with the house, and that these issues were relatively minor. I'm a little worried about the cracked boot and the garage ceiling, but we'll think things over before we decide what we ask the seller.
|
|
#
?
Apr 7, 2010 01:01
|
|
|
That sounds pretty minor, really. No problems with the roof, foundation, plumbing, etc? No indications of dry rot or termites. Electrical stuff isn't too bad, it's easier to work on. The window sealing might be expensive, but it's not going to take weeks and weeks for a contractor to get the job done, so at least it's not that disruptive to fix. The pipe in the bathroom is probably something you can fix yourself, if you have a big wrench. I've done some light plumbing, it's dead easy. You just follow directions and unscrew things.
|
|
#
?
Apr 7, 2010 03:04
|
|
|
Leperflesh posted:That sounds pretty minor, really. No problems with the roof, foundation, plumbing, etc? No indications of dry rot or termites. Electrical stuff isn't too bad, it's easier to work on. The window sealing might be expensive, but it's not going to take weeks and weeks for a contractor to get the job done, so at least it's not that disruptive to fix. The bones of the house were fantastic. In spite of being 20 years old the roof looks almost new, and there is no evidence of humidity in the attic. The crawlspace beneath the house is lined in plastic. The ground beneath the plastic is saturated due to a high water table, but the crawlspace itself had a dehumidifier and looks fine. As long as we maintain it there shouldn't be a problem. The house had termites back in 2000, but there was no evidence of an infestation. The seller has a contract with a termite company and has placed bait traps around the house to prevent another incursion. The nice thing about the window sealing is that the contract states the seller must take care of it. So yeah, no major issues.
|
|
#
?
Apr 7, 2010 03:51
|
|
|
Hey guys, i gotta question about mortgages. I had applied for a mortgage on a home a while ago but the deal on the home fell through. The mortgage was for 5%, 30 year fixed. I had put a contract on a short sale home recently and i think that the bank will actually approve the short sale soon. The mortgage guy said that i could transfer the mortgage application from the old home to the new home and it will still be locked at 5% until the 19th of this month. I doubt i could close by the 19th, but he said that i could also pay 1/8th of a point (about $313) to extended it past the 19th for 5 business days. His new rate now is 5.25 since mortgage rates have gone up since. Is it a good idea to stay with my 5% with the likely chance that i might have to pay the 1/8th of a point once or twice to get the mortgage at that rate, or just re-lock at 5.25%? edit: forgot to add the purchase price of the home is $363k if that makes a difference Mister Fister fucked around with this message at 16:33 on Apr 7, 2010 |
|
#
?
Apr 7, 2010 16:29
|
|
|
I think the break-even point on that is just a couple of years even if you have to pay total of half a point (4 extensions). http://mtgprofessor.com/Calculators/Calculator11a.html
|
|
#
?
Apr 7, 2010 17:14
|
|
|
slap me silly posted:I think the break-even point on that is just a couple of years even if you have to pay total of half a point (4 extensions). ah cool, that helps a lot, thanks!
|
|
#
?
Apr 7, 2010 18:35
|
|
|
Maggot Monster posted:Oh my god, I loving HATE buying a house. We offered $220 on a $249 listing, it crept up and we offered $235. They wanted $239 so we agreed and they then immediately said no, and removed the house from the market. WHAT THE gently caress. BofA to increase foreclosure rate 600% in 2010.  Bear in mind that we'll probably overshoot on the downside, so a projected 22% decline is probably optimistic. e: OK my bad (USER WAS PUT ON PROBATION FOR THIS POST)
|
|
#
?
Apr 8, 2010 23:14
|
|
|
Speculation on what the housing market may or may not do in the future is not within the scope of this thread. I know it's been a while, so maybe you forgot. Feel free to make your own thread about what will happen since real estate as an investment isn't what this thread is about.
|
|
#
?
Apr 9, 2010 02:02
|
|
|
Well, so far we've had every bid we've made on a house (besides the first we walked away from) flat out rejected with no counter offer. Are we doing something wrong?? Are we offering too low? House #2 - wanted: $369,900 offer: $355,000 House #3 - wanted: $365,000 1st offer: $330,000 and they counter offered with $363,000 and we offered $345,000
|
|
#
?
Apr 11, 2010 07:11
|
|
|
What market are you looking in? Last year when we were looking in the Bay Area, our agent said normally he expects an average of about three or four offers before his customers get one accepted, but that at the moment it was more like 8-10. (We had our second offer accepted, but we also passed up a LOT of houses - we probably saw 25 houses with the agent, and another 25 on our own.) Also we made the offer that was accepted the day the house went on the market, and we offered the asking price. Probably helped. Really it's a crapshoot though. You might get lucky and get the first one, or you might be unlucky and have to make a lot of offers. If you are lowballing, expect a lot more to be rejected... even if you have the high offer, some sellers simply cannot afford to sell for below asking (e.g., it'd put them upside down).
|
|
#
?
Apr 11, 2010 08:38
|
|
|
PC LOAD LETTER posted:No need to rush guys, there are going to be plenty of more homes on the market and there are still some more significant price declines baked into the cake. Well, I'm doing a home inspection (on a cheaper house) tomorrow, so ha! My landlord is selling our condo and we cannot find anything appropriate to rent nearby. We need at least 2000sq ft consider we're a family of five, and as I discovered larger house rentals only exist in the really expensive areas. Once you move out to the suburbs around Boston there really aren't many rentals available, which is frustrating. The first house we looked at was $240,000 and this one was only $195,000, so I think we're in pretty good shape considering they pre-approved us for $300,000. This poo poo still scares me but I need somewhere to live, so oh well.
|
|
#
?
Apr 12, 2010 03:03
|
|
|
Maggot Monster posted:We need at least 2000sq ft consider we're a family of five Not to pick on you, because I'm sure what you meant was that you want that much space for your large family, but these kinds of statements always make me kind of chuckle. (In the rest of the world, large families routinely live in homes far smaller than what Americans are accustomed to, and do so quite happily. Hell, when I was a kid, my family of 5 lived in a 900sq foot house for several years and it was fine...) But anyway, sounds like a good deal: good luck!
|
|
#
?
Apr 12, 2010 04:32
|
|
|
It's pretty hilarious, isn't it. When I was a kid, four of us lived in a ~900 square foot uninsulated four-room one-holer until I was 14 and it was perfectly fine. Now that I have a salary I live with one other person in 1400 sf and think of it as a "small house".
|
|
#
?
Apr 12, 2010 15:44
|
|
|
Yeah my wife and I bought this house, 1400 square feet. Three bedrooms, one and three quarters baths. It could easily handle a family of five (or more!), especially if we got rid of half of our junk. For several years (8?) my younger brother and I shared a bedroom, because our house had four and there were six of us until my older sister moved out. And then just look at like apartments in Japan, where you get four people living in one room with fold-down beds and tiny one-person-standing-only kitchenettes and poo poo. Not to say they don't feel crowded, I'm sure they do, but it meets their needs.
|
|
#
?
Apr 12, 2010 19:22
|
|
|
So I just put an offer in on a house on Sunday, was countered with some minor stuff which we then accepted and the paperwork goes in today. So hooray, I'm on the path to owning this house. Now I'm thinking is the time to do some lender shopping - right? I've had preapproval from Wells Fargo, but I'm only qualified with FHA from them and Bank of America. I can get a standard loan with my credit union, though. How do I go about this? Do I go through all of their full applications, then compare all the numbers and tell 2 of them to gently caress off? I keep hinting at each agent/broker/whatever that I'd like to comparison shop a bit with lenders but each one acts like they are the only person I'm talking to, or that I don't need to apply with anyone, they've "got me covered." So, how do I do this? I'm at the point now where everyone's asking for W-2's, paystubs, bank statements and what have you. Also, the seller's agent reduced our inspection time down from 17 days to 10, but we still have 17 days for our contingencies. My realtor explained this as "our offer resembled an offer to a bank, so the selling agent reflected a bank's style contract with a reduced inspection window." Well, not those exact words, but paraphrasing here. And the sellers are old, in their 90s, and the wife has brain cancer, so they need to get out and move to a facility. So anyway, my timetable is a little compressed here. Last question - any other lenders I should look into?
|
|
#
?
Apr 13, 2010 18:53
|
|
|
I used a loan consultant to find my lender; he worked for Guarantee Mortgage Corp in San Francisco, as an FHA specialist. The thing is, the exact rate you can get from any given lender varies from day to day, so the ideal situation is to have someone who can find whatever is a great loan on that particular day. It was also nice to only have to send all our financial info to one person, who could then forward it as needed. These kinds of agents are paid by the banks, so there's no impact on the cost to you. I can't really see a downside to that. If you're in the Bay Area, PM me and I'll send along a reference for my guy if you like. Otherwise, consider getting a specialist to help you get the best deal. Edit: regarding contingencies. If you run out of time and haven't finished inspecting something, you can request an extension. How you do this depends on how your contingency is set up in the contract. In some cases, it will expire automatically unless you actively send them an extension letter. In other cases, it is only released when you explicitly release it via a letter. Your real estate agent can help you manage that. Leperflesh fucked around with this message at 21:36 on Apr 13, 2010 |
|
#
?
Apr 13, 2010 21:33
|
|
|
I'm considering a condo in a building that is part of a Workforce Housing Program. The location is very good; it's in the suburbs, but surrounded by shops and within a few minutes' walk to/from the light rail that leads into Washington DC. To purchase one of the condos, you have to be approved by the county: Your income must be within 80%-120% of the Area Median Income (which is a range that changes based on the number of people in your household). It must also be your primary residence. If you meet those two basic requirements, you have the opportunity to purchase one of the condos for a price "under market value". The condos I'm looking at are appraised for $361k, and have a purchase price of $259k. The appraisal was done indepedently, but I'm still waiting to find out when the appraisal was done. (I'm skeptical about the appraisal numbers.) The catch is that when you sell the property, the county puts a cap on the profit you can make. The county caps the selling price at: (original purchase price adjusted for inflation based on CPI-U + 15% of the change in appraised value + value of home improvements). So if the house gains 10k in market value, you're only allowed to raise the price $1500 on top of your original price (adjusted for inflation). If the house loses value, you don't get penalized. Example: Original purchase price is 200k, original appraised value is 300k. Three years later, Appraised value is 320k, percent change in CPI-U is 5%. Max selling price is (200k * 1.05) + ((300k - 320k) * 0.15) = 213k You make a profit of 13k but then you pay some fees, the agents, etc. Thoughts or comments on this kind of program? It seems like it's only worth it if you really really want to live in that subdivision (which, admittedly, is very nice) but it's not much of an investment. Can't even rent out the entire place (primary residence requirement). At this point, why not just rent an apartment, right? lowcrabdiet fucked around with this message at 00:44 on Apr 14, 2010 |
|
#
?
Apr 14, 2010 00:38
|
|
|
Does the "max profit" include the 6% realtors are taking from you in commission when you sell and other costs associated like repairs or even HOA fees? I guess with a condo you shouldn't have all sorts of complications with inspections beyond maybe a water heater or something so you won't get dinged late in the selling process by that. Is there any upside to the purchase other than the supposed discount on the property? No closing costs? Low interest rates? I have this Google stock worth $300 and I will sell it to you for $200 but you can only sell it for $200 plus 5% of whatever it gains in the future! On the face that looks pretty terrible. There is one pretty big upside in that the housing market could lose 33% in value and you would lose nothing. You do have to trust that this appraisal price that they are discounting off of isn't bullshit. What do comps in the area look like? I'd be interesting in seeing how one of these programs affects surrounding property prices (MAH PROPERTAY VALUES  )You are right in the idea of "why not just rent an apartment" but that is more based off living in the south and not being able to wrap my head why anyone would ever want to own their own little apartment instead of an actual house with land that you can do stuff to and park things in. Speaking of renting, I assume there are rules that the property must be your primary residence at all times? Else you take the awesome deal and just rent it out for market value. I went through a loan program for some pretty awesome benefits (3%/30yr fixed , no closing costs, ability to do repairs as part of the mortgage a la a 203k loan) but I can't leave and rent it out, I would be forced to sell.
|
|
#
?
Apr 14, 2010 01:15
|
|
|
Leperflesh posted:Not to pick on you, because I'm sure what you meant was that you want that much space for your large family, but these kinds of statements always make me kind of chuckle. I'm actually english, so I am used to tinpot tiny houses. I used to rent out in the docklands in London and we were paying about a grand for like 400sq ft. I'm pretty used to tiny places! Yes, we could definitely fit in less space but american homes are, on average, much bigger and so there's no reason to cram ourselfs into a tiny area.
|
|
#
?
Apr 14, 2010 01:41
|
|
|
The max profit is whatever the numbers based on the formula are. The commission comes out of whatever you sell it for. The biggest upside is that you get to live in a really nice place that's really close to the metro. I'm obviously not totally protected if the house loses value either. The formula calculates the max price I can sell it at, but if no one wants to buy it at the max price, I'll have to settle for lower. But you're right in that the value has to drop to below my purchase price to really hurt me. Otherwise, I break even... at which point I might as well just rent, right? Regarding the appraisal value, I definitely think $361k is a bit high. I'd say $320-$330k is more fair. (Remember, the purchase price is 259k.) There aren't any close comps in the immediate area. There's a significantly smaller condo (but with a garage) listed at $310k but it's been on the market for a while. However, that condo is a lot farther from the shops (15 walk from both the shops and the metro station). This condo in the Workforce Housing Program (WFH) is literally over a doctor's office, a print shop, and some other mom and pop type stores/restaurants. It's also less than a minute's walk from the grocery store. The surrounding property values shouldn't be affected that much. It's a WFH program, not section 8 housing. The minimum income to live there is something like 48.5k if there is one person in your household at the time of purchase (household includes kids too). It goes up to 55.5k if there are two people in the household (two adults OR 1 adult 1 child). And it goes up even higher the more people you have in a household. So you do need a decently paying job to live there. Also, because of the profit cap, I'm sure other owners in the area don't care too much that the WFH is selling for cheaper since the WFH owners wouldn't be making much (any?) money if the market goes up. If it's not my primary residence, I would have to send a written request to the county explaining why I have to move out of the area (either employment or health reasons). The county will then set up the leasing agreements (they will set the rent to not exceed the PITI + condo fees + "reasonable" expenses related to maintaining the unit). However, I can rent out a room (which I plan to do wherever I end up buying). As someone who has lived in cities and suburbs, I just really prefer not having to drive everywhere. I miss it when I could just run across the street for a jug of milk/eggs/whatever instead of the hassle of driving. Also, being able to take the subway to work and beat DC area traffic is a huuuuge plus. edit: Also, there are no closing costs. The units used to be rentals, but the county got together with the developer to turn them into condos for the WFH program. They are being completely renovated (new hardwood floors, new cabinets, new kitchen, new applicanes, new bathrooms) and will have a warranty. lowcrabdiet fucked around with this message at 01:58 on Apr 14, 2010 |
|
#
?
Apr 14, 2010 01:52
|
|
|
lowcrabdiet posted:The max profit is whatever the numbers based on the formula are. The commission comes out of whatever you sell it for. The biggest upside is that you get to live in a really nice place that's really close to the metro. Ok so lets say your max profit is $5,000 so you list it for $264K + 6% to pay the realtors. Then during inspection your client realizes the water heater is 10 years old and the AC unit isn't as efficient as they want or they want a new dishwasher because they feel like it (IE the same sort of negotiating that goes into any other deal). In a normal situation you would have to cave into the buyers demands, counter-offer, or walk away. Or is all of this moot because the program would be doing that sort of negotiating for you beforehand? lowcrabdiet posted:The surrounding property values shouldn't be affected that much. It's a WFH program, not section 8 housing. The minimum income to live there is something like 48.5k if there is one person in your household at the time of purchase (household includes kids too). It goes up to 55.5k if there are two people in the household (two adults OR 1 adult 1 child). And it goes up even higher the more people you have in a household. So you do need a decently paying job to live there. Also, because of the profit cap, I'm sure other owners in the area don't care too much that the WFH is selling for cheaper since the WFH owners wouldn't be making much (any?) money if the market goes up. I wasn't looking at it as a Section 8 next to Fancy Highrise comparison but more of a $340K condo next to a $270K condo comparison. If I assume there is similar living space next door currently selling for $340K that has similar or worse access to public transport/commerial areas I can't see that building selling at $340K for very long. If you can get a similar, maybe even better, place next door that is price controlled in the $200's the only way you will ever sell is if the top-income cutoff is very low creating an upper class group of buyers that are simply excluded from purchasing the WFH condos. I don't think you have to worry too much about the lower end of the spectrum because no one making $55.5K/yr should be buying a $260,000 home in the first place. You said the range is 80-120% of median income which would put the top income for a 2 person family at $83,250? That actually sounds somewhat reasonable for a couple to purchase a $260K starter home in the DC area. Sorry if this is a giant big derail. After thinking it over from your perspective if it is significantly cheaper than renting a similar apartment and has everything else you want, it seems like an excellent way to get affordable housing that is unlikely to ever lose value but won't gain you any, ever. But if you can find a similar rental I wouldn't bother with all the trouble of buying a place and going through with a program like that. Make sure to take into consideration HOA fees, property taxes (on the full appraised value I'm sure), and maintenance into your savings calculations. Plus there is the comedy option of the county disbanding the WFH program, removing all the liens that would exist to enforce these profit rules, and you get to sell at full value!
|
|
#
?
Apr 14, 2010 02:51
|
|
|
I did think of one other potential nastiness. Assume the surrounding property value drops 25% whether it be WFH driving down prices or just a continuing of the housing bubble deflating. Now you are still trying to sell your $269K home vs a $280K (formerly $370K) home next door. I can understand taking the downsides of this program if you are saving $100K, but no one is going to bother if they are only saving $10-20K. Any sort of price adjustment in the surrounding market will affect your homes value in the program. It doesn't sound like it has much potential to me anymore.
|
|
#
?
Apr 14, 2010 02:58
|
|
|
|
| # ? May 17, 2024 02:03 |
|
|
Arzakon posted:Ok so lets say your max profit is $5,000 so you list it for $264K + 6% to pay the realtors. Then during inspection your client realizes the water heater is 10 years old and the AC unit isn't as efficient as they want or they want a new dishwasher because they feel like it (IE the same sort of negotiating that goes into any other deal). In a normal situation you would have to cave into the buyers demands, counter-offer, or walk away. Or is all of this moot because the program would be doing that sort of negotiating for you beforehand? This is actually the first point I brought up with the sales rep. She responded that the CPI-U is a big factor in driving my max sell price up. In 2009, the CPI-U increased by 2.7%. If I purchased at 260k, I could sell at $260000*1.027 (which is ~$267k)+ 15% of change in market value. If CPI-U increases ~2.5% a year, then that's not an insignificant amount either if you sell after a few years. I mentioned that that's basically just keeping up with inflation, and that it's only worthwhile assuming the market doesn't devalue even further. Arzakon posted:Plus there is the comedy option of the county disbanding the WFH program, removing all the liens that would exist to enforce these profit rules, and you get to sell at full value! Coincidentally, the director/chairman guy of county planning went on the local NPR show and mentioned this WFH program and that they're trying to hoping it to other neighborhoods near other metro stations. But this requires a huge amount of subsidies from the county to the developers and I feel that it's unlikely that's ever going to happen. The program hasn't really been well advertised and I get the feeling that in this market, they're just trying to get people into these units so they're not empty once they've finished renovations. Even with the homebuyer tax credit expiring, they have at least 20 out of 49 units still for sale. I believe that the program has been going on for at least a year now. Arzakon posted:I wasn't looking at it as a Section 8 next to Fancy Highrise comparison but more of a $340K condo next to a $270K condo comparison. If I assume there is similar living space next door currently selling for $340K that has similar or worse access to public transport/commerial areas I can't see that building selling at $340K for very long. If you can get a similar, maybe even better, place next door that is price controlled in the $200's the only way you will ever sell is if the top-income cutoff is very low creating an upper class group of buyers that are simply excluded from purchasing the WFH condos. I don't think you have to worry too much about the lower end of the spectrum because no one making $55.5K/yr should be buying a $260,000 home in the first place. You said the range is 80-120% of median income which would put the top income for a 2 person family at $83,250? That actually sounds somewhat reasonable for a couple to purchase a $260K starter home in the DC area. Actually, the 55.5k/yr guy would only be eligible to buy the $206k-209k units reserved for the households in that income range. Those units would be slightly smaller and in a less popular location. According to the program, to purchase a $260k unit with 2 people in the household, the max is $79,000/yr combined gross income. In the highest bracket, for a single person the max is $83,000/yr, but you would only be eligible to buy in the $280k+ range. The $280k houses are appraised at ~400k. (I should just draw out the chart since it's so much easier to understand that way.) I agree that this would be a merely OK deal if the market values stay the same or increase. But if prices go down, it could get dangerous if you have the need to sell. lowcrabdiet fucked around with this message at 03:59 on Apr 14, 2010 |
|
#
?
Apr 14, 2010 03:56
|
|