aerohaga 0 #26 March 9, 2005 QuoteI've been involved in a few real estate transactions, and the best advice I can give is this: expect that everyone involved is trying to screw you(including your own agent). Make sure you read and understand all of the closing paperwork. The last house I sold there was a $1200.00 screwup on the closing docs, and if it weren't for me catching it, I would have been out that cash. Also, when you get the place inspected, be there and ask lots of questions. Home inspectors are not all created equal, and I've had inspectors miss major problems. And don't expect your real estate agent to watch your back. Of the realtors I've worked with, I'd say the vast majority are either incompetent, or just don't give a shit. Pay attention to the details...all of them. I guess that's why I never made any money in the real estate business (leaving it at the end of the month)-I DO give a shit and I've only had one client I'd like to screw , but that's a whole 'nother story.For my part, I know nothing with any certainty, But the sight of the stars makes me dream. -Vincent Van Gogh Quote Share this post Link to post Share on other sites
Beerlight 0 #27 March 10, 2005 QuoteThey do charge you a 2.15% funding fee, which is also financed, bringing your loan to 102.15% of the purchase price. You can pay the VA funding fee separately, thereby avoiding inclusion in your loan. Also, if you put money down on a VA loan, it reduces the VA funding fee. See www.va.gov for more.. And when the VA inspector goes out to inspect your potential purchase, DO NOT think he/she is there to protect "your" interest. They are only checking the appraisal on the home before the money is lent. Do you have veteran's disability? If so, your taxes can be reduced considerably. Also, the VA will not charge you the funding fee. If your mortgage lender (consult at least 3 before going with anyone), gives you a rate lock, have them fax the rate lock form to you all signed. Verbal agreements don't mean shit...... cnn.com finance area has tons of good info on purchasing a home. I'm in my 4th month of house hunting in Houston. And also a veteran...... Cheers, Buck Quote Share this post Link to post Share on other sites
DrewEckhardt 0 #28 March 10, 2005 QuoteOK thinking of buying a house...I know NOTHING about this. Realtors(TM) acting as buyer's and seller's agents usually each get 2.8 - 3% of the purchase price. You should be able to knock this off the price by doing away with one or both of them. A real estate lawyer can handle the paper work on either side for a few hundred dollars. Various companies can provide MLS access and a showing service which gives licensed realtors a seller's lock box code. Quote Share this post Link to post Share on other sites
JRock 0 #29 March 10, 2005 Don't buy a house... I will show you on paper that it doesn't pay to own it. Quote Share this post Link to post Share on other sites
Ron 7 #30 March 10, 2005 QuoteDo you have veteran's disability? If so, your taxes can be reduced considerably. Also, the VA will not charge you the funding fee. Yes I do....Where can I get more info on this?"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 35 #31 March 10, 2005 QuoteDon't buy a house... I will show you on paper that it doesn't pay to own it. I'd be interested in seeing that. I don't buy it. I fail to see how paying rent every month could be better than making an investment on property that grows in value. I don't know about his area, but my house has appreciated by 30% in 1 1/2 years. In FL, we get a $25,000 homestead exemption on our property taxes and of course there is the deduction we take on our federal taxes.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
jdhill 0 #32 March 10, 2005 QuoteI'm in my 4th month of house hunting in Houston. And also a veteran...... Make sure you take a look at the Texas Veterans Land Board Loan programs... if you qualify it can save some $$$. 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
airtwardo 6 #33 March 10, 2005 Quotehe average return in the 401k is 10% and the home loan is 5%, you are effectively losing 5% every year. Of 20grand that is $1000 a year that could be going to your retirement. *** Not necessarliy true, you also have to factor in the appreciation on the home and the difference between the larger DP lowering the interest paid in. true 1/3 of the interest is deductable but if the DP is large enough the lower monthly pmts will allow you to rebuild the 401 in no time. And in the 'long' run may be more cost effective to put a lot down up front. Keep in mind todays $ is worth more than tomorrows. !5-20-25-30? how long of a note are you considering? ~ If you choke a Smurf, what color does it turn? ~ Quote Share this post Link to post Share on other sites
RevJim 0 #34 March 10, 2005 Yea. My parent's 3/4 acre lot up here is worth more right now than when they bought the house in '70. Duh, right? Not really. What I mean is that if we were to level the 2 story, 3 bedroom, 2 bath, 3000+ square house, the garage turned office building across the driveway (another 750 sq feet) and the 24 x 36 pole shed with full concrete floor, the LOT would be worth more than they have paid. Leave those items I mentioned standing, and they have gained ~250 grand in equity. How in the world could that not be worth it? 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
AndyMan 7 #35 March 10, 2005 I'd love to see those numbers. The fact is that Americans generally have done very well through home ownership. In almost all cases, it beat renting significantly. If you've done better by renting, it's only because of the specifics of the area that you live. _Am__ You put the fun in "funnel" - craichead. Quote Share this post Link to post Share on other sites
tigra 0 #36 March 10, 2005 I soooooo disagree with that. Sorry if you had a bad experience, but that's just bad advice you are handing out! Quote Share this post Link to post Share on other sites
Gravitymaster 0 #37 March 10, 2005 QuoteDon't buy a house... I will show you on paper that it doesn't pay to own it. Please do. I'd be very interested in seeing your justification. Quote Share this post Link to post Share on other sites
skymama 35 #38 March 10, 2005 QuoteThe fact is that Americans generally have done very well through home ownership. In almost all cases, it beat renting significantly. I have a friend who doesn't even have a real 9-5 job anymore. He supports a family and has a large 2 story house of his own all off the money he earns from about 12 rental properities that he slowly bought over the years. I'm quite envious!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
Gravitymaster 0 #39 March 10, 2005 QuoteQuoteThe fact is that Americans generally have done very well through home ownership. In almost all cases, it beat renting significantly. I have a friend who doesn't even have a real 9-5 job anymore. He supports a family and has a large 2 story house of his own all off the money he earns from about 12 rental properities that he slowly bought over the years. I'm quite envious! Owning 12 rental properties can be a full time job if you have tenants who call everytime the least little thing goes wrong. Even so there's constant upkeep like painting, appliance repairs/replacements, leaky faucets, lawncare etc. However when you consider the appreciation on that much real estate, it's not a bad paying job. Quote Share this post Link to post Share on other sites
RevJim 0 #40 March 10, 2005 QuoteQuoteQuoteThe fact is that Americans generally have done very well through home ownership. In almost all cases, it beat renting significantly. I have a friend who doesn't even have a real 9-5 job anymore. He supports a family and has a large 2 story house of his own all off the money he earns from about 12 rental properities that he slowly bought over the years. I'm quite envious! Owning 12 rental properties can be a full time job if you have tenants who call everytime the least little thing goes wrong. Even so there's constant upkeep like painting, appliance repairs/replacements, leaky faucets, lawncare etc. However when you consider the appreciation on that much real estate, it's not a bad paying job. that depends too though. Some rental property never really increases. Wear and tear of most tenents sometimes even outpaces appreciation. It's a fine line, especially when you bring anti-descrimination laws into picture. The single mom with 9 kids that has been on welfare for 20 years and lost security deposits on 4 apartments in the last year, for example, will sue your ass in court, and win, if you don't rent to her. The best you can do sometimes is accept the fact that at some point you;re gonna take a hit and be ready for it. Those that aren't.... well.... Check the banks in your area for repo's. We did, and got a house reaaaaaaly cheap.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
skymama 35 #41 March 10, 2005 QuoteOwning 12 rental properties can be a full time job if you have tenants who call everytime the least little thing goes wrong. Even so there's constant upkeep like painting, appliance repairs/replacements, leaky faucets, lawncare etc. However when you consider the appreciation on that much real estate, it's not a bad paying job. Oh yeah, he does end up going to the houses for upkeep but it still doesn't equal anywhere near 40 hours a week of his time.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
JRock 0 #42 March 10, 2005 Here you go.... Suppose you pay $250,00.00 for a house and put 10% down. Assuming no closing cost, you have financed about $225,000. You monthly interest payment at 6% is $1352. Being conservative, lets add in real estate tax of $2,500 per year ($208/m) (Depending on where you live this could range from $1200 to $6000 per year); insurance; $50/m, maintenance $100/m (lawn, building, heating, air conditioning, appliance, etc. repair). We will neglect utilities like water and sewer that are not usually covered by landlords and the increased gas and electric usage due to the stand alone nature of single family dwellings. Assuming you finance the home for 30 years and you want to sell it in five years, your monthly cost is 1,352+208+50+100=$ 1,710. At the end of five years you still owe $ 209,165.20. In the five year period you paid $25,000 down, $15,835.80 in principle, $65,282.20 in interest and $21, 480 in taxes, insurance etc.... or $128,568 out of pocket. This is $2,127/m. You can rationalize that since the down payment and the decrease in the loan amount were really "Cost to own" your cost to own was just $86,762.20. Consider if you invested the $25,000 for five years at 6% (very conservative) you would have earned $8,721.25 and if you put $358/m into the same type of investment for five yeas it would be worth $25,102.8. WOW! A $33,824 opportunity cost of money. Summary if you rent at $1325 per month (house or apartment for the same cost of you monthly mortgage payment) it would have cost you $79,500 in rent less $33,824 = $45,676 ($761/m) vs. $128,568 ($2,143/m) if you purchased a home. Calculations: Own: ($2,127/m x 60 months) = $128,568 + $33,824 (opportunity cost of money) less the reduction in loan principle (savings) of $15,836 and the down payment $25,000 = $121,556 ($2,026/m) Rent: $1,352/m x 60 months = $81,120 less opportunity cost of money $33,824 = $47,296 ($788/m) 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. Quote Share this post Link to post Share on other sites
Gravitymaster 0 #43 March 10, 2005 Just one thing wrong with your numbers. My $300,000 home I purchased less than 2 years ago is now worth $435,000. That averages out to 22.5% per year. Based on that continuim my house will be worth $799,645. by the time I own it 5 years. Please don't say it will never continue at that rate. People have been making tha t assessment about the real estate market in this area for many many years and have been proven wrong year after year. I plan on purchasing at least one more property this year and should be able to retire with well over a million $$$ in less than 10 years. Or I could go out and rent a house in my neighborhood for $2000. per month. Quote Share this post Link to post Share on other sites
JRock 0 #44 March 10, 2005 You obviously didn't take everything into consideration before you made your post.... Say you need to sell your house tomorrow.. Out of the gate for realty fees is gonna cost you $30,000. So now you are down to $105,000. What have you paid in taxes, and all the maintenance and opportunity costs? You might be on the plus side some.. .but you are certainly not looking at everything. Numbers don't lie. And seriously.... you will not get 20% return on your house every year. Quote Share this post Link to post Share on other sites
AndyMan 7 #45 March 10, 2005 QuoteNow, 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. Well, that's the thing. 305,304 - 250,000 = 55,304 55304/250000*100 = 22.1216 So you'd need a market rise of %22 over 5 years to sell at $305,304. That's easy. Real Estate has been increasing on average %10 / year for the last decade. If history is any indicator (and it usually is), %10 over 5 years would give you $402,628 Hot markets, like California, Florida, and the Boston/New York Corridor are seeing %30 per year. Using 20% (conservative for New York), if you sold after 5 years you'd end up with $622,080 Now I'll grant that it'll be dificult for the market to continue increasing by %30/ year for long, but it will certainly outbeat the Dow for the conceivable future. You can also stack the odds in your favor by buying New Construction. You usually get up to a %20 discount by buying pre-construction. We did that with our condo, and our property values went up %10 the day we closed. Unless you live in an area where property values are declining, or stagnating - buying real estate is a very good investment. More importantly, though - you end up paying your own mortgage, not somebody elses. In these "hot markets", it's especially important, because if you're not paying your own mortgage, you're renting from someone paying his. In this case, it's even wiser to be paying your own, instead of someone elses. _Am__ You put the fun in "funnel" - craichead. Quote Share this post Link to post Share on other sites
jdhill 0 #46 March 10, 2005 You left out the tax benefit... you get to deduct the interest portion of your payment from your federal taxes, as well as the property taxes... Your opportunity cost of money assumes that the money is invested, not spent... which is not a given. And your selling price is not out of the question... it all depends on the market... 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
JRock 0 #47 March 10, 2005 You all are still not following what I put down.. you keep looking at appreciation.... you speak nothing of cost.. Do what you want... sometimes you will come out ahead. Quote Share this post Link to post Share on other sites
Gravitymaster 0 #48 March 10, 2005 QuoteYou obviously didn't take everything into consideration before you made your post.... Say you need to sell your house tomorrow.. Out of the gate for realty fees is gonna cost you $35,000. So now you are down to $100,000. What have you paid in taxes, and all the maintenance and opportunity costs? But I don't need to sell my house tomorrow. If I thought there was any reasonable chance I would have to, I wouldn't have purchased it. Using your arguement, I shouldn't have any money in the stock market either QuoteYou might be on the plus side some.. .but you are certainly not looking at everything. Numbers don't lie. And seriously.... you will not get 20% return on your house every year. Oh, but I disagree and I can point you to long term statistics in this area to prove the odds are I will. But lets just assume for a second that you are correct and I only get 10% over the next 3 years. My home would then be worth about $580,000. Thats almost double my money in 5 years. Tell me another investment that offers the same security as real estate that gives you that kind of return. Not including the taxes and interest are tax deducable (which I definitely need). Quote Share this post Link to post Share on other sites
jdhill 0 #49 March 10, 2005 QuoteOut 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 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
JRock 0 #50 March 10, 2005 I don't know where you live, but realtor fees are usually 7%. Granted that can be negotiated. Again... numbers don't lie.... Quote Share this post Link to post Share on other sites
