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First-time home buyer seeks help making a good investment

mintchip — Fri, 22 May 2009 19:08:57 -0800

First-time home buyer seeks help making a good investment I am interested in purchasing a short sale property. I am a first time home buyer. I'm hoping to buy an undervalued condo, live there for a few years to build equity, and hopefully trade up in a few years if (when?) prices begin to bounce back. The places I've been looking at would cost approximately the same or slightly less than renting the same type of unit...so my hope is that this is a low-risk proposition since I need somewhere to live anyway.

I am just learning about all of this so I have a lot of questions.

1. How can I tell if a property is undervalued? For example, I recently saw one that sold only a few years ago for approximately twice what I could get it for now. Assuming the inspection is clear, can I reasonably conclude that this short-sale property is undervalued?

2. What do I need to know about purchasing a short sale property? If they are a good value, why aren't more people buying them?

3. How much does the "assessed value" tell you? For example, I looked at one property that will sell for $150k less than last year's assessed value versus one that's only $35k less than the assessed value. In other words, if the sale price is close to the assessed value, am I less likely to make a profit upon resale?

4. I have substantial fixed-rate student loan debt. I can lower my monthly payments by consolidating over a longer repayment term (25 years). However, this will cost me more interest in the long run. What would make a bank look upon me more favorably--lower monthly payments or my attempt to pay it off faster?

5. What are the best resources to learn what I need to know?

Go on take the money and run?

ian1977 — Mon, 18 Aug 2008 18:51:52 -0800

Use the new Federal Housing Tax Credit as an investment seed? Is there anything fundamentally wrong with this idea?:

Take the new Federal Housing Tax Credit and dump the $7500 into a Roth IRA. Repay the 'credit' at the normal rate (~$500/year for ~15 years I think).

This seems like a no brainer to me, but I am not very financially savvy. Its essentially a no-interest loan, so it I would think that investing no-interest money is a win-win, but then again, I'm dense enough that I once thought I had a system to beat a casino's video roulette machine. (long story short, I emphatically did not)

Thoughts? Is there a better way to optimize the 'credit'? Is it best to leave it alone?

Bonus points for finance/investment gurus: Assuming moderate gains (8%???), how much ahead am I by being able to invest the $7500 up front, versus the alternate scenario of investing $500/year for 15 years.

Seattle's Best...Family Housing?

hrbrmstr — Tue, 05 Jun 2007 18:54:49 -0800

Where to start looking for older, affordable family housing in Seattle? In mid-June, my wife and I will be in Seattle over the weekend (2-3 days). The visit is to both interview in person for a position and to scope out housing options. There are six of us and a golden retriever that are potentially moving from a 200 year old Victorian farmhouse with barn+outbuilding on a 1-acre lot. Despite how the property+house sounds, the whole deal was below $200K.

Where should we start looking for older/affordable homes in and around the Seattle area? I'd prefer not to have a hellish commute (for my current job here on the east coast, I drive ~50 miles one way to work...ugh) and we'd prefer non-newer homes (we just like older homes and see no need to perpetuate the environmentally & economically harmful building craze).

We don't need the land, per-se, but the 6 folks in question are mom, dad, daughter, son, toddler and grandma, so we need some room.

(Now that I've typed that question out, I'm calling my sanity into question for even thinking of moving...)

How can I crack the whip / get my realtor to move my property?

jkl345 — Mon, 30 Apr 2007 22:24:26 -0800

My realtor has gone from a proactive go-getter to a neglectful, smarmy do nothing. I need to sell my condo (I know the market is bad) but it's a nice place in great condition and priced in line with others in the market. How can I get it to move quicker? THE SITUATION:
She acted all proactive and excited when I interviewed her, she said she has 20 years in the selling homes, promised it'd be occasionally advertised in publications (Remax buys a page in the paper and rotates houses they have for sale). But ... In the past 5 months, 7 people have viewed it and it hasn't been advertised at all. Every time I talk to her I ask about the ad she always dances around it and says it's coming, saying things like "Ads don't sell your place" and I'm just like, " M.F. ok. Ads don't sell it, but you sure don't either!".

I know the market sucks, and sure, ads are the old way to sell places (everyone just goes online now and looks at MLS listings) but is there anything I can do to actually make her do her job better and get traffic through the condo?

I chose her over several others, and she edged out an independent Realtor recommended to me by a friend because I figured with Remax they'd have more clients/brand recognition coming through, but I'm really regretting it. (ADVICE TO ANYONE: To be honest, if I was going to do it again, I'd sell it myself, building a cool site with virtual tours, tons of photos, craigslisting it and paying $300 or so to an agency to list it in the MLS, with a juicy seller commission of 3.5 or 4 percent.)

I'm locked into a contract with her until the end of May. I'm not sure what to do until then (or even if I should bother looking for someone new when the contract ends). This is lame. I never want to buy a home again. I'm in Florida, by the way.

MY FINANCIAL SITUATION
My financial situation is pretty good. Right now it's not fun carrying a mortgage and rent, but I recently received a promotion and have also been doing a lot of freelance work every weekend and most nights, (and I also had about $10,000 saved to buffer me through this selling period, luckily I haven't had to touch that.). I live very frugally. So, 'in theory' I could continue to float like this for a while... It's not comfortable though. One car accident and I could be in trouble. (BTW: Moving out of the condo and renting closer to work actually saved me so much on Cable/Internet/Gas/Electricity/Wear and tear on my car/tolls/time that it's really only costing me about $120 more a month, compared to when I lived in the condo. I used to commute an hour a day each way and getting that time back is definitely worth $120 a month in extra expenses.)

$1000 KICKBACK?
One friend has suggested that I ask the Realtor to add a "$1000 cash bonus to the Realtor/individual that brings me the buyer." statement to the listing. I'm not sure if that's even legal or what. Part of me thinks the Realtor is not as uh, "motivated" as she was originally because the independent was only asking 4 percent (2/2 seller/buyer), so she had to lower her rate to be competitive. (The commission is 2.5/2.5 to seller/buyer on the condo). Anyone tried this? How much does half a percentage matter to a realtor?

RENTERS?
I know what your thinking, get some renters in there. Right now it's sitting empty (yes I know, I've considered renters, but it's in brand new condition, it was totally refurbished when I bought it and I left it in immaculate shape and upgraded it. I don't want to deal with renters possibly destroying it, and showing it while renters are in it and insuring it for renters and the condo association with renters... I need to make the sale the quicker the better (especially before hurricane season), so I can't really have them sign a contract then boot them.

SLASH THE PRICE?
I can't drop the price much more or I'm going to lose money (right now after all is said and done, I'll make about $5000-10000 depending on the final price/terms or maybe just break even--since so many sellers are expected to pay all the closing costs with the horrible market...)

DITCH HER AND DO IT MYSELF?
After the contract ends at the end of this month (May) should I just go 'For Sale By Owner' and sell it like I described above under "ADVICE FOR ANYONE"? Post it on EBay? Burn it down and collect the insurance? Any ideas/success stories would be great!

Any advice, links, etc. you can offer on how to sell and survive in this rough market, would be greatly appreciated!

California Housing Market

matthelm — Mon, 26 Mar 2007 10:46:17 -0800

How does one monitor the Housing Market of Southern California? I would like to purchase a condo in the next couple of years and would like to know when the "best" time to buy is. I am a first time buyer and slowly picking up the knowledge to what it takes to buying a place.

Is it cheaper to buy a house or build one from scratch?

designbot — Mon, 14 Nov 2005 11:14:58 -0800

Is it cheaper to buy a house or build one from scratch? As we all know, housing prices have shot up like crazy in the last few years. It seems like the cost of labor & materials can't have gone up as fast. Is it cheaper to build a house than to buy a pre-existing one? Is it difficult to find unused lots around major cities? How much do architects/contractors/etc. cost? Does anybody know some good resources for learning about the process? I'm in the market to get my first home soon, and it seems like it would be great to get exactly the layout & features I want instead of hunting around for an overpriced place that's "almost good enough." I'm not a handy person, so I don't think I'd want to be my own contractor, or remodel an existing home. If anybody has experiences with getting a home built, I'd love to know what you think the advantages or disadvantages are.