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The entire Philadelphia area is like that, bands of good areas then bands of not-so-good areas that are in close proximity to each other. I live in Media and a half mile south is not a place I would dare to live, half mile north are million dollar homes.
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Feb 14, 2011 20:37
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I found an old foreclosure property. It's 3 Bedroom, 2 Bath. They've been hacking the price on it since it was listed originally for about $100k. It's slowly been lowered down to $55k. Median price for the city is currently $140k. Median price for the neighborhood is about $90k. It's in pretty good condition. There are only a few minor problems, but nothing that makes it unlivable. The mortgage payments would only be $250 a month. Annual taxes are estimated at about $1,000. Insurance I don't have a ballpark on. Can have a couple of contractor friends look at it and the proposed contract includes a home inspection clause. I can rent out a room to a friend for $400/mo and that will cover taxes/insurance/repairs. I'm buying it to live in for now but was considering using it as a rental property if I ever had to move. Does anything about this situation affect the typical advice of DO NOT BUY one way or another?
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Feb 15, 2011 03:07
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How do you know it's in pretty good condition? That is to say, have you paid for an inspection, or are you just going based on what you can see? Because it's entirely possible that the reason it's been passed on for so long is that it has one or more very serious problems. Stuff like a cracked foundation, or sewer pipes leaking below ground, or termites throughout, or something. It's also possible the title is encumbered in some way, or back taxes are owed, or something like that. What I'm getting at is, it sounds like something worth moving forward with tentatively, but definitely be thorough and suspicious with your inspections and stuff. At $55k you're looking at what, a ten year mortgage? Fifteen maybe? Can you put $11k down and avoid PMI? It's pretty drat cheap if there really is no serious problems with it.
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Feb 15, 2011 07:47
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DO NEVER BUY advice is heavily contingent on your personal financial situation. Do you make enough money to have a good downpayment, extra money every month to save on fixing it up, actually want to live there instead of looking at it like a rental property, and on and on and on. Give more information.
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Feb 15, 2011 14:28
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Leperflesh posted:How do you know it's in pretty good condition? That is to say, have you paid for an inspection, or are you just going based on what you can see? There is no mortgage. I'd be buying it straight up in cash. I have two contractor friends who are going to walk through it with me AND recommend me certified home inspectors. The contract being proposed includes a home inspection addendum that allows us to back out if the inspection reveals problems not previously disclosed. I plan on hiring two inspectors to examine it just to be extra careful, since it is an older house. EDIT: The taxes shouldn't be an issue. The contract says that all taxes/payments/fees will be current by closing date. Stunt Rock fucked around with this message at 16:31 on Feb 15, 2011 |
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Feb 15, 2011 15:58
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The person who brought up back taxes raised a good point, when I bought my building they tried to stick me with a few years worth of taxes from the last owner who stopped paying, but I was able to get out of it before I bought.
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Feb 15, 2011 16:10
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Stunt Rock posted:There is no mortgage. I'd be buying it straight up in cash. I have two contractor friends who are going to walk through it with me AND recommend me certified home inspectors. The contract being proposed includes a home inspection addendum that allows us to back out if the inspection reveals problems not previously disclosed. I plan on hiring two inspectors to examine it just to be extra careful, since it is an older house. How much are the taxes yearly? What do rentals in the area go for? If you are paying cash this hardly seems like something that will bankrupt you. If rents are decent or you want to live there for a while it doesn't seem like a bad idea.
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Feb 15, 2011 16:43
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Looking up owed taxes is as simple as calling the assessor or treasurer. Those balances are public records available to anyone. Find out if your neighbors are deadbeats or not. Most are even available online so you won't even need to talk to another human.
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Feb 15, 2011 20:57
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Stunt Rock posted:The mortgage payments would only be $250 a month. Stunt Rock posted:There is no mortgage. I'd be buying it straight up in cash. ? If you can buy it with cash and rent a room for $400 a month, you can live there for free or the cost of maintenance. This is the opposite of a bad financial decision.
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Feb 15, 2011 21:40
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LloydDobler posted:? The payments on a mortgage (if I had one) would only be $250.00. Sorry for the confusion.
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Feb 15, 2011 22:26
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Just put in an offer for a house. Thanks everyone for all the advice in this thread. I have ignored almost all of it. How likely is it that the owner is just going to sit on this offer for a bit and see what else comes in? I've only offered a small amount below asking (because the house has been substantially reduced already), and am hoping he'll bite asap. Yep, the main reason I'm buying is because I'm desperate to get out of where I'm renting now. Luckily I have "job security" and can afford to put ~50% down. Haven't slept in days. This is very stressful.
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Feb 16, 2011 12:00
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sassassin posted:Just put in an offer for a house. Thanks everyone for all the advice in this thread. I have ignored almost all of it. Great. quote:How... So you ignore everyone's advice, then ask for it again? Balls.
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Feb 16, 2011 12:15
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Jokes how do they work? Turns out the guy was eager to accept all my future earnings. Financial ruin awaits!
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Feb 16, 2011 14:25
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sassassin posted:How likely is it that the owner is just going to sit on this offer for a bit and see what else comes in? I've only offered a small amount below asking (because the house has been substantially reduced already), and am hoping he'll bite asap.
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Feb 16, 2011 16:28
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sassassin posted:Jokes how do they work? Don't worry, it was obvious to me that you were joking. That said, you didn't provide enough detail for anyone to give you any kind of reasonable answer beyond a wild-assed guess, so I guess it's good you got your answer right away. (Things like, what market are you buying in, is it a busy or stale market, how much money are we talking, what's the condition on the house, why has it been recently reduced, is it a short sale or not, etc.)
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Feb 17, 2011 00:16
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My agent called me up today (after I got all the paperwork signed and the earnest money check ready) and told me that there was another bid on the house last minute and they're also paying cash for near the full amount. It immediately smelled of bullshit. Is this a common tactic to try to increase an offer?
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Feb 17, 2011 03:13
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Stunt Rock posted:My agent called me up today (after I got all the paperwork signed and the earnest money check ready) and told me that there was another bid on the house last minute and they're also paying cash for near the full amount. All I can say is my parents had the same poo poo pulled on them a few years ago. It's odd how a house can be on the market for MONTHS and the day you decide to put in the papers someone else does too. And guess what, they're offering more!
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Feb 17, 2011 03:18
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sassassin posted:Just put in an offer for a house. Thanks everyone for all the advice in this thread. I have ignored almost all of it. Also the time it takes for the owner to respond depends on how desperate he's wanting to get out and/or how long the house has been on the market. Because it's a buyer's market right now, I would have lowballed him. In my case, I lowballed the owner and she counter offered. She bought the house in 2004 for 208k. She put the house for sale at 214k in Oct 2010. She dropped the price to 174K late January and I put down a lowball offer of about 145k or something. She countered with 167K and I accepted. I probably could have counter offered again, but that might have been pushing it. The house was visibly in very good shape and only 10 years old (which is still fairly new). At her 167k counter offer, she was already losing 50k on the house which is fairly significant for us poorer types. Brand new the house sold for 144k in 2001, so I'd say I have a decent deal right now. Even the real estate agent told me my original offer was kind of insulting 
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Feb 17, 2011 04:59
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Things that do not matter in the slightest when determining the present market value of a house: -How much the previous owner paid -How much it sold for when new -How much the owner is losing -How insulted anyone may or may not be What matters is what the market determines is the price, period. Here's the thing: when you bid on a house and win that bid, you are generally the highest bidder (unless you're paying cash and therefore getting a better price than some higher bidder with a mortgage, which can happen sometimes). So if you bid $X and nobody will bid more than that, the seller can either take your offer or not sell. If they have no choice but to sell right now, then they have to take your offer. A counteroffer is basically a statement that the seller wants you to believe they're not willing to sell at all if your initial offer is all they can get. E.g., they can afford to take the house off the market. Sometimes that's true and sometimes it's not, and there's usually no good way to tell. I, for one, would not spend tens of thousands of dollars to make sure a random stranger takes less of a crippling loss on their house. I make charitable donations that I can afford, but they sure aren't in the tens-of-thousands range, and I try to find more deserving causes than some random middle-class American's personal finances. What I'm getting at is that it's entirely possible, based strictly on the information that you've provided, that you overpaid. Perhaps by a lot. What you haven't mentioned (and is key) is what the house appraised for when you did your appraisal. (You did do an appraisal, right?). If it appraised, at the time you bought it, for more or equal to what you paid, then that indicates you may have gotten a good price. Everything else you mentioned is essentially meaningless. e. Your basic point, though: that it's OK to bid low, is correct. Assuming you're willing to lose the bid to someone else. Which you should be, because there are many, many houses out there, and there's no such thing as "the one". Leperflesh fucked around with this message at 06:20 on Feb 17, 2011 |
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Feb 17, 2011 06:16
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sassassin posted:Jokes how do they work? It is a mystery 
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Feb 17, 2011 08:52
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Leperflesh posted:Things that do not matter in the slightest when determining the present market value of a house: When I put in an offer, I of course took in consideration of its comps, any upgrades, age of house, size, area and other things (aka market value). Compared to houses that sold in the same neighborhood that was built by the same construction company within 6 months, I'll be closing $20/sqft less. Could have I gotten a lower price? Maybe if I countered again, but I didn't want to risk the time for other buyers to swoop in and take it away. I have not yet paid for an appraisal. Probably early next week is when it will be done.
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Feb 17, 2011 09:22
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ijii posted:I have not yet paid for an appraisal. Probably early next week is when it will be done.
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Feb 17, 2011 13:47
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Every 'offical' valuation I've heard on properties I've looked at over the past few months have been ridiculous. They're just arbitrary numbers at the end of the day.Leperflesh posted:That said, you didn't provide enough detail for anyone to give you any kind of reasonable answer beyond a wild-assed guess, so I guess it's good you got your answer right away. I know, I only really posted because I has all hyper and anxious about putting an offer in. I probably could have gone lower with my offer, but didn't for a few reasons. There'd been a lot of interest in the house since its reduction for one (a couple were on a second viewing when I first saw it, the owner had already rejected an offer), and the owner had managed to tell me with a straight face that he didn't see any reason to come down from his asking price because of that. There's also quite a bit of work the owner is going to do to it as part of the sale agreement (trimming of an overhanging tree, installation of new boiler, new carpets etc.) and I'd prefer not to give him a reason to half arse it :P It's also cheap for what it is (three bedroom detached) and within my budget. gently caress it, I've wasted more money on less before I guess.
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Feb 17, 2011 17:33
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ijii posted:Could have I gotten a lower price? Maybe if I countered again, but I didn't want to risk the time for other buyers to swoop in and take it away. It sounds like we're in agreement then - I guess I was more responding to the general notion of what does and does not matter when determining price, and I misunderstood what you were trying to say. Dik Hz posted:To me, appraisals seem kinda like a scam if you're an educated buyer. I understand the need for them, and how they protect both the buyer and the lender. An asset is worth what someone is willing to pay for it on an open market. So if you're the highest bidder, the house is worth exactly what you're willing to pay for it. And you just paid several hundred bucks for this lesson in microeconomics. I disagree, but only in degree; I think that some appraisals are probably unnecessary (such as a house in a newer development, where you can just look at the recent sale prices of identical houses in that development). But in many cases the appraisal can reveal information that the buyer and, especially, the lender, were not necessarily aware of. My appraisal included not just comps, but also an assessment of the local market. It showed how long average houses had been on offer before selling, and showed that that statistic had been trending downward for the last nine months. It showed that the market for houses in my specific size and price segment was more active than that for both more expensive houses, and for the cheaper apartments and condos that are nearby. Ultimately, though, the appraisal put a lot of weight on what my offer had been and that the seller had accepted it. Which is appropriate, because as you say, the fact of that agreed-upon transaction is strong evidence that the agreed price represents the market's decision about valuation. What is harder is when someone is trying to decide what to offer. It is possible to pay a few hundred dollars for an appraisal to use as a key piece of information when deciding what to offer; I did not do that, and I think most people don't, but I'm not sure if it wouldn't be pretty helpful especially in situations where there are no other bidders, or loads of other bidders; it could help you decide what would be a reasonable but not extraordinary/stupid bid.
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Feb 17, 2011 21:38
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Stunt Rock posted:My agent called me up today (after I got all the paperwork signed and the earnest money check ready) and told me that there was another bid on the house last minute and they're also paying cash for near the full amount. Probably the oldest trick in the book. Not saying it's true in your case, but it does happen. I would not get into a bidding war in this current buyer's market. If there is another all cash offer and you are doing a loan you have probably lost the house already anyway. If you want the house just submit your offer as it is and set it to expire in 48 hours or so. If you get a counter offer you can be pretty sure there was no other higher offer.
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Feb 17, 2011 23:23
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Dik Hz posted:So if you're the highest bidder, the house is worth exactly what you're willing to pay for it.
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Feb 18, 2011 01:12
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I just want to add my experience and vent DO NEVER BUY I bought a 100k condo in 2007 which I thought was a pretty good deal. Why did I think it was a good deal? Because the previous owner had bought it in 2000 for 200k brand new and refinanced for ~250k before foreclosing and losing it to the bank. I thought wow the mortgage payments are significantly less than renting! 600 mortgage with 20% down vs 1200 rent! I would be stupid not to do this! After all, the price can't fall much more! Well... I got a new job and had to move. Now looking at the similar listings in the same development, identical foreclosed condos(exact same floorplan) are now listing for 80k and there's 5 of them that have sitting there for at least 6 months even with that price. I'm now stuck with HOA fees for approximately 3000 a year with property taxes also approximately 3000 a year. Include the utilities that I'm no longer using but paying for adds about 1000 a year. 7 grand a year for a place that I'm not living in and can't sell and doesn't even include mortgage payments. I estimate that it'll sell for 70k if I'm lucky. Here's the breakdown assuming a sale at 70k 30k (amount I'm underwater on) 7k closing costs(rough estimate of 10%) 21k (utilities + HOA + taxes x 3 years) 12k interest(at ~5%) ------------------------- 70k And the figure is still climbing for living there for 36 months which comes out to 2000 per month. I didn't include the appliances I bought. I had a pretty good mortgage with no closing costs or points and free appraisal(thank you penfed). A similar apartment would have only cost 1200 per month. If I rented, the savings would have been at least 27k over 3 years and there wouldn't be a headache now. The only redeeming thing about the situation is that I'm cheap and single(these two might be related) and have a good job(stable but who can say) and I can afford it. Needless to say, I won't be looking to buy a house for a while. And of course, this condo is in Michigan. That's why the taxes are so drat high.  DO NEVER BUY
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Feb 18, 2011 13:19
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Yeah, condos suck. I've heard so many sad stories about bad condo & townhouse investments. Any chance you could rent it out, rather than selling?
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Feb 19, 2011 01:18
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Sorry if this has been asked recently, but I'm interested in any kind of advice on how to speed up a short sale... I recently moved to another state and wanted to buy a house, especially since none of the rental properties here interested me. I was pre-approved for a loan before I arrived. I also met up with a realtor, looked at a bunch of houses and made an offer on one literally as soon as I got here. The house is a short sale, but the realtor lead me to believe it would move quickly, as she claimed she has done several short sales with this particular bank that also moved quickly. The owners accepted the offer on Jan. 15 and I have not been able to get any information since then other than it is awaiting approval from the bank. In the mean time, I am living out of vacation rentals, which even though it is less expensive than hotels it isn't exactly cheap, and is about to get even more expensive with spring break season approaching. Also, my all my belongings and both my dogs are 1000 miles away waiting for me to get a house. My loan approval expires at the end of March so if I can't get a contract by the end of this month I am pretty much screwed. I'm not willing to get another loan and stretch this out beyond March. Plus, I miss my dogs.  I realize I made a horrible mistake putting an offer on a short sale in my situation, and that there probably isn't much I can do, but any suggestions are welcome.
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Feb 19, 2011 16:22
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xorex posted:I realize I made a horrible mistake putting an offer on a short sale in my situation, and that there probably isn't much I can do, but any suggestions are welcome. I can't comment much on the short sale, but you should come to terms with the fact that you may need to rent something in this new area and work on finding and buying a place during that time. You say you are staying in vacation rentals, are there normal rental properties in your area that can be rented month to month, instead 1-2 year leases?
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Feb 19, 2011 16:48
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senor punk posted:I can't comment much on the short sale, but you should come to terms with the fact that you may need to rent something in this new area and work on finding and buying a place during that time. You say you are staying in vacation rentals, are there normal rental properties in your area that can be rented month to month, instead 1-2 year leases? I'm actually going to look at normal rentals today so I'll at least have a couple places in mind when the short sale does fail. I doubt I'll find anything month-to-month, maybe not even 6 month unless I look at apartments, but it's something I'll keep in mind. I would really like to eventually buy in this area, but was trying to avoid moving twice. Looking back I know it would have been easier if I had just went that route originally.
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Feb 19, 2011 17:14
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xorex posted:I'm actually going to look at normal rentals today so I'll at least have a couple places in mind when the short sale does fail. I doubt I'll find anything month-to-month, maybe not even 6 month unless I look at apartments, but it's something I'll keep in mind. I would really like to eventually buy in this area, but was trying to avoid moving twice. Looking back I know it would have been easier if I had just went that route originally. Look on Craiglist for people renting out homes - just don't buy a home in an area you haven't even lived in yet! Get a feel for the place first, and after a few years if you feel the time is right and you know which neighborhoods are good and which aren't, then purchase.
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Feb 19, 2011 19:29
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So I just did my taxes, and got to see how much of a difference owning a house makes (an extra $4170!!). That ontop of what I get in rent from my roommate who rents out my 2nd bedroom has made me realize that owning can actually work out pretty well. In my case, assuming I did the math correctly, in 2010 the actual cost to me for my mortgage + co-op fees was only $630 a month.
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Feb 19, 2011 20:42
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How the jesus did you save $4170 in taxes while paying an adjusted $630 in mortgage/fees? $12000 in taxes/interest deductions a year might get you $4000 back in taxes but that's almost $700/mo. I saved about $300 on my state taxes from owning. My taxes and interest plus other deductions just barely got me up to the federal standard deduction, and went way above the state's.
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Feb 19, 2011 21:08
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Arzakon posted:How the jesus did you save $4170 in taxes while paying an adjusted $630 in mortgage/fees? $12000 in taxes/interest deductions a year might get you $4000 back in taxes but that's almost $700/mo. The big thing is the money I get from my roommate/tenant, which is $10,200 a year. Keeping the math relatively short: Annual mortgage cost = 14600 Annual Co-op fees = 7300 Total = ~22,000 Subtract the 4100 in tax savings and 10,200 that I get from my roommate and I only ended up paying 7500 out of pocket, or 630 a month.
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Feb 19, 2011 21:15
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Ah, that makes a lot more sense, was worried I was missing some huge deduction I shouldn't be.
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Feb 19, 2011 21:27
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senor punk posted:The big thing is the money I get from my roommate/tenant, which is $10,200 a year. You are counting that money from your roommate as rental income, right?
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Feb 19, 2011 21:28
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Also, are you prorating based upon square footage? That's a common mistake that people mistake you could be rightfully audited on. You can't deduct 100% of your co-op / HOA dues when the guy takes up 1 bedroom out of, say, 5 of you 2600 sqft place. Similarly, I can't deduct half my rent as business expenses for a home office when it takes up a closet or if I occasionally sleep in it or use it as a guest bedroom. Granted, nobody from the IRS is going to come over and see if you're sleeping in your home office or something, but do try to be sensible. poo poo's complicated living in a place you're partially renting out, yo.
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Feb 19, 2011 21:36
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I itemized this year, my first year of home ownership, and it was only 2K more than the standard deduction. This year I got to count points and other first year home purchasing deductions. Next year I doubt I'll go over the standard deduction, so my tax situation won't be as good next year.
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Feb 20, 2011 04:33
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skipdogg posted:Next year I doubt I'll go over the standard deduction, so my tax situation won't be as good next year. Check your state standard deduction even if you are a little below the federal standard. My deductions totaled $200 less than the federal which cost me $30 but by itemizing I got to take $11,200 itemized instead of $3000 standard on my state taxes. That saved me almost $500 in state taxes, it could just be Georgia having a super lower married standard deduction though.
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Feb 20, 2011 04:51
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