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Dik Hz posted:What cash? The assumption is that, particularly at the start of a mortgage, the total cost of ownership will be greater than renting the same sized place. If, after taxes, insurance, mortgage payments, amortized closing costs, and estimated maintenance, your costs are actually less than renting, buying basically becomes a no-brainer.
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Aug 9, 2013 12:30
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baquerd posted:The assumption is that, particularly at the start of a mortgage, the total cost of ownership will be greater than renting the same sized place. If, after taxes, insurance, mortgage payments, amortized closing costs, and estimated maintenance, your costs are actually less than renting, buying basically becomes a no-brainer. Considering a mortgage takes over half of your monthly housing cost and renders it invulnerable to inflation, that's pretty much guaranteed over the long term. There's also of course the peripheral savings, like cheaper access to credit through a HELOC or home equity loan. I mentioned it earlier, but the fact that a homeowner with equity can borrow money more cheaply than a renter is kind of a big deal. People often fail to factor that into the 'Rent v Buy' argument, despite the fact that equity is one of the most useful tools in the personal finance arsenal. CatsOnTheInternet fucked around with this message at 13:24 on Aug 9, 2013 |
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Aug 9, 2013 13:09
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Captain Windex posted:That's weird that they would refuse to lend at all if the purchase price was more than the appraisal, since allowed loan amount is based on the lesser of those 2 figures. We just require that the borrower sign a letter acknowledging that they are purchasing for above the appraised value. Yeah, the way our lender presented our options were 1) Find an obvious error with the appraisal (which we've done) 2) Pay the difference such that the loan is less than 80% of the appraised value 3) Get the builder to lower the price or 4) blow the whole thing up. It's not logical for a lender to torpedo the entire deal as long as their investment is covered. The only scenario where it would make sense to rescind the deal would be if the lender calculates that the buyer can't afford the extra down payment without reducing their reserves below the required levels. As far as our appraisal goes, the community in which we're building has four separate levels of homes: smaller homes that are all plank siding, brick versions of the smaller homes, larger homes with a brick front and plank siding, and larger homes that are all brick. In addition to the siding and size, the four different tiers each have increasing levels of interior upgrades and trim. We're building in the larger, all brick area, but the appraiser used "comps" from one of the lower tiers. Our agent and the bulider's agent provided an alternative list of comps and now we're hoping the appraiser will adjust their report to account for the fact that the alternative homes are more comparable to our house than the ones he initially used. If the appraisal doesn't get fixed, we may be stuck paying the extra cash. While in a normal resale situation we'd have an out with an appraisal contingency, since we contracted with a builder to build a semi-custom home, the contract didn't include some of the standard contingencies. We pushed hard for a mortgage contingency during negotiations, but they were unwilling to make any modifications to their form contract, even for some very minor matters. To a certain extent, this is understandable - if I'm a builder building a home with specific features and fixtures chosen by an buyer, I don't want to be left holding the back if they decide to back out of the deal. In retrospect, I should have specifically fought for an appraisal contingency separate from a mortgage contingency. The mortgage contingency was my main concern at the time, but it wasn't much of a concern because we will easily qualify for the mortgage, if we can get this appraisal issue worked out - I never considered that new construction (in a neighborhood where the builder is selling at least 1 house a week a this price point) would have a problem with the appraisal, so I didn't really fight for an appraisal contingency. We only added a few upgrades so it isn't like we overbuilt for our section of the neighborhood. Then again, perhaps we should have negotiated harder for a contingency during the contract signing. Either way, it just reduces our leverage a bit if we can't get the appraisal fixed - I need to talk to a local real estate attorney but I suspect it'd be difficult for them to keep our deposit if we decide to walk away and then fight for the deposit. Anyway, things are looking better with regards to getting the appraisal adjusted - hopefully this will work out without any further complications. Hopefully this will help anyone else considering new construction - even if the builder won't budge on the mortgage contingency, make sure to push for an appraisal contingency, because if it doesn't appraise for what they're trying to sell it for, that should be their problem, not yours.
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Aug 9, 2013 16:05
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canyoneer posted:I don't like to think of an owner-occupied property as an "investment", more of a "piggy bank that you can live inside." Only an idiot borrows against the equity built in a house. That's what got the US in so much trouble the first time, but it doesn't look like some people have learned.
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Aug 9, 2013 16:25
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sbaldrick posted:Only an idiot borrows against the equity built in a house. That's what got the US in so much trouble the first time, but it doesn't look like some people have learned. Yeah, how stupid of them, taking out tax-advantaged loans at extremely low rates. Why keep their assets in funds/bonds/ETFs when they could be paying more interest, right?
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Aug 9, 2013 16:49
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sbaldrick posted:Only an idiot borrows against the equity built in a house. That's what got the US in so much trouble the first time, but it doesn't look like some people have learned. There's a big difference between borrowing money at a lower interest rate while investing the money you would have spent at a higher interest rate, and just borrowing money you don't have.
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Aug 9, 2013 17:11
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NJ Deac posted:Yeah, the way our lender presented our options were 1) Find an obvious error with the appraisal (which we've done) 2) Pay the difference such that the loan is less than 80% of the appraised value 3) Get the builder to lower the price or 4) blow the whole thing up. It's not logical for a lender to torpedo the entire deal as long as their investment is covered. The only scenario where it would make sense to rescind the deal would be if the lender calculates that the buyer can't afford the extra down payment without reducing their reserves below the required levels. I'm curious to see how the house we're building appraises next month as well. Right now it's looking like we shouldn't have an issue because the starting prices for the homes in our neighborhood have gone up about 15% since we went under contract in March. The area we're building is really expanding quickly so I'm glad we got in when we did. Our builder said they haven't had a home not meet the sale price yet, so that's good.
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Aug 9, 2013 21:16
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Captain Windex posted:That's weird that they would refuse to lend at all if the purchase price was more than the appraisal, since allowed loan amount is based on the lesser of those 2 figures. We just require that the borrower sign a letter acknowledging that they are purchasing for above the appraised value. Maybe that Due Diligence stuff I mentioned isn't just a convenient plus for the buyers in NC, maybe the local lenders use it to make sure they get the most out of any foreclosures or short sales.
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Aug 9, 2013 22:25
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rockcity posted:I'm curious to see how the house we're building appraises next month as well. Right now it's looking like we shouldn't have an issue because the starting prices for the homes in our neighborhood have gone up about 15% since we went under contract in March. The area we're building is really expanding quickly so I'm glad we got in when we did. Our builder said they haven't had a home not meet the sale price yet, so that's good. Incidentally, all of these factors are true for our neighborhood as well - prices are steadily rising, and the builder assured us they haven't had any appraisal issues. It seems like in our case we ended up with an rear end in a top hat appraiser that decided to use a comp that really screwed us over (a four year old resale that was a result of a relocating seller) instead of any one of like 5 other newly constructed homes that had sold more recently that would have given us the purchase price we needed.
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Aug 9, 2013 22:43
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Ugh. We finally put in an offer on a house we liked, and now I'm getting stuck at the inspection phase. The house appraised for $6000 over our offer, but it's failing inspection due to 3 missing light fixtures and a handrail that is loose. The house is a HUD sale, so we're not allowed to have any repairs done prior to closing, but my financing will not go through without these 2 items being taken care of prior to the re-inspection. My realtor and my mortgage broker are ready to just go install lights and screw the hand railing together, but the listing agent is dead set against it. It being a HUD home, do I have any possible course of action? FHA loans allow for a repair escrow, but my conventional loan does not. The listing agent has said that if we attempt to correct the issue prior to inspection, we could face penalties from HUD, including never being allowed to purchase HUD properties in the future (a blessing in disguise, judging by this sale). None of my team of people can believe the listing agent is being such a pain in the rear end about this, but we're stuck at this point for the weekend. Next week is the deadline for inspection in order to ensure my closing by Aug 30th, and I'm starting to freak out about the whole situation.
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Aug 10, 2013 02:46
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ntan1 posted:He's not. You assumed that the specific house was in really good financial setup. However, markets and history tell us that's not always the case. See, you said "markets", but the only market that matters is the one that specific house is in. It would be the same if I was buying an individual stock, but you're giving me advice based on average returns of the entire market. Just because the market historically averages a certain percentage doesn't mean that particular stock has, is, or ever will. Which is why people look at specifics and fundamentals when analyzing a single stock, not broad trends. Since the nature of real estate involves one specific house in one specific market, speaking in national generalities is lazy. The fundamentals of that particular situation are what need to be analyzed. This guy has indicated he has strong fundamentals, so it's logical to assume a good financial setup.
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Aug 10, 2013 23:30
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The real issue is saying "hey look, the value of my <investment/speculation/whatever> went up 30%! Therefore, it was never risky." Risk is always forward-looking. At the time that he bought in, it was hugely risky. The risk has paid off! Hooray! But someone else in his place should still regard the exact same situation as being extremely risky. It's extremely easy to congratulate yourself on being a genius after the fact, but it's incorrect to take the fact of your past success as evidence that the risk was actually low. Buying a house in any market with the intent to flip in two years is more risky than buying a well-diversified basket of mutual funds covering domestic and international stock and bond indexes. We advise against it in this thread because that's the advice that is correct for the vast majority of people coming here asking for advice. It's entirely possible that trying it will pay off for many: perhaps even for a majority. But we'd be remiss in advising it if even only 25% of buyers wound up losing big on the deal, or even (I'd say) 15%. For most people, buying a house represents committing a substantial portion of their life savings, and if they wind up under water in two years, it may be impossible for them to sell. Hot markets may stay hot, or get hotter, or they may suddenly implode. Past performance is not a guarantee of future performance. People should be advised to be conservative with money they can't afford to lose.
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Aug 11, 2013 02:08
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Rekinom posted:
If I told you I was borrowing a multiple of my annual income to buy ONE stock with the potential to hand me 20-30% returns in 2 years, you'd correctly call me insane. Even if it turned out that I was right... I'd characterize that kind of risk-reward as a foolish venture. And it would be a struggle to call it an investment - it's clearly a speculative venture. Again, it underscores the importance of looking at investments as one type of financial transaction - and home ownership vs. renting as another. They may have some similar qualities, but transposing the two is dangerous, and kind of silly. Why do I feel like this thread is leaking people from a wormhole that connects to 2006?
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Aug 11, 2013 03:04
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Sorry for making the thread get off topic. For most people, they shouldn't look at a house as an investment and should only be looking to purchase when they are looking at a 5 year or longer horizon for living in it. My point is basically what Rekinom just said - you should look at your personal situation, market, goals, and everything else that goes into making maybe the largest financial decision of your life before making it. National and historic averages do not apply to a single house in a single market for a single buyer, but they're a generally good place to start. I do not think my decision was that risky. I do agree that it is easier to say a purchase was the correct financial choice after the fact, but I still plan on keeping this place for 2-3 more years so it all isn't gloating while looking backwards. I don't mean to gloat by any means anyway; I just meant to say that I do view this as an investment as much as a quality of life / lifestyle purchase. I don't believe my situation is like Florida in 2006 (granted, I'm sure most of the people buying properties in places like Florida thought it was a sound financial decision at the time). The economy here is very strong and forecasted to be strong for the next several years, there is a large housing deficit that is only getting larger with the increasing amounts of people moving here every year, this property is in one of the most desirable parts of the city with limited new construction so that will always give it value, and I was also given a large discount over what the developers knew they would sell for later because I bought it pre construction. I also put 20% down, got a conventional 30 year loan, bought a place that will put me at a 19% debt to income ratio, and have several years of living expenses in liquid investments to support me if I lost my job/got injured/whatever. If the housing market here starts stagnating or even going the opposite direction, I'll be okay. I can afford the payments. It was said in response to me that there are few investments out there that make you get insurance on it, pay property taxes, put money in maintenance into it, etc; but there are also few investments that let me live in it for the time being, not pay rent, get tax write offs, and pay 4.25% interest on something that I believe will return me multiple times that amount while paying zero taxes on those profits when it is time to sell if it does pan out. There is risk that won't happen. I looked at my entire situation, felt comfortable with that risk, and believe I made the correct financial decision. If I turn out to be wrong, I won't be bankrupt or on the streets; I'll just have to eat some loss or stay living here for longer than I expected or look into renting it out. It won't be the end of the world. That's what I would advise anyone. Make sure going into a housing purchase that you and your family are comfortable with all the risks associated with it and are in a financial situation where you are prepared for worst case scenarios that can spring up due to home ownership. Boola fucked around with this message at 07:09 on Aug 11, 2013 |
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Aug 11, 2013 07:04
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Does anyone have experience with modular homes and prefabs? I live in Maui, where real estate is extremely expensive, but renting is about as bad (rent prices are extremely high, much higher than an equivalent mortgage payment if you rent a small house, but then you don't have to worry about things like maintenance or home insurance so it probably balances out). Our landlord is also trying to sell the house that we're renting now, but he has listed a little high for the area so we probably have at least 6-12 months before we'd be looking at getting kicked out. It's also a very small house, we'd like to move into something a little bigger. In addition to looking at local real estate, we're also thinking of buying an empty lot and then putting a small prefab on it, probably a 2-bedroom in the 600-700 sqft range. Is this reasonable, or would we probably be better off just building a house with a local contractor? Are there any pitfalls in going with prefab?
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Aug 11, 2013 08:12
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Boola posted:I don't believe my situation is like Florida in 2006 (granted, I'm sure most of the people buying properties in places like Florida thought it was a sound financial decision at the time). The economy here is very strong and forecasted to be strong for the next several years, there is a large housing deficit that is only getting larger with the increasing amounts of people moving here every year, this property is in one of the most desirable parts of the city with limited new construction so that will always give it value Yes, that sounds NOTHING like 2006.
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Aug 11, 2013 13:16
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PitViper posted:My realtor and my mortgage broker are ready to just go install lights and screw the hand railing together, but the listing agent is dead set against it. Wait, why? He's willing to lose the sale because he doesn't want people installing a few light fixtures and fixing a railing? That seems really dumb.
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Aug 11, 2013 14:13
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TheLizard posted:Wait, why? He's willing to lose the sale because he doesn't want people installing a few light fixtures and fixing a railing? That seems really dumb. HUD won't let any repairs be done period, you have to buy their foreclosures as is. Conventional loans and HUD foreclosures don't mix well a lot of the time due to this and some other HUD dickishness.
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Aug 11, 2013 17:32
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QuarkJets posted:Does anyone have experience with modular homes and prefabs? I live in Maui, where real estate is extremely expensive, but renting is about as bad (rent prices are extremely high, much higher than an equivalent mortgage payment if you rent a small house, but then you don't have to worry about things like maintenance or home insurance so it probably balances out). Our landlord is also trying to sell the house that we're renting now, but he has listed a little high for the area so we probably have at least 6-12 months before we'd be looking at getting kicked out. It's also a very small house, we'd like to move into something a little bigger. My dad did a modular build about maybe 12 years ago now in northern Michigan. He was way more focused on finding a good piece of land to have a house put on rather than finding the right house. The build quality/timeline was pretty good, though he ran into an issue with the builder who while finishing the house on-site, went bankrupt. Thankfully my dad is really handy and pretty much everything that was left to be done he could do himself, but he spent months fighting in court to get money back for unfinished work. Obviously that doesn't really say anything about modular homes as a whole. Aside from that, the house was great and unless you really noticed that the rooms were all situated where they were on one half of the house or the other, you'd have never known it wasn't built on site.
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Aug 11, 2013 19:06
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My boyfriend and I want to start looking to buy a home in San Francisco in November. We're dedicated to staying in this city for at least the next 10 years, and probably way longer than that. I took a quick (3hr) class on "how to buy a house" that was provided by my employer and have been poring through the workbook so I have a pretty basic idea of what to expect, but the class focused primarily on generalist information and didn't specifically touch on what it's like buy a place in the bay area. I really don't want to walk into this blind, since it's going to be the most expensive thing I'll ever buy. Has anybody here bought in a crazy expensive market before? I'm wondering if I'm walking into some kind of bear trap in terms of needing to get a jumbo mortgage, having to put in an offer over asking price, that kind of thing. I'd really like to hear about peoples' experiences with real estate in crazy markets.
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Aug 12, 2013 00:19
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Captain Windex posted:HUD won't let any repairs be done period, you have to buy their foreclosures as is. Conventional loans and HUD foreclosures don't mix well a lot of the time due to this and some other HUD dickishness. Exactly this. The listing agent is dead set against any illicit repairs, and is basically telling me to change financing with 19 days until closing. My mortgage guy just wants light fixtures to magically appear in the house, as does my realtor, but none of us want to risk a shitstorm with the listing agent. My loan doesn't allow for a repair escrow, and needs to pass the inspection in order to go through. My realtor and mortgage guy are trying to see if proof of repair might be good enough, since I already have an electrician lined up to come in after close but before we do paint/drywall to add some outlets in a few spots and add an electrical outlet for the dryer. The boxes/wiring for the lights are already there (LL bath and kitchen), but the fixtures are missing. We all think it's ridiculous, but it is what it is I suppose. We have fixtures already, even! Do never buy (a HUD house with conventional financing). edit: The house needs a lot of cosmetic work, but no habitability issues. Major mechanicals are all good, it's in an HOA so the exterior has been kept up while it's been foreclosed (they just sealed the driveway and replaced some bad flooring on the deck last week). I'm being dinged on inspection for the light fixtures and a loose handrail. 10 minutes and a screwdriver will fix all the issues, but that's apparently a huge issue with the first time home buyer's loans in MN. We've got funds set aside already for appliances, carpet, and drywall/paint, so it's hugely frustrating to be so close, yet so far. PitViper fucked around with this message at 01:05 on Aug 12, 2013 |
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Aug 12, 2013 01:01
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pancaek posted:My boyfriend and I want to start looking to buy a home in San Francisco in November. We're dedicated to staying in this city for at least the next 10 years, and probably way longer than that. In the middle of this in DC. It's a very competitive market, places frequently going above asking, etc Tips: If possible keep your loan amount under 417k. This may be difficult or impossible. Ask a realtor familiar with your market about lenders. Some lenders have portfolio products that are geared toward your market. There is a credit union here offering 0% or 5% down up to 650k with no MI. I didn't go through them but they're geared toward our housing market. Research the area. Try to aim a couple years out and shoot for an "up and coming" neighborhood rather than a neighborhood that's already there and going to cost that premium. This only works if you're very familiar with your local market and aren't totally risk averse. It sucks. PM me if you want to chat some more - my mom is a mortgage lender and I've been through this process twice before now in the DC suburbs.
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Aug 12, 2013 02:29
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tiananman posted:If I told you I was borrowing a multiple of my annual income to buy ONE stock with the potential to hand me 20-30% returns in 2 years, you'd correctly call me insane. Even if it turned out that I was right... I would call you insane for buying that stock, depending on what kind of stock it was. If you did that to buy stock in a small business where you could actually have a say in how said business is run, then it's a different story. Speculation would be buying a house that you have no intention of living in or renting out, with the primary goal of flipping it in the short term. That's where the term spec house even comes from. A house can be an investment in the sense that it meets a necessity you're on the hook for, or generate income from renting it out. If you're buying low, hoping it rises, and selling high, then yes, you are speculating. But, I reiterate, there's a big difference between buying stocks of Apple, and purchasing 25% equity in a start up business. In that same way, a house that gets flipped is like your example, whereas a house that is owner occupied or rented out, is more like my small business example.
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Aug 12, 2013 05:41
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So uh, back on topic... I'm looking at buying a house that is listed as a one story house, but the "basement" area was finished off by previous owners. The disclosures say that they don't know if the lower level was done with permits. What effect does that have on the sale or ownership of the house?
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Aug 12, 2013 06:12
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CrazyLittle posted:So uh, back on topic...
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Aug 12, 2013 06:18
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Walked posted:In the middle of this in DC. Thanks, I'll make sure to find a realtor who can provide that kind of support. Right now we have enough to put down 20%, but even with that much $ down it is almost guaranteed that we'll need to borrow more than 417k because of the likelihood that we'll need to bid over asking. Luckily the neighbourhoods we're keen to live in are still up-and-coming. We're not quite willing to live in the worst neighbourhoods in the city, but we're also not aiming for the richer and more well established hoods like Noe or Pac Heights. DC sounds like kind of a nightmare. Has it always been so expensive?
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Aug 12, 2013 06:19
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CrazyLittle posted:So uh, back on topic... Depending on type of loan, what exactly was done to the basement, and the lender this possibly could be an issue for getting financing for the purchase. For example, we generally consider unpermitted bathroom and kitchen additions to be unacceptable (due to loving with the plumbing/gas lines), but if they just installed a bonus room, added a bedroom, or something similar to that we're less likely to have a problem with it. If the area is not permitted then the appraiser should not give any value to it and comp accordingly. The lender may want to see comps with similar unpermitted additions, but this again would depend on type of loan/nature of the addition/the lender.
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Aug 12, 2013 06:37
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Captain Windex posted:Depending on type of loan, what exactly was done to the basement, and the lender this possibly could be an issue for getting financing for the purchase. For example, we generally consider unpermitted bathroom and kitchen additions to be unacceptable (due to loving with the plumbing/gas lines), but if they just installed a bonus room, added a bedroom, or something similar to that we're less likely to have a problem with it. If the area is not permitted then the appraiser should not give any value to it and comp accordingly. The lender may want to see comps with similar unpermitted additions, but this again would depend on type of loan/nature of the addition/the lender. Yeah it's just a den / entertainment room with no plumbing changes. I'm looking at taking out a conventional loan for 60% of the total.
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Aug 12, 2013 06:56
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Rekinom posted:A house can be an investment in the sense that it meets a necessity you're on the hook for, or generate income from renting it out. If you're buying low, hoping it rises, and selling high, then yes, you are speculating. But, I reiterate, there's a big difference between buying stocks of Apple, and purchasing 25% equity in a start up business. In that same way, a house that gets flipped is like your example, whereas a house that is owner occupied or rented out, is more like my small business example. The analogy doesn't work, because if it is owner occupied, you still in general do not have control over the price of the house. Stocks are supposed to represent the growth of a company. There is a lot of implied ups and downs with stock, but ultimately, stocks tend to be higher when companies do well, or lower when companies do poorly. On the other hand, your housing price generally reflects the price of your housing market, which you have almost no say. The only say you do have is your housing maintenance and remodel, but it's implied that you are using your own money to perform the remodeling.
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Aug 12, 2013 09:40
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pancaek posted:DC sounds like kind of a nightmare. Has it always been so expensive? No; back in the 80s it was a shithole but the last 30 years have really turned it around. The crazy thing now is how expensive the far-out suburbs have gotten. Everyone expects to spend a fortune in DC/Montgomery County/Fairfax/Arlington, but half a million dollar homes in Frederick? That's 60 minutes outside of DC without traffic, 120 with. It's gotten kind of crazy. Caveat: nothing as crazy as SF though.
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Aug 12, 2013 13:13
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TheLizard posted:No; back in the 80s it was a shithole but the last 30 years have really turned it around. The crazy thing now is how expensive the far-out suburbs have gotten. Everyone expects to spend a fortune in DC/Montgomery County/Fairfax/Arlington, but half a million dollar homes in Frederick? That's 60 minutes outside of DC without traffic, 120 with. It's gotten kind of crazy. I agree with this. DC has turned around a TON over the last decade specifically. Areas you wouldn't want to live in 5-10 years ago are seen as desirable and are high-demand. I ended up buying in the city proper because if I'm going to pay upper-threshold money for a place I have zero interest in putting up with an hour+ commute every day. In the end we spent less than a lot of the DC suburbs would have cost. It's been a frustrating process though. If you have 20% down; financing above 417k will likely be a non-issue in your area. The biggest challenge you might face could be whether or not the appraisal works with your financing; otherwise you'll likely be quite solid on the financing. And you might play a slight premium on interest if you're in jumbo territory. Pick out neighborhoods you like and look at the last 60 days of sales. That will give you an idea of what's actually happening rather than what places are listed at. Get a realtor on board and he'll be able to (hopefully, if any good) get you a lot of data about specific neighborhoods / zip codes and recent sales for you to get an idea for how the properties tend to go. Pay attention to days on market and set your expectations for level of aggression/decisiveness you may need to exude accordingly.
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Aug 12, 2013 13:27
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ntan1 posted:The analogy doesn't work, because if it is owner occupied, you still in general do not have control over the price of the house.
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Aug 12, 2013 16:21
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wixard posted:But even if you can't sell it at a profit you can at least live rent-free for your whole retirement. You have enough control over stocks to make $60k of 2013 money guarantee me 10+ years of rent in a 1500sqft house starting in 2043? Doesn't sound hard. Even at 4% that'd be $1,621.70 for 120 months, and it gets more ridiculous if you assume higher returns. At 8%, $5031.33 for 120 months. I'm lowballing because I'm just dividing the 30-year lump sum by 120 -- in reality you'd continue to earn interest and stretch it a lot longer. Potentially indefinitely in the 8% case, as you can draw down $4k/month indefinitely from 600k if it's earning 8%. KS fucked around with this message at 19:06 on Aug 12, 2013 |
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Aug 12, 2013 16:28
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Rent in my neighborhood would have to average a 1.25% annual increase over the life of my mortgage for $1600 to cover a similar property in 2043. Some of the nicest places with similar square footage are already more than that. I really don't think anyone here is arguing that you should buy a house for retirement, but you aren't necessarily doing the math wrong if you see the odds in your favor.
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Aug 12, 2013 18:08
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wixard posted:But even if you can't sell it at a profit you can at least live rent-free for your whole retirement. You have enough control over stocks to make $60k of 2013 money guarantee me 10+ years of rent in a 1500sqft house starting in 2043? If you're renting to others, then you're still paying taxes and deal with an additional load of work. If you're living in your own house that you bought, it definitely may make sense in the long term (but not in the short).
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Aug 12, 2013 18:21
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Got a house-hunting dilemma! We've been looking for a while (long-distance) for the perfect house. We have an agent we like a lot, and who has taken a lot of time showing us things that might work. We haven't been super intense about it because we have a lot of time before we need to move. I've just been checking online listings a lot lately. Today, the perfect house was listed and the listing agent is... our realtor! Obviously, this is a problem. What should we do? Eta: problem in the sense that he can't represent the buyer and the seller.
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Aug 12, 2013 20:17
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He can, I think, you just have to sign some sort of dual agency agreement/waiver thing.
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Aug 12, 2013 20:20
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Yeah, it's not illegal. But you will need to be very careful about the obvious conflict of interest it creates for your realtor. For example, suppose you decide you want to put in a lowball offer: it's in your realtor's interest as representative of the seller to discourage you, and also in his interest to discourage you since his fee is a percentage of the sale. Alternatively, suppose the sellers decide they want a quick 30-day close, but it'd be better for you if it's a 45-day close. Whose position should he represent?
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Aug 12, 2013 20:24
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Thanks for the replies! Yeah, I figured it's not illegal, maybe just not a very good idea for us. Darn... I really like this house (based on pictures only) so I guess we need to figure it out pretty quick.
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Aug 12, 2013 20:43
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| # ? May 15, 2024 23:31 |
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Our realtor said that, should we find ourselves in that situation, she would hand us (the buyers) off to a colleague. You still have to sign some special paperwork since they'd be at the same agency, but at least each set of people would have a different agent.
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Aug 12, 2013 20:46
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