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greasyhands posted:How all the people in this thread honestly believe renting will make you more money than buying is absolutely boggling. I believe most generally don't believe you'll make money renting, just that home buying shouldn't be viewed as making money. Sure, you may get a tiny return on your purchase...in favorable conditions, but most here are arguing against the false idea that home buying is a good investment. Renting has its own obvious drawbacks. Thwomp fucked around with this message at 21:14 on Feb 24, 2011 |
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Feb 24, 2011 21:04
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The main problem for buying is that most of the people on this forum are young and not really ready to settle down. If you move in under seven years, it's a great way to piss away thousands of dollars in transaction costs for an asset you have very little equity in. Especially when you're exposed to the risk of the market falling.
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Feb 24, 2011 21:14
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Well you can't look at it like "if I buy a house will it return as much as buying 1000 shares of Berkshire-Hathaway" because it's money you have no choice but to spend on a place to live. You have to either rent or buy because you have to have a place to live- so if you run the numbers (I think I ran the numbers giving significant non-real world advantages to rent such as no rent increases over long periods of time) you see buying is generally better- that's what this thread should be about, not whether or not housing beats stock market returns or whatever other "investments".
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Feb 24, 2011 21:39
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greasyhands posted:Then there are no landlords in your area because that would not be a profitable investment. But I'm guessing that isn't true. Also, if you live in Detroit or some decaying Ohio town, yeah things are different but you can also buy a house for much less than 150k Also, for instance, I have to re-do the bathrooms and kitchen soon, and that alone would be like $40k, or ~220 a month over 15 years. You are budgeting $300 a month for all maintenance and taxes. quote:How all the people in this thread honestly believe renting will make you more money than buying is absolutely boggling.
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Feb 24, 2011 21:44
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gvibes posted:I'm thinking condos, I guess. There are no $150k houses within like an hour of here. But I have around a ~$300k condo, and based on comparables, I don't think I could get much over $1500 a month in rent. And there are like 1000 rental units within two blocks of my home, so there are plenty of landlords. A $40k remodel of your bathroom and kitchen is a personal choice (you can make needed repairs for much less than that), and if you want to do that, cool. It's yet another advantage over renting- you can do what you want with the place. And, in my eyes, a condo is never a good investment and I can't understand why people buy them as anything other than a vacation home when they're already rich and don't really care about the numbers. I have to say, I don't understand large cities and their real estate markets. They make no financial sense- sure wages are higher in those areas, but from what I've seen they don't come anywhere close to closing the COL gap. I guess for people in those markets the argument changes significantly. I live in Texas and I just bought a 1900 sq ft. 1967 house with a fireplace and a nice bulletproof concrete swimming pool and a new roof,new carpet, and new kitchen and bath (they're builder grade but new and solid) for $120k. edit: I should say large *coastal* cities because my city has 700k people in it. greasyhands fucked around with this message at 22:08 on Feb 24, 2011 |
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Feb 24, 2011 22:04
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greasyhands posted:A $40k remodel of your bathroom and kitchen is a personal choice (you can make needed repairs for much less than that), and if you want to do that, cool. It's yet another advantage over renting- you can do what you want with the place. You live in Texas.......sorry, that was mean. Markets are different. What can you say?
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Feb 24, 2011 22:07
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greasyhands posted:And, in my eyes, a condo is never a good investment and I can't understand why people buy them as anything other than a vacation home when they're already rich and don't really care about the numbers. For most, a condo is the only affordable thing they could get as houses at a reasonable standard of living here goes for more then 400k. There are properties in other part of Canada where they become cheaper the more remote the area is (ie: Prince George or Squamish compared to Burnaby or Coquitlam in British Columbia). The drawback of this is the availability of professional jobs (ie: working for a large corporate office) between the two comparable areas. This is in Canada tho, so it's not necessarily the norm for USA. e: I am an illiterate child. You were talking about condos being a bad -investment-, not a place to buy to live. 
quaint bucket fucked around with this message at 22:40 on Feb 24, 2011 |
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Feb 24, 2011 22:14
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greasyhands posted:A $40k remodel of your bathroom and kitchen is a personal choice (you can make needed repairs for much less than that), and if you want to do that, cool. It's yet another advantage over renting- you can do what you want with the place. I like condos because I can live walking distance from work, grocery, school and practically anything else. No 1 hr commutes. I don't have to worry about maintenance. If a boiler breaks down or snow needs to be shoveled, it is taken care of for me. I don't have to worry about security. If my dishwasher breaks I can call the engineer and he'll fix it for me. There are no stairs - all the space is on one level. There are no huge energy bills.
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Feb 24, 2011 22:44
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greasyhands posted:A $40k remodel of your bathroom and kitchen is a personal choice (you can make needed repairs for much less than that), and if you want to do that, cool. It's yet another advantage over renting- you can do what you want with the place. greasyhands posted:And, in my eyes, a condo is never a good investment and I can't understand why people buy them as anything other than a vacation home when they're already rich and don't really care about the numbers. There aren't any single family homes as close to work as my office is, but if there were, it would likely cost millions. I should have followed my own DO NEVER BUY advice, but I was an idiot.
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Feb 24, 2011 23:12
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Lyesh posted:The main problem for buying is that most of the people on this forum are young and not really ready to settle down. If you move in under seven years, it's a great way to piss away thousands of dollars in transaction costs for an asset you have very little equity in. Especially when you're exposed to the risk of the market falling. This is really what the thread is about. If your home appreciates a couple percent a year and you stay for 5+ years then you will do better off than renting, but neither of those are a guarantee. I have a friend that is moving and is trying to short sale his house his bought in 2005 @ $450K for $350K. 2005 was a great time to buy...in 2005. Now in 2011 we see that 2005-2007 was a terrible time to buy your first house. The big advantage of buying a home is dependent on the home appreciating, which, as we've seen in the past couple of years, is not a guarantee.
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Feb 25, 2011 01:32
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greasyhands posted:I have to say, I don't understand large cities and their real estate markets. They make no financial sense- sure wages are higher in those areas, but from what I've seen they don't come anywhere close to closing the COL gap. I guess for people in those markets the argument changes significantly. I live in Texas and I just bought a 1900 sq ft. 1967 house with a fireplace and a nice bulletproof concrete swimming pool and a new roof,new carpet, and new kitchen and bath (they're builder grade but new and solid) for $120k. Well here's the answer to all our problems! How the hell can you say condos are a bad deal, and then outright say you don't understand the large costal city market? I've lived in NYC for 3.5 years, or the majority of my independent adult life. You can not buy anything in NYC for $120k. Period. You might not care for condos, but when you want to own in Manhattan, unless you have at least $5m to buy a townhouse somewhere, you will be buying a condo or co-op. End of story. So how about you stop talking with such authority on things that you admit to not having a great understanding of?
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Feb 25, 2011 03:00
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senor punk posted:Well here's the answer to all our problems! How the hell can you say condos are a bad deal, and then outright say you don't understand the large costal city market? I've lived in NYC for 3.5 years, or the majority of my independent adult life. You can not buy anything in NYC for $120k. Period. You might not care for condos, but when you want to own in Manhattan, unless you have at least $5m to buy a townhouse somewhere, you will be buying a condo or co-op. End of story. So how about you stop talking with such authority on things that you admit to not having a great understanding of? Don't understand as in "I don't know what people are thinking.", relax. I lived in Seattle for a while and the city was nice but it just didn't make sense to live there because I wanted to buy a house and have a yard but don't want to live way out in a suburb... so I moved, and found a job elsewhere where things aren't priced absurdly (and Seattle isn't even that expensive relative to other expensive cities) and I can get what I want, instead of getting hosed on some 800 sq ft condo. greasyhands fucked around with this message at 03:12 on Feb 25, 2011 |
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Feb 25, 2011 03:09
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greasyhands posted:Don't understand as in "I don't know what people are thinking.", relax. I lived in Seattle for a while and the city was nice but it just didn't make sense to live there because I wanted to buy a house and have a yard but don't want to live way out in a suburb... so I moved, and found a job elsewhere where things aren't priced absurdly (and Seattle isn't even that expensive relative to other expensive cities) and I can get what I want, instead of getting hosed on some 800 sq ft condo. It's all relative man, and just because you don't think an 800 sq ft condo is worth $600k doesn't make it a rip off. The market for real estate for certain cities is such that that is the reality. The people who think that is acceptable and can afford it pay it, and the people that don't or can't live somewhere else. It sucks for everybody that would like to live there but can't afford it, but that's how a free market is supposed to work, right?
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Feb 25, 2011 03:17
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His assumption also was that an owner must charge enough in rent to pay for 1% of the house's present value. That's just not the case. An owner only has to pay his actual costs. An owners actual costs are based on the price they paid for their property, when they bought it, and how long they've owned it, and what the local taxes are like, and how much actual maintenance it needs. My previous landlord rented out a property containing a small house and a newer apartment over two garages, for a combined total of about $3500 a month. This property was in a fairly wealthy neighborhood and, even after the downturn, he could easily sell them for $600,000 or more right now. How can he afford to do that? Well, he owns the property outright. He bought it like 40 years ago. The house was built in the 1950s, it's single-level and well made and the maintenance costs are (or have been so far) very low. The apartment is from the 1970s and has needed basically no maintenance at all, aside from the occasional coat of paint. Rationally they should have sold. I don't know why they don't. They'd make more money that way. But the theory that everyone always acts rationally is, I should hope by now, pretty thoroughly debunked. Especially when it comes to things people have emotional attachments to, like "homes". What I'm getting at here is a larger point, though: whether or not buying will be better than renting depends on the location, the market segment, and the financial situation of the buyer; plus, the unforeseeable vagaries and unknowns of the murky, uncertain future. If you want to maximise your wealth, live in a cardboard box and invest everything in a well-diversified portfolio of mutual funds, securities, and bonds. If you want to enjoy a certain lifestyle and quality of life, make a decision about renting or buying based on that; what you can afford, and how you want to live.
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Feb 25, 2011 03:19
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gvibes posted:My cabinets are literally disintegrating, my countertops are cracked in multiple places, and all my appliances are 15 years old and on the verge of death. I'm not sure what else to do with the kitchen. Not to derail, but are you looking at spending $40,000 on a kitchen and bathroom remodel in Chicago? Because if that is the case, you really need to shop around.
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Feb 25, 2011 06:11
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Rusty Shackelford posted:Not to derail, but are you looking at spending $40,000 on a kitchen and bathroom remodel in Chicago? Because if that is the case, you really need to shop around. And I actually haven't started shopping yet. I just heard a rough rule of thumb is 20k kitchen, 10k bathroom. Though I think I may just sell as is.
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Feb 25, 2011 16:34
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The pluses of ownership are basically more freedom to do what you want with the place. In a condo this is pretty limited compared to a house. Basically you can redo a kitchen or bath, but if you are renting you can just rent a place with this already done. If you are renting long term you can paint how you want as long as you repaint it before moving out, but if you're going to be there for years this shouldn't be a big deal. The rental market for houses is much smaller and it may be more difficult to find what you want. If you do own your house, you can do a lot more customization than a condo including even building and addition, redoing the basement, etc. That's my reasoning for why I will never buy a condo.
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Feb 25, 2011 17:55
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alreadybeen posted:
Another issue I've noticed with condos in my area is that the contracts for the condo associations have clauses allowing the association to veto any attempt by you to sell your unit if they disagree with your sale price. The COAs are trying to prop up their unit prices by refusing to allow anyone to sell for what the market here will actually give. Empty units everywhere now, because people just got up and left to find jobs after getting laid off here. There aren't many real employers here, so if you get canned you're almost guaranteed to need to move away. I will never, ever buy a house/condo/apartment/whatever that I cannot voluntarily sell when I need to do so. They tie people down enough as it is without that poo poo.
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Feb 25, 2011 18:35
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gvibes posted:Big kitchen and two bathrooms. If you pay $10,000 to remodel a 5'*5' room you are incredibly stupid or wealthy enough to not care. I couldn't imagine spending more than $5,000 if you were paying someone else to do the work for you and that's replacing everything short of the studs. I've priced mine out at $1,500-2,000 for materials. New Vanity, floor tile, toilet, bathtub, and various little accessories. Raise that up a little bit if you want to tile the bathtub nicely. $10,000 is absurd unless you love wasting money on needlessly expensive toys. All new cabinets, countertops, and appliances really shouldn't cost you more than $10,000 unless you splurge on granite and have an absolutely gigantic kitchen. You really need to base the level of upgrades to the cost of your house as well. If you own a $500,000 house buyers would be expecting granite countertops, tile everything, etc. Then most of your $40K investment might be coming back to you, and would help you sell quicker. A $40K kitchen and bathroom remodel isn't going to make your $100K house a $140K house in almost every case.
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Feb 25, 2011 21:56
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It's pretty hard to comment on a rough price of a kitchen remodel without knowing any variables, but 20k sounds reasonable / cheap. Of course that's assuming your using a competent contractor with insurance / web / warranty and your pulling permits. Out of curiosity, does not pulling permits on kitchen / bath remodels significantly affect resale value?
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Feb 26, 2011 18:41
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Great thread, lots of good information here for someone house shopping like myself. I was wondering, is it unethical to work with various Realtors to increase the speed of house suggestions (like recruiters when searching for work) or is it best to just stick to one? Perhaps I am setting my expectations too high, and I know I am not their only client that is house hunting, but I am looking to move this June/July and would like to see more suggestions sent my way. Maybe I should be searching on my own and send them what I am interested in instead. Any information that you have based on experience would be great.
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Feb 26, 2011 18:51
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Wareen Buffet had an interesting little aside in his annual letter to shareholders that was released today Warren Buffet posted:If home buyers throughout the country had behaved like our buyers, America would not have had the
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Feb 26, 2011 19:08
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DrSeRRoD posted:Great thread, lots of good information here for someone house shopping like myself. I was wondering, is it unethical to work with various Realtors to increase the speed of house suggestions (like recruiters when searching for work) or is it best to just stick to one? It is unethical if you don't tell the realtors about each other. You can agree to use different realtors for different neighborhoods/regions if you want. But since the realtor works for free on the hope of a commission at the end when you buy something, it's clear that if you work with multiple realtors, all but one is going to have wasted days of their time on you for nothing. So you ask realtors if they'll come to a commission-splitting agreement or something, but most would probably refuse. Some will ask you to sign an exclusivity agreement when you start working with them and that is, in theory, legally binding (although probably hard to enforce). You can definitely search on your own. All the realtors have access to the same MLS listings. The only advantage one will have over another is knowledge of houses just going up for sale that haven't hit MLS yet*... and their general competence and knowledge of the neighborhoods you're considering. When my wife and I bought, we initially considered two different regions (peninsula and east bay, in the SF Bay Area) and our east-bay realtor told us he didn't cover the peninsula. We considered getting a second realtor for the peninsula but after a month of looking around ourselves, we realized the only houses we could afford were those in very poor condition or in bad neighborhoods, so we narrowed our search to just the east bay. Our realtor e-mailed us MLS listings every day based on a search he'd set up. We also watched realestate.com and craigslist and picked out stuff we thought was interesting across all three of those lists. Between September and December we typically went out on saturday and looked at stuff we'd found ourselves (usually from the outside, although for foreclosures we sometimes snuck around into the back yard to peek into windows and stuff) and then on Sunday our realtor would take us to three or four places we'd identified off his list, or anything we'd seen saturday that we wanted to get into. He had other clients and occasionally wasn't free for a sunday but he always made time for us each week. He was a laid back, no-hard-sell guy that never pressured us to make a decision, and even though we took months he was patient and nice about everything. Finally in late november we made one offer that was beaten by a lower cash offer, and a week later made an offer on another house half a block from the first one, which was quickly accepted. Anyway the point is, you absolutely want a realtor that does his or her job well, but most of the listings any of them will send you are just straight off of MLS. Having two realtors for the same region isn't advantageous and if they find out, both are likely to drop you. Just go with the best one. If your realtor isn't giving you enough of their time, drop them and find a new one. They're your personal agent and should act like it, but you owe them that commission in exchange. It's only reasonable not to expect someone to work for you for free. *Beware! An agent that acts as both buyers' and sellers' agent will have houses he is selling on behalf of his own clients. If he sells one to you, he gets the entire commission on both ends. However there is a potential conflict of interest because the total size of the commission is dependent on the price of the house, so he has an incentive to get you to pay more for the house. Of course a buyer's agent has that incentive anyway, but an ethical buyer's agent should never suggest pricing to you. In California they are actually prohibited by law from giving pricing advice for exactly that reason. Dunno what the laws are in another state. Anyway point is, it's not illegal for them to suggest their own listings for you, but you should not tolerate an agent who favors his own listings over anything else that comes up. If you sense that you're being pressured into looking at his own sellers' houses over stuff you think you like from the general MLS listings, walk away. On the other hand, the fact he's acting as a sellers' agent can mean he may be able to show you houses that have not hit MLS yet, if the sellers are still in the process of putting them on the market. I think they have an obligation to let the house hit MLS (it is not in the sellers' interest to fail to expose their house to multiple bids) but they can at least make sure you're ready to submit a bid on the first day of sale. This can potentially get you a house for less than its market value, if the sellers are desperate for a quick close. The same is true for foreclosures if your agent works for an company doing REO sales. Banks want a quick sale and may be happy to accept an offer on Day 1 rather than wait for more to come in, but that is also a crapshoot, some will always wait a week or two before reviewing offers. Leperflesh fucked around with this message at 21:23 on Feb 26, 2011 |
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Feb 26, 2011 21:17
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In the age of redfin and zillow, the only service provided by buyers agents that is of any use at all is handling the paperwork for offers and closing. Of course that service isn't even remotely worth what they get paid, but you are stuck paying the cartel fee whether you use one or not so you might as well. And yes, for the love of god you should be doing your own house search. It's so incredibly easy with these online tools I can't imagine why anyone would let somebody else filter results for them.
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Feb 26, 2011 21:29
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Reggie Died posted:Out of curiosity, does not pulling permits on kitchen / bath remodels significantly affect resale value? I think that depends a lot on the price of the home. If it's on the low-end, it's probably not going to make a huge difference (though the code violations involved in non-permitted stuff might do that if they're obvious enough). Higher-end home buyers are going to want to see permits though. Even with a home inspector, there are way too many time bombs that can be hidden behind walls or otherwise inaccessible.
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Feb 26, 2011 21:57
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Thank you for the detailed reply and insight Leper, that helps a good deal.
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Feb 26, 2011 22:02
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DancingMachine posted:Of course that service isn't even remotely worth what they get paid, but you are stuck paying the cartel fee whether you use one or not so you might as well.
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Feb 26, 2011 23:45
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Cicero posted:What do you mean by cartel fee whether you use an agent or not? It typically costs 6% in realtor fees to sell a home. There is no reason in today's world for it to still cost 6% - it's a total racket. If you buy a home without a buyer's agent the listing agent will likely get the full 6% - you don't save any money. In a more perfect world if you didn't have a buyer's agent the listing agent would still get their 3% and the other 3% would either be returned to you at closing or you could work a discount with the seller. Since you are going to be paying for a buyer's agent even if you don't feel like you need one it makes sense to get one regardless. Personally I used a rebate agent and got 2% back at closing. I had to do the dirty work of finding homes, but my realtor did everything else from there.
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Feb 27, 2011 04:48
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What greasyhands has posted is essentially a roundabout way of describing how leverage works (2% of $150k is more than 6% of $20k). Residential real estate can essentially be thought of as a highly leveraged, non-diversified, pro-cyclical investment in a very specific sector of the economy. All three attributes amplify risk. Highly leveraged and non-diversified you presumably already understand, pro-cyclical means that the value of real estate in a particular area is highly correlated with the health of the local economy and your own income. If you are a widget maker and the local widget factory closes down and moves to China, then not only have you suffered a loss of income and ability to pay your mortgage, but also a depreciation of your capital stock as your house is now worth less. The leverage at this point doesn't help things. This is what I mean by "amplify risk". Notice the assumption that house prices will appreciate by 2% PA. This sounds innocuous but is a dangerous assumption - all real estate is local, and while 2% might sound about right for a nation wide average, remember that you (most of you, settle down Senator McCain) are not buying a portfolio of houses across the country, but one specific house in one specific location ("non-diversified"). Once you take that into account, maybe you need to keep in mind that hindsight is 20/20. If you bought a house beside Google's office 10 years ago, you would probably have done well since Google has become a successful company, but with the benefit of that hindsight, you could have made much more buying call options on Google shares and leveraging yourself up to the hilt. If you were an average person 40 years ago, do you think it would have made more sense to buy a house in Detroit, or Silicon Valley? Hindsight....... Maybe a more appropriate comparison would be to compare 20k invested in a 3x leverage S&P500 ETF? In a rational market, renting a house should be much more expensive (all things considered) than buying a house, because even with all the government subsidies, real estate is objectively a lovely, risky investment for an individual. There's no risk in renting a house. Don't let me dissuade you from buying a house though, it is definitely true that most rich people became rich by making highly leveraged, risky investments. Warren Buffet didn't become Warren Buffet through timidity.  On renting and renovations: If your renovations increase the market value of the property, there is no reason why the landlord would oppose it - I certainly wouldn't give a poo poo. Your landlord won't let you paint the walls hot pink or install a tiger pit because most likely it detracts from the value of the place. This is no different than if you were the landlord- paint your walls hot pink and you'll be paying to repaint it when it comes time to sell the place. Same goes for pets, etc. You don't have to buy a house to have hot pink walls, C.R.E.A.M. quaint bucket: The US is unique amongst developed countries in having a government sponsored secondary market in guaranteed fixed rate mortgages. That doesn't exist in Canada. Canadian law (The Interest Rate Act) also prohibits banks from attaching pre-payment penalties on loans longer than 5 years, which would make a fixed rate mortgage a bad deal for the banks as the borrower is guaranteed the right to renew at a new rate after 5 years, making it a one way option in the borrower's favour. You can get a fixed rate loan but it will be much more expensive and few people do it. Essentially the existence of the fixed rate mortgage is another subsidy handed out to homeowners by the US government, well, before the US government nationalized most of the nation's mortgages directly in 2008 anyway. Should you buy a house in Vancouver? Sure, why not. Just keep in mind that the US housing bubble isn't the first one the world has seen, nor are the peculiarities of the American credit markets needed - Hong Kong property values dropped 40% during the 1997/8 Asian financial crisis. If I have learned anything in these last few years, it's that things can always get much worse than my worst expectations. Throatwarbler fucked around with this message at 08:39 on Feb 27, 2011 |
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Feb 27, 2011 08:22
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DrSeRRoD posted:Great thread, lots of good information here for someone house shopping like myself. I was wondering, is it unethical to work with various Realtors to increase the speed of house suggestions (like recruiters when searching for work) or is it best to just stick to one?
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Feb 28, 2011 04:36
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It's worth pointing out that one of the things a realtor can do, that you can't do on your own, is get you inside houses that are for sale, any time. Vacant ones, anyway. They have the codes that let them access the key. When my wife and I looked at properties ourselves, since we were mostly looking at REOs, we weren't able to get inside most houses. You can call the listing agent and leave a message asking for an appointment to see the house of course, but a lot of the time it seemed there'd be one agent listing like 30 REOs at once and they rarely even called back; when they did, they were usually very inflexible about when we could go look. Any house we found interesting, our agent got us into with no problem.
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Feb 28, 2011 09:28
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Leperflesh posted:It's worth pointing out that one of the things a realtor can do, that you can't do on your own, is get you inside houses that are for sale, any time. Vacant ones, anyway. They have the codes that let them access the key. While our agent certainly was able to quickly get us into a house without issue, my wife and I saw a few houses on our own without too much issue. I'm not sure if it's just your area but we called a few listing agents for properties we saw on redfin and zillow. They made themselves available pretty easily for showings. YMMV I guess. I'd still recommend, as a buyer, getting an agent. Only if you really know the area well and have some experience in real estate processes would I recommend going it solo though. Also, be aware that if you're thinking about using a buyer's agent, hold off on seeing houses until you make a decision. If you are shown a property by the listing agent, then sign up later on with a buyer's agent, it can muddle the commission and your relationship with your agent. The listing agent can claim they did all the work showing the house to you and move to claim all the commission. Your eventual buyer's agent won't like this.
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Feb 28, 2011 17:57
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Maybe this is beating a dead horse, but in the house vs condo thing, you also have to look at transportation costs as part of your cost of living. I live a 15-20 minute walk/15 minute bus ride/5-10 minute bike ride away from where I live (rent) now. I'll probably buy in this same neighborhood, or the same (non driving) distance away. I pay $70 per month for my bus pass, and it would be nearly twice that for a parking permit, not to mention the wear and tear on my car, gas, and the opportunity cost of time spent wasted driving to work when I can be reading and getting ready for the day on the bus. When I do drive, I drive 3/4 of a mile to the grocery store, rather than 5-10. My car is an old beater that's totally paid off, I pay $400 a year in insurance, why would I want to run to the suburbs for a big house when I'd have to pay so much more to get anywhere. Also keep in mind that housing in the core has dropped much less than that of the suburbs/exurbs.
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Mar 9, 2011 00:14
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FISHMANPET posted:Maybe this is beating a dead horse, but in the house vs condo thing, you also have to look at transportation costs as part of your cost of living. While people often move when they buy a house, they also often move when they rent. I think transportation costs should be a consideration whenever someone plans to move, and isn't really directly linked to house-buying. Still, worth considering if you assume that you can buy a condo near work but can only have a house farther away.
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Mar 9, 2011 02:38
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I haven't read the whole thing yet, but The Economist came out with a special report on global property markets that basically rehash what I posted last week.  http://www.economist.com/node/18250385?story_id=18250385 (full report is paid) Throatwarbler fucked around with this message at 03:46 on Mar 12, 2011 |
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Mar 12, 2011 03:43
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Hypothetical situation: I have an existing house with a mortgage and would like to move locally to a new construction house that costs about the same. Which option sounds most realistic? 1. Convince home builder to have contingency in contract for sale of my home. Try to coordinate mine selling as new home is ready for occupancy. 2. Sell my home, rent, then go sign contract on new house clear and free I would obviously prefer #1 to minimize the hassle of moving twice, but the more people I talk to, the more they seem to think it is unrealistic. I'm most interested in what other in the same situation have done in the past.
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Mar 13, 2011 17:59
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Namlemez posted:Hypothetical situation: I have an existing house with a mortgage and would like to move locally to a new construction house that costs about the same. Which option sounds most realistic? Option 1 sounds like a hard sell for a builder. You know the housing market has been kind of a mess lately, right? Apparently there are a lot of houses for sale, and some of them have been unsold for a while.
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Mar 13, 2011 18:09
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You're also going to spend a big chunk of money doing this, even if the houses are about the same price, from transaction costs. Option 2 seems more viable to me, even though it's a huge hassle in terms of moving your stuff. A family I know, good friends, did it this way though: took nearly a year for them to sell their house (in 2008), once it finally sold they moved into a townhouse on month-to-month rent for about six months, before their new place (in another city) was ready for move-in. They put a bunch of stuff in storage and hired movers to help reduce the stress of the whole thing.
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Mar 13, 2011 18:55
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Leperflesh posted:You're also going to spend a big chunk of money doing this, even if the houses are about the same price, from transaction costs. Yeah, I totally realize that. I left out that the new place is made more attractive by a. being 25 years newer than current place, and b. twenty minute commute instead of eighty minute. Thanks for the input though. It sounds like I might need to look into the transitional renting option.
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Mar 13, 2011 20:33
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When I bought my new construction home I could back out at any time during the build. I would have lost my 500 dollar deposit, but that's it. It happens here all the time. Someone starts the house, 7 months later things change, they don't get the mortgage, whatever and the house goes back on the market. Whoever buys it just doesn't get a chance to customize it. Check with the homebuilder and see how it goes, and don't put a bunch down.
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Mar 15, 2011 01:51
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