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I guess he means you can buy a more expensive house for the same payment and get more appreciation.
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Aug 19, 2017 14:49
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| # ? May 31, 2024 21:38 |
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What is the general consensus in this thread about condo vs. house? A lot of the houses in this area are 60++ years old (most are closing in on their first century) and there's a condo built in 2016 that's got a layout I (will probably - have to see it in person but) like. HOA fees are 200/mo, which is a lot less than most of the condos around here (400-450!!). I should mention that the chances of finding an open-plan house in the area I want is extremely low due to the aforementioned age of the houses. If I went further away, I'd be able to find a house with a layout for less, but that's because it's further away. So anyway, back to the question of house vs. condo? totalnewbie fucked around with this message at 20:38 on Aug 21, 2017 |
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Aug 21, 2017 20:33
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totalnewbie posted:What is the general consensus in this thread about condo vs. house? You have to do a lot more due diligence in the buying process. You'll want to see a history of special assessments, major repairs, reserves, and minutes from the last several meetings to verify that there isn't a special assessment looming. You'll want to know owner-occupancy rates for the complex and review the bylaws. Low owner occupancy makes it hard to get out since FHA loans can't be used (and aside from that, do you *really* want to be the guy who bought and lives in a unit that everyone else treats like an apartment?) Also the math that is frequently used in buy vs rent calculators is just different, since a smaller portion of your monthly payment is going towards equity. The expected appreciation/depreciation on condos is different than homes and wildly variable depending on the neighborhood.
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Aug 21, 2017 20:48
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Nobody in this thread likes anything.
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Aug 21, 2017 20:48
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Andy Dufresne posted:You have to do a lot more due diligence in the buying process. You'll want to see a history of special assessments, major repairs, reserves, and minutes from the last several meetings to verify that there isn't a special assessment looming. You'll want to know owner-occupancy rates for the complex and review the bylaws. Low owner occupancy makes it hard to get out since FHA loans can't be used (and aside from that, do you *really* want to be the guy who bought and lives in a unit that everyone else treats like an apartment?) I know this is generic advice, but given the condo was built in 2016, how much do I need to look out for the special assessments/repairs/etc? By "makes it hard to get out" do you mean sell? And .. okay, I did some cursory research. First, I assume basically any "regular" loan I'm getting is an "FHA loan"? As opposed to special loans like VA loans, etc. But I guess you're referring to this? quote:Condominium Loans. Known as Section 234c loans, FHA-insured condominium loans are 30-year fixed-rate products that finance the purchase of individual condominium units within developments larger than four units. There’s no strict occupancy requirement, so borrowers can use FHA-backed condo loans to earn rental income. However, in any given development, at least 80% of FHA-insured loans must be made to owner-occupants. I assume in this case, "development" doesn't refer to a single building but, rather, an entire complex. Would there be problems if I first purchase it as an owner-occupied unit and then decided to rent it out after some given number of years? TheWevel posted:Nobody in this thread likes anything. That's because everything is terrible.
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Aug 21, 2017 21:17
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Buying a house is probably not the best financial decision for most people but you're buying autonomy and comfort, probably a lawn, a garage, etc. And with a little luck your house will appreciate Buying a condo is like combining the downsides of renting an apartment with the downsides of buying a house. Your landlord (the condo association) can suddenly drop a huge assessment on you because that's just how repairs in condo buildings work. Condos can appreciate but often will appreciate less than a house in the same area, and you can reconfigure the space however you want, so there are some comfort upsides but you will still have neighbors on all sides and some nominal amount of "rent" to pay, between fees and taxes.
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Aug 21, 2017 21:47
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TheWevel posted:Nobody in this thread likes anything. I like dogs
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Aug 21, 2017 21:47
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totalnewbie posted:What is the general consensus in this thread about condo vs. house? I own two condos. You should concern yourself with who the condo association is (are they made up of actual owner occupiers or just investors renting out their units?), what their budget/financials look like (i.e. how many units are owner-occupied, how much money do they have in reserve, are they having positive cash flow, etc). It was built a few years ago; as with all things in life, things break when they are either really new or really old. Maybe one of the brand new boilers shits the bed and they put out a special assessment to all the owners. If you don't go and get yourself elected to the board of trustees, you'll have no say in what you're replacing the boiler with, nor what rate you'll pay for it at. If the condo association or management company will not divulge any of this to you before you buy, or suck at communication, I would take that as a huge red flag. Just because the fees are $200/mo doesn't mean they can't vote it up by $50/yr every year. If the fees include heating, pay special attention to that and if it is oil or gas. A swing in oil prices could easily push up fees for the whole place and you better believe they're not coming back down if oil goes back down. All told, it is nice for me to not have to worry about mowing the lawn or maintaining anything besides the empty space in my units. The walls and everything beyond have a nice master insurance policy. On the other hand, I had a crazy person floor his bathroom and even though he hosed up my ceiling, the association begged me to pay for it out of pocket because they were at risk of losing their insurance for too many claims that year, so I had to throw down $300 and paint it myself. totalnewbie posted:By "makes it hard to get out" do you mean sell? And .. okay, I did some cursory research. First, I assume basically any "regular" loan I'm getting is an "FHA loan"? As opposed to special loans like VA loans, etc. If the owner occupancy is "low", and I think that means anything below 75% occupied, which is more common than not around here, you will have an incredibly difficult time getting a mortgage, and so will anyone who wants to buy the place from you in the future. I bought my places because I'm comfortable with the idea of renting them forever. I had to apply to literally 20 banks before I found one to do low owner occupancy; they were a local co-op and the mortgage agent personally knew the building.
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Aug 21, 2017 21:48
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I believe FHA also requires 50% of the units in the development to be owner-occupied regardless of financing. FHA loans make up about half of all first-time home buyer loans. So, if your condo is at a price point attractive to first-time home buyers you want to make sure the property you are trying to sell can be purchased with an FHA loan. If a large enough number of people do what you suggest (rent it out after several years) everyone's property value will tank. I'm not trying to overemphasize this fact, but I found a great looking condo that was priced way under market many years back and I didn't end up buying it because of the above. totalnewbie posted:I know this is generic advice, but given the condo was built in 2016, how much do I need to look out for the special assessments/repairs/etc? This could still be really important, i.e. what if half the units sat empty for the first year and they have no reserves.
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Aug 21, 2017 21:58
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Thanks, that's really helpful. Are there standard documents that conveniently list all these things that I can ask for, or do I have to ask separately?
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Aug 21, 2017 22:16
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scrubs season six posted:Taking out a 401k loan isn't always a terrible financial decision. Lots of things aren't depending on your circumstances. That was my point.
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Aug 21, 2017 22:16
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totalnewbie posted:A lot of the houses in this area are 60++ years old (most are closing in on their first century) and there's a condo built in 2016 that's got a layout I (will probably - have to see it in person but) like. HOA fees are 200/mo, which is a lot less than most of the condos around here (400-450!!). Echoing what other people are saying: beware the too low HOA fee. That fee is in theory what is being built into a long term savings account to do major repairs without major assessments. The condo I rented (8 units, 7 renters) had ~super low HOA rates~ for the owners. They had (probably illegally) low reserves and had to do a special assessment when their sump pump failed completely. Turns out they didn't have a service contract on it or the sewage ejection pump. Now instead of having a cheap annual service contract tacked onto their HOA fee or a checking account with money in it they were looking at $15k/8 in special assessment just to get the one pump replaced. Have a real estate attorney glance over your condo bylaws, reserves, voting rights, and minutes. There are laws around this sort of thing, but if you sue to enforce them you have to pay for your attorney and the HOA/Condo attorney. Condos, houses, etc, are not inherently bad, but it's really easy to get in way over your head. I'm not nearly as ownership averse as others.
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Aug 21, 2017 23:03
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Buying a house: it's actually a big pain in the rear end, don't bother
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Aug 21, 2017 23:24
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Andy Dufresne posted:If a large enough number of people do what you suggest (rent it out after several years) everyone's property value will tank. Like I was saying, if you are committed to either living in your condo or renting it out forever and never actually selling it, the owner occupancy isn't quite so important. Your property value "tanking" can be a good thing, because it means the apartment can be appraised for less (less property taxes) while you're in all likelihood going to be able to rent it for the same money (renters don't care what the place is worth on paper, just that they have a roof over their head). Low owner occupancy can lead to some "slumlord" situations where the whole building is being rented and the owners don't check up on it much; there's still limits to how awful it can get though, people aren't going to rent in a cesspool when there's alternatives. One real downside to low owner occupancy is when no one is actually checking up on the building... we had a sump pump fail in the building basement and it was like that for a few weeks before anyone noticed. It was a $100 fix, but if it had gotten any worse it would have quickly become a million dollar fix (i.e. if the water line reached the boilers/electronics).
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Aug 22, 2017 00:24
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H110Hawk posted:Have a real estate attorney glance over your condo bylaws, reserves, voting rights, and minutes. How much do real estate attorneys generally charge for this?
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Aug 22, 2017 00:28
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totalnewbie posted:How much do real estate attorneys generally charge for this? No clue. Most state bars have a referral program. Ask friends who have done small town business deals who they use.
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Aug 22, 2017 02:36
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Aaaaand the sewer line is damaged. And needs significant tuck pointing. Hell yes
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Aug 22, 2017 20:20
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When I google 30 year mortgage rates I'm seeing 4.0%. But so far I've talked to two banks, one quoted me 4.5% and one 4.3%. I'm putting 20% down, the loan is only about 1x my income and I have a 740 credit rating with no other debt. Do I need to shop around more or are the rates you see online just not realistic?
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Aug 23, 2017 21:15
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I locked rates for a jumbo 30 year loan at 3.875% in CA on 7/28 with Wells Fargo for what it's worth. Loan is a small multiple of income and my credit rating is >770. My understanding was that interest rates had declined slightly in August. But for some reason non-jumbo loans have higher interest rates than jumbos, so who knows.
Evil Robot fucked around with this message at 21:42 on Aug 23, 2017 |
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Aug 23, 2017 21:39
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OctaviusBeaver posted:When I google 30 year mortgage rates I'm seeing 4.0%. But so far I've talked to two banks, one quoted me 4.5% and one 4.3%. I'm putting 20% down, the loan is only about 1x my income and I have a 740 credit rating with no other debt. Do I need to shop around more or are the rates you see online just not realistic? Yes, shop around. Call the banks and ask why your rate isn't lower, you might not have a high enough score. Find a broker. Get Loan Estimates. Zillow and Redfin both offer services where they get paid substantial sums if you originate a loan through their referral, you can find it under "mortgage calculator."
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Aug 23, 2017 21:40
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OctaviusBeaver posted:When I google 30 year mortgage rates I'm seeing 4.0%. But so far I've talked to two banks, one quoted me 4.5% and one 4.3%. I'm putting 20% down, the loan is only about 1x my income and I have a 740 credit rating with no other debt. Do I need to shop around more or are the rates you see online just not realistic? As mentioned, use an online loan broker through Zillow/Redfin references. I tried to work with a local bank for my mortgage and when I told them the rate offered by AimLoan (through Redfin) they just kind of laughed and said they couldn't come close. Other people involved in the process like your realtor will advise you not to use an online broker since they think they're less likely to actually close. gently caress them, it's not their money. It is true that they will have strict documentation requirements since they work with a variety of investors and will want documents that conform to all of their investors, which may be more cumbersome than any one bank's requirements.
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Aug 23, 2017 22:21
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Thanks for the mortgage advice, I shopped it around to about 5 other places and not only got a lower rate, the new loan has $0 in origination fees as opposed to $1,300 at the original bank.
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Aug 24, 2017 01:35
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After going through the random online broker dance, I found that a decent local broker was actually able to come fairly close to the best offers online. Not beat them, but make it so that it was close enough that the track record of closing on time, and local appraiser, made it worth the small extra cost. I wouldn't say not to go with a rando from Zillow, but it's worth checking out who's in your area.
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Aug 24, 2017 01:36
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Just found out that between employer, state and city they offer 20k+ in grants/0% deferred loans. The kicker is that I need to basically buy next year to take advantage of it before a full year of my new higher income makes me go over income limits. Do I really want a house?
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Aug 24, 2017 02:24
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Well it's up to you but personally I wouldn't let 20k of grants/loans change my house-buying trajectory. Perhaps this is the perfect time for you and these are great programs but I wouldn't let a few incentives rush me into something I wasn't mentally or financially prepared for. Alternatively, you really want a house!
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Aug 24, 2017 03:00
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Punkbob posted:Just found out that between employer, state and city they offer 20k+ in grants/0% deferred loans. Were you going to buy before? Is 20k a significant % of the purchase price?
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Aug 24, 2017 03:20
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H110Hawk posted:Were you going to buy before? Is 20k a significant % of the purchase price? I’ve been considering it more and more as something I’d want to pull the trigger on in the next few years. I just took a new job somewhere I’d like to spend a few years at, that pays decently for the city I live in, which is a recovering industrial city with a ton of crime. So House prices are not super insane(like they are in a neighboring city). On the low end it’d be 10% of the purchase price. But I’m targeting houses in the 350k range so 5% or so. It also makes getting my down payment together take a significantly shorter amount of time with the caveat that my down payment goal isn’t going to be 20%.
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Aug 24, 2017 13:17
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Well $20k is close to the lower end of transaction cost so if prices don't crash, (big if), it helps cover the transaction costs of buying and selling if you need to sell and get the hell out. You still need to find a non money pit house, hahahaha they are all money pits.
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Aug 24, 2017 15:24
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I'm going to post my inspector's report if this deal fails, for informational purposes.
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Aug 24, 2017 17:49
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My closing might be delayed because my landlord can't deliver a document with a year's history of rental payments on it that also has my name on it. Real estate is the least-efficient, most bureaucratic, and most greedy field I've ever had the misfortune to be involved with.
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Aug 24, 2017 18:30
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totalnewbie posted:How much do real estate attorneys generally charge for this? I contacted a local firm in town and was quoted a price of 225/hr, approx. 1-3 hours depending on length of bylaws. Not going to buy this one because the bylaws don't allow me to lease out a room (I have to lease out the whole unit or nothing). Oh, well, I'm sure something else will pop up.
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Aug 24, 2017 18:36
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Evil Robot posted:My closing might be delayed because my landlord can't deliver a document with a year's history of rental payments on it that also has my name on it. Real estate is the least-efficient, most bureaucratic, and most greedy field I've ever had the misfortune to be involved with. Do you pay with physical checks or your banks bill pay? You can pull that information probably right out of their website. Otherwise you can call them and have them run copies.
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Aug 24, 2017 18:38
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Evil Robot posted:I locked rates for a jumbo 30 year loan at 3.875% in CA on 7/28 with Wells Fargo for what it's worth. Loan is a small multiple of income and my credit rating is >770. My understanding was that interest rates had declined slightly in August. But for some reason non-jumbo loans have higher interest rates than jumbos, so who knows. Wells quoted me yesterday 3.5% for a 30 year fixed. You need to have a relationship discount and deposit 250k but what you can do is park your down payment at the bank and move extra other money. And then move it back out after you buy.
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Aug 24, 2017 18:58
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Tricky Ed posted:Indeed, I quickly recognized a phrase my realtor used: "I think an offer of $X will get it done." This is not the best price for you, it is the price your realtor thinks the other realtor will push their client to accept. In my case, my realtor's number turned out to be $25k higher than my initial offer and $7k higher than the final accepted price. So, yeah, that would've gotten it done, and he would've made more money doing less work. Hmm. We offered list price on a house this week, since our realtor advised us that the house was appropriately priced. The selling realtor replied back that they received offers for 25k more than list and would be countering those offers instead. I guess here's one data point for a conservative realtor then.
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Aug 24, 2017 19:34
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Mandalay posted:We offered list price on a house this week, since our realtor advised us that the house was appropriately priced. The selling realtor replied back that they received offers for 25k more than list and would be countering those offers instead. Or an incompetent one, or one that just missed why this house was underpriced, or they got blindsided by these other offers because they haven't networked enough to get the inside scoop.
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Aug 24, 2017 23:07
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Yeah, I don't think it's at all unusual for the buyer's agent to informally ask the seller's agent whether they've been getting a lot of offers. Obviously you put the response through a bullshit detector filter, but sellers agents are always eager to tell you if they've received offers well over listing price. If your agent didn't do that they are probably a complete amateur. Most of the situations like that I was in (including the house I currently own) were basically "give us your best bid by midnight" situations, there wasn't any countering.
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Aug 24, 2017 23:42
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Andy Dufresne posted:Yeah, I don't think it's at all unusual for the buyer's agent to informally ask the seller's agent whether they've been getting a lot of offers. Obviously you put the response through a bullshit detector filter, but sellers agents are always eager to tell you if they've received offers well over listing price. If your agent didn't do that they are probably a complete amateur. The seller's agent told us there were 3 other offers by the time we put ours in. You're right, though, I was annoyed that our buying agent didn't find out what those numbers were. He ran comps in the tract to come up with his opinion, and we did tell him we didn't want to get involved in a bidding war. Now I'm a bit worried about his competence in predicting what a house will eventually sell for.
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Aug 25, 2017 01:52
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It's possible that he was correct too, and the other buyers are willing to pay a premium for one reason or another. Maybe they're getting their kids in the school. There are pitfalls that come with paying above list, like a low appraisal requiring cash at closing.
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Aug 25, 2017 02:27
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Mandalay posted:The seller's agent told us there were 3 other offers by the time we put ours in. You're right, though, I was annoyed that our buying agent didn't find out what those numbers were. Wait until you find out that you can do what your agent did in about 10 minutes of internet research, and that your argent is, on average, worse than a random goon.
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Aug 25, 2017 02:28
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| # ? May 31, 2024 21:38 |
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Do home prices vary based on the time of year? I have heard that early summer is more of a buyer's market as people prefer to move right after the end of the school year, and late summer is the opposite.
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Aug 25, 2017 03:42
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