Gravitymaster 0 #51 March 10, 2005 QuoteQuoteOut of the gate for realty fees is gonna cost you $35,000. That is overstated... if we are talking about his house @ $435K RE commission and title insurance is only about $27K... if we are talking about you hypothetical house it is only about $19K J Yep. In this market, I could either stick a "For Sale" sign in my front yard and run an ad in the newspaper and I guarantee it would sell in less than 2 weeks. I'd save all the RE Commissions. While I somewhat agree there are some markets that it may be better to rent, I'd say thats the exception rather than the rule. Quote Share this post Link to post Share on other sites
AndyMan 7 #52 March 10, 2005 Quote You all are still not following what I put down.. you keep looking at appreciation.... you speak nothing of cost. I used YOUR numbers. You already accounted for cost. Your example, of selling at $305,304 - is an annual gain of just over 4%. The national average is 10%, and hot markets are %30. Moreover, you don't pay capital gains on your primary residence. You do on any other investment. Also, interest on the mortgage is tax deductable. _Am__ You put the fun in "funnel" - craichead. Quote Share this post Link to post Share on other sites
ladyskydiver 0 #53 March 10, 2005 QuoteI don't know where you live, but realtor fees are usually 7%. Granted that can be negotiated. Again... numbers don't lie.... So then why do you own? Life is short! Break the rules! Forgive quickly! Kiss slowly! Love truly, Laugh uncontrollably. And never regret anything that made you smile. Quote Share this post Link to post Share on other sites
JRock 0 #54 March 10, 2005 Cuz I am a retard.... I should have listened to my parents. I now have three beautiful dogs and need a yard. They are the only reason I have a house. Quote Share this post Link to post Share on other sites
jdhill 0 #55 March 10, 2005 Well, in Houston, 6% seems to be the norm. And that assumes you use an agent at all... in some markets you can get the buyer to pay those too... JAll that is necessary for the triumph of evil is that good men do nothing. - Edmund Burke Quote Share this post Link to post Share on other sites
AndyMan 7 #56 March 10, 2005 Also, if you buy new construction you don't need an agent on either side. Total closing costs on our condo were about two percent. _Am__ You put the fun in "funnel" - craichead. Quote Share this post Link to post Share on other sites
airtwardo 7 #57 March 10, 2005 QuoteWell, in Houston, 6% seems to be the norm. And that assumes you use an agent at all... in some markets you can get the buyer to pay those too... J *** I'm just North of Houston... We have a couple houses here and some others spread around the country. (wife like to 'collect' things) Negotiate with several realtors, there are plenty of them out there that will take considerably less... even 2-3%. If you know what you're doing and don't run THEM ragged. *** ~ If you choke a Smurf, what color does it turn? ~ Quote Share this post Link to post Share on other sites
airtwardo 7 #58 March 10, 2005 QuoteSay you need to sell your house tomorrow.. *** Actually there is something to what JRock is saying...if you HAVE to sell in the first 1-5 years you 'might' end up 'upsidedown' depending on the DP and the market... But...if you gotta dump it that early, you may have made a bad decision buying in the first place. ~ If you choke a Smurf, what color does it turn? ~ Quote Share this post Link to post Share on other sites
DrewEckhardt 0 #59 March 10, 2005 Quote Now, can you sell the house and for what price? You need $250,000 + $33,824 + (358 x 60 = $21,480) = $ 305,304 to break even after closing. Nope. With state taxes and business expenses I'm already itemizing. Every dollar I pay in interest and non-federal taxes cuts my bills by a total of $.33 from the feds and state . So my post-tax income impact is 51753 not 77782. I need just 279275 to break even. Lets assume that I'm lazy and don't do a FSBO. So I need to sell for $295842 to break even. The national average housing appreciation is 5.56%, or 39% over 5 years. That gets me $347,500. I do $51K better than I did by investing. I prefer living in fun places. Fun places mean hot real estate markets. My property has appreciated 60% in five years. $250000 * 1.6 = $400,000. So in this market I net $104K. Other hot markets are also in the double digit range. The lowest appreciation rate is 2.14%, or 11% over 5 years to 277500. If I lacked the sense to live someplace fun I'd have lost just $2K. This also ignores the effect of rent increases. My property was a rental before I moved in for about $1100 a month. In nice shape it could rent for about $1500 today. With similar rent increases your $1352 would increase to $1844/month. I'd have paid $15K more in rent increasing my win to $119K in my market. Using numbers for other markets are left as an exercise for the reader. In a high-traffic area I'd do a FSBO. Pay maybe $350 for a real-estate lawyer and $650 to get an MLS listing and showing service. That would inrease my take $10200 in my market for $129K in gains. In an average market I'd get another $8730. In the worst market I'd make $6770 more which would make me positive even if rents were stable. Of course the first $250K of capital gains ($500K for married couples!) on your primary home is untaxed. If your quoted 6% return is purely capital gains I'd be getting just 5.1% in post-tax money. 6% in purely interest would be returning just 4% post-tax. Buying a home is usually a huge win. Paying it off faster may not be if you're good at picking mutual funds. Quote Share this post Link to post Share on other sites
JRock 0 #60 March 11, 2005 Not a lot of finance majors on DZ.com. Quote Share this post Link to post Share on other sites
Gravitymaster 0 #61 March 11, 2005 QuoteNot a lot of finance majors on DZ.com. Can you be more specific about what you disagree with in his calculations? Quote Share this post Link to post Share on other sites
RevJim 0 #62 March 11, 2005 QuoteDo what you want... sometimes you will come out ahead. Fine. I'm not going to argue this, just state one thing. Sure, you may come out ahead if you buy, but one this you can take to the bank as fact is this: If you rent, you will NEVER come out ahead, or even break even. In fact, every cent you pay to rent is GONE. Your choice though.It's your life, live it! Karma RB#684 "Corcho", ASK#60, Muff#3520, NCB#398, NHDZ#4, C-33989, DG#1 Quote Share this post Link to post Share on other sites
Gravitymaster 0 #63 March 11, 2005 QuoteQuoteDo what you want... sometimes you will come out ahead. Fine. I'm not going to argue this, just state one thing. Sure, you may come out ahead if you buy, but one this you can take to the bank as fact is this: If you rent, you will NEVER come out ahead, or even break even. In fact, every cent you pay to rent is GONE. Your choice though. Or.. you can disagree with me but you are wrong although I can't quite explain why. Quote Share this post Link to post Share on other sites
tkhayes 348 #64 March 11, 2005 Block hom ein Florida, Insurance companies do not like to insure framed homes from what I know. Even though they meet the standards on paper. Also termites are a real long-term issue. But block homes have crappy insulation. Pour lots in the attic, and try to get double insulated glass windows. Overall energy costs here not too bad overall. Closting costs: Question EVERYTHING they put in front of you and ask if that is mandatory or not. So much of it is included as 'normal', but you or the seller may also be able to decide if you want them, like the title insurance and such. TK Quote Share this post Link to post Share on other sites
SkyDekker 1,465 #65 March 11, 2005 QuoteFine. I'm not going to argue this, just state one thing. Sure, you may come out ahead if you buy, but one this you can take to the bank as fact is this: If you rent, you will NEVER come out ahead, or even break even. In fact, every cent you pay to rent is GONE. Your choice though. Very true, but there certainly are situations where renting is more adventageous than owning. But only in relatively defined scenarios, with very structured people. Owning a home is a built in, forced investment plan, it is not easy to get your money out, and when you do it is expensive. If you are single and okay with living in a cheaper 1 bedroom apartment it will always be cheaper to rent, specially if you can find a place with utilities included. If your family circumstances require you to have a 4 bedroom house, this scenario doesn't work anymore. The further assumption is that when you rent, you are able to save all the money you would otherwise spend on the house. If you are not as good with saving, the scenario doesn't work anymore.... There are a few other scenarios in which renting is better than owning, but they are all relatively defined and specific. In Canada less so because here interest paid on a mortgage is NOT deductable, increasing the cost of home ownership. I think this discussion just proves that most times blanket statements are not valid. Quote Share this post Link to post Share on other sites
Ron 10 #66 March 11, 2005 Put an offer on a block house on 17th this morning. I'll know tonight if I get it. 2 bed 1.5 bath 1/2 acre lot. Needs a dishwasher, paint and carpet in the MB."No free man shall ever be debarred the use of arms." -- Thomas Jefferson, Thomas Jefferson Papers, 334 Quote Share this post Link to post Share on other sites
wmw999 2,452 #67 March 11, 2005 Good luck with it, Ron. Plenty of room for camping and skydiver trailers in the back yard, eh? Wendy W.There is nothing more dangerous than breaking a basic safety rule and getting away with it. It removes fear of the consequences and builds false confidence. (tbrown) Quote Share this post Link to post Share on other sites
Ron 10 #68 March 11, 2005 QuoteVery true, but there certainly are situations where renting is more adventageous than owning See I thought about this a lot...Still don't have a good answer. I'm saving 47% of my income right now...But I am living in a trailer on the DZ....Not bad, but it can get old after a few years. So I started looking at houses. Everytime I looked...Prices went up. I saw a house I wanted to look into a few years ago...120,000. Today it is selling for 160,000. One place I looked at had new homes for sale. I came back the next day to look at the inside of one...They went up s grand. My buddy just put down money on a nice 190K house....The cost of the house went up 13k since they put the money down...They locked in at the lower rate by me trying to buy the same house would be 13k more. I am looking for a small house with 2bdrs. I basicly want an apartment with a yard that I own....Prices for that around my area are 100k. And they are selling in 3 days. I just made an offer on one for 93k, they were asking 96...I am willing to bet I will not get it."No free man shall ever be debarred the use of arms." -- Thomas Jefferson, Thomas Jefferson Papers, 334 Quote Share this post Link to post Share on other sites
skymama 37 #69 March 11, 2005 QuoteI just made an offer on one for 93k, they were asking 96...I am willing to bet I will not get it. One of my friends is a Buyer's Agent. She said the sales around here are crazy. A couple years ago, you could bid under the asking price like that. Now, she said if someone has an open house, they'll get 5-6 offers that day at the asking price or over it. I'm glad you're going with the block house. Be careful with what type of exterior paint you buy. People found out in the hurricanes that good paint really makes a difference.She is Da Man, and you better not mess with Da Man, because she will lay some keepdown on you faster than, well, really fast. ~Billvon Quote Share this post Link to post Share on other sites
wmw999 2,452 #70 March 11, 2005 QuotePeople found out in the hurricanes that good paint really makes a difference. Hurricane or not, good paint really makes a difference. On indoor walls that are easy to repaint it's not such a big deal, but on woodwork (which is a pain in the ass to do), or the exterior (which is how you keep the water out), do some research and consider it as cheap insurance. It's out there every single day. Wendy W.There is nothing more dangerous than breaking a basic safety rule and getting away with it. It removes fear of the consequences and builds false confidence. (tbrown) Quote Share this post Link to post Share on other sites
Buried 0 #71 March 11, 2005 QuotePut an offer on a block house on 17th this morning. I'll know tonight if I get it. 2 bed 1.5 bath 1/2 acre lot. Needs a dishwasher, paint and carpet in the MB. g/l! Where is my fizzy-lifting drink? Quote Share this post Link to post Share on other sites
Beerlight 0 #72 March 11, 2005 Ron, Veterans advantage on taxes. Yep. You'll need to take your disability documentation to your tax appraisal office and show them. (I'm guessing this is US wide?), and not Texas specific. Your mortgage company will need your veterans (I forget the document #), that will eliminate the VA origination fee. And on those home repairs, have that written into the contract! and they might repair them instead of yourself!! Ask for them to pay closing, ask for the freakin moon... Read everything. Sign nothing unless you are fully aware. Also, the contract should state that the VA must approve home before you will buy, and you will only purchase upon a satisfactory rating by an inspector of your choosing. All in writing. Do not take a verbal on anything. Personally, I would consult a real estate lawyer and let them look over any documention before you go to closing..... Good luck amigo..... Buck Quote Share this post Link to post Share on other sites
ladyskydiver 0 #73 March 11, 2005 Good luck! Life is short! Break the rules! Forgive quickly! Kiss slowly! Love truly, Laugh uncontrollably. And never regret anything that made you smile. Quote Share this post Link to post Share on other sites
tigra 0 #74 March 11, 2005 Definitely use an attorney- the contract should have an attorney approval period. And also, the VA inspection really isn't the same as a home inspection. A good home inspector checks for more than the VA inspector will. The VA inspector has a checklist, and they'll look at some really nit picky stuff but overlook some obvious things as well. Really-who cares if your handrails are secure and all your electrical outlets are covered properly if you have toxic mold in your bathroom? Quote Share this post Link to post Share on other sites
Ron 10 #75 March 11, 2005 QuoteYour mortgage company will need your veterans (I forget the document #), that will eliminate the VA origination fee. Got it thanks. QuoteAnd on those home repairs, have that written into the contract! and they might repair them instead of yourself!! Ask for them to pay closing, ask for the freakin moon... Read everything. Yeah the house owner will not fix the issues. That was quite clear that he bought this house as an investment. He was asking 96k for it, so I offered 93k. I think I have almost no chance since there was another offer made the day before....Any rate I will know tonight. I figure for 3 grand I can get some skydivers, paint and beer and get the inside rooms painted. I have a friend that told me whould get carpet and have it in in less than 4 hours and it would not cost much at all. The dishwasher....Well it will take longer, but Ialways have Joy and my two hands till I get that done... Of course all of this is mute if he rejects my offer...Which could very well happen in this houseing market... Im tellin ya, I have seen houses gone in 2 days. My only real hope is that he knows my VA backed loan will go through since this house was under contract and the financing fell through."No free man shall ever be debarred the use of arms." -- Thomas Jefferson, Thomas Jefferson Papers, 334 Quote Share this post Link to post Share on other sites
