Buying a House

Ah_Tibor

Woodpecker
Woman
(I think there's a similar thread in the men's forum somewhere.)

So, short version: my husband and I want to move out of our apartment/area. Too small, too expensive, want to move closer to family, etc. We are probably going to move into another apartment, but most of the advice coming at us is some variety of "what a waste of money, a house is a good investment."

Our issues: most of the houses right now are at WAY above market value. There's a feeding frenzy going on, we can't even look at anything in our price range before it gets sold. We'd also be sinking a big chunk of our savings into it. We don't have any debt, so this would be a big purchase for us.

My general impression is that there's going to eventually be a slowdown and even buyer's remorse for a lot of people, which would be a better time to buy.

(This is of course barring general paranoia about the future.)
 

DelMarMisty

Robin
Woman
My husband and I are in a similar situation, in limbo, renting not sure what to do. As much as it is very untraditional of me, I love apartment living. I am either interested in homestead or apartment, mid suburban homes are overpriced, made cheaply, and full of normies. I get the same from people 'you'll miss out on money" but sometimes an apartment allows you to be in a better area..... Its a tough one!
 

Mrs.DanielH

Robin
Woman
We are in a very similar boat. We are staying with family for the time being. I strongly feel that renting is a waste of money, but if the political climate gets much worse we might have to rent to get out of the area. I feel like we are in a catch-22. Because inflation is rising more than we can save money and I'm not convinced that housing prices are ever going to go back down. We want a homestead in the middle of nowhere, but honestly there's not much available and we wouldn't have any support system. Our stupid normie boomer parents want to stay in their expensive suburbs, which we can't afford to live in and are uncomfortably close to a large city.
 

stemaham

Chicken
Woman
It's tough overpaying, but the interest rates are still low but creeping up. You can take a few examples of a higher mortgage with a lower interest rate vs lower mortgage with a higher interest rate. You may see see that it's better to pay for a higher mortgage with a lower interest rate over the long-term cost of the house. Of course, that means dealing with this feeding frenzy right now! Prayers for you & everyone else in this mess!!
 
There's nothing wrong with renting. I probably wouldn't do it myself but that's because I own my home and it wouldn't make sense for our financial situation (our mortgage is a few hundred dollars vs high rent).

I agree with you there will be a slow down, especially given some of the statements made by the government. They can't hold all those defaulted mortgages forever. My advice would be to stop listening to everyone unless they have extensive experience in the realm in question. However this is true for almost every decision your family will make.

Throughout my life I've had people say similar things to me about many big choices, several of which turned out to define our financial independence when we went our own way. Not only are there too many factors for other people to know or understand about your life, most people are just telling you some BS they're invested in believing. Worse most people really are stupid and ignorant.

Do the numbers, ask yourself what your priorities are, look at your options...then politely ignore everyone else.

Edit: plus from a man's perspective...everything is a risk. Find how comfortable you are with whatever risk. Then act without remorse or regret.
 

Ah_Tibor

Woodpecker
Woman
We are in a very similar boat. We are staying with family for the time being. I strongly feel that renting is a waste of money, but if the political climate gets much worse we might have to rent to get out of the area. I feel like we are in a catch-22. Because inflation is rising more than we can save money and I'm not convinced that housing prices are ever going to go back down. We want a homestead in the middle of nowhere, but honestly there's not much available and we wouldn't have any support system. Our stupid normie boomer parents want to stay in their expensive suburbs, which we can't afford to live in and are uncomfortably close to a large city.

Properties in the middle of nowhere are avaliable in our state hahah. My dad also pays about $500/month for his rent.

We're near the city so the houses in our town go for about 400-800k. Out by my brother houses are 150k on average.

My husband grew up in suburban area so that's what we're looking at right now. It's fairly reasonable.
 

TexasJenn

Robin
Woman
No one can say what the housing market will do. I will say unequivocally that I became a homeowner as soon as I could afford to and would do the same now. Though it's definitely a hot market, you still might be able to find a deal. I'd start browsing the listings and get a feel for what's out there. If you find something reasonable and have the money for a good down payment (20% is best to avoid the onerous Private Mortgage Insurance, but 10% will typically do), I'd go for it.
 

Cr33pin

Peacock
Gold Member
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Ah_Tibor

Woodpecker
Woman
No one can say what the housing market will do. I will say unequivocally that I became a homeowner as soon as I could afford to and would do the same now. Though it's definitely a hot market, you still might be able to find a deal. I'd start browsing the listings and get a feel for what's out there. If you find something reasonable and have the money for a good down payment (20% is best to avoid the onerous Private Mortgage Insurance, but 10% will typically do), I'd go for it.

Yeah. This is our general plan.

Dave Ramsey had a video that said new houses weren't being built for over a year, so people are panicking and buying up old houses. I think there's a lot of apartment exodus too b/c lockdowns

I like old houses (I would like something pre-war, preferably) but my husband is in the boat of "if it looks like sh*t to start I don't want it." (I saw a bungalow in our price range but it needed some cosmetic tlc. I think he would probably enjoy working on stuff but his parents raised them with the "there are people for that, you'll just screw it all up" mentality)
 

Leeloo

Woodpecker
Woman
We’re looking for a modest home to stop renting as well. I want to buy a house so bad! We’ve been looking for 2 years, and of course last year was a wash. I’m torn between wanting to own immediately because I’ve been ready for so long vs. Waiting a little longer for a better time to get something at true value.
 

Steiner

Sparrow
I am a real estate agent on the side of my main job. Originally, I got my license because there was a sale on the course, and I was interested in knowing more about the process of buying a home before I went to go buy one.

So I took the course and ended up working with a brokerage in my new town, so I've gained a bunch of experience behind the scenes of the entire transaction. I've worked with tons of first time buyers.

That being said - It is very hard to time the market. Even though we see a bubble building, there's no telling exactly when it will pop. So I wouldn't hold off on owning property/a house until then if you saw something that fit all of your needs. However if you're still on the fence, saving money for that 20% down payment over the next 6 months to a year would be wise.

The key is finding something you can afford and living below your means. Maybe even look a little further away from the hottest zones.
Also, the only good time to buy is when it is right for your individual situation. Nothing wrong with renting, as long as you can still afford to save along with it.

The market is pretty crazy at the moment, I've seen double digit offers on homes within the first day they hit the market, bidding wars, everything. So giving it a little more time can't hurt, but then again don't wait for the bubble to pop if you see something that fits your budget and needs.

There are also tons of opportunities for first-time buyers, with flexible down payments etc. A good mortgage broker would be able to guide you through this.

Let me know if you have any more questions about the process, I'm happy to help anyone here on the glorious RV FORUM
 

Kitty Tantrum

Woodpecker
Woman
I'm not crazy about renting, but my issue with the idea of buying a house is that most houses are crap.

I have a female friend/acquaintance who is a realtor, and a fairly successful one who tends to be involved in a lot of "nicer/higher-end" home sales in my area.

Having the insight that I have into her process of "staging" homes confirms everything I always suspected: people pay anywhere from tens- to hundreds-of-thousands of dollars TOO MUCH for what amounts to a very pretty facade applied to a mediocre home.

This woman could probably sell a house made from pressed cardboard for half a million dollars. That's only a little bit of an exaggeration.

I will never buy a home that has been renovated, redecorated, staged, "curb appeal"d, etc. I will probably never buy a home that has been listed by a realtor at all.

I'm not paying what amounts to an INSANE HOURLY RATE for some woman to bring in temporary furniture and decorations and paint walls and trim the shrubbery. None of that is actual value.
 

TexasJenn

Robin
Woman
I'm not crazy about renting, but my issue with the idea of buying a house is that most houses are crap.
For most mass produced modern houses, I think the real value is in the land, "owning" your own private piece of turf. Of course you'll never truly own it - you'll pay property tax forever.

But assuming you get a decent buy and handle everything correctly, in the long run it's a better deal financially than renting. I sacrificed a great deal to buy my own home and piece of land. I'm saving in hopes to buy 5+ acres eventually. When all the debt is paid off, I'll have a tangible asset I could always sell if I had to. As they say: they're not making any more land.
 

Cervantes

Woodpecker
You should definitely buy a house.

We're starting to get very high inflation. If your savings is in cash they are in the process of stealing it via money printing.

Lumber has tripled in price since the start of the year. Gas is selling for $5 a gallon in much of California. All the food commodities: rice, wheat, soybeans etc. are rising in price, which will result in rising prices at the grocery store. The rising stock market is another inflationary sign.

Taking on debt is a bet against the dollar. You should finance to the max of what you can safely afford, because after a few years the real value of what you owe on the house will be much less than today. You only want to be careful that you don't overextend and end up foreclosed on before you can benefit from inflation. (e.g. plan for scenario where future lockdown means no income for some time). If possible I'd keep cash around to pay three mortgage payments should you lose your income.

You should also get out of the city and be in an outer suburb about 30 minutes away from the nearest urban center (or more if its a major metro). Be in a place where having 2+ acres of land around your house is normal and affordable. The extra land and lower population density will be a good safety buffer in case of instability, and land is useful for a garden to supplement your food if there are supply disruptions.

Houses built pre-1950 are almost always better built than houses after.

Nobody knows what the next few years will bring - but I feel very confident it will not be normal, prosperous times. So you should be planning to have options.
 
Part of the problem is the massive amount of USD being printed. Even though homes are expensive, it's a physical asset and a way to hedge against possible inflation. Up to you if you want to buy a home high priced, but everything seems high right now (stock market, gold, real estate, etc).
 

Kitty Tantrum

Woodpecker
Woman
For most mass produced modern houses, I think the real value is in the land, "owning" your own private piece of turf. Of course you'll never truly own it - you'll pay property tax forever.

But assuming you get a decent buy and handle everything correctly, in the long run it's a better deal financially than renting. I sacrificed a great deal to buy my own home and piece of land. I'm saving in hopes to buy 5+ acres eventually. When all the debt is paid off, I'll have a tangible asset I could always sell if I had to. As they say: they're not making any more land.
This is basically why I would prefer to buy a piece of undeveloped land. We live in a fairly mild climate, and I could see myself living in a suitable tent for a good long while, and developing the land and building a house over time - as I'm able to secure the resources to build to my own quality standards.

Most houses detract from the value of the land in my eyes. :laughter:

There's also the fact that buying a house someone else already built USUALLY means it's going to be close to OTHER houses, with PEOPLE in them. That is not ideal. :)
 
I am a real estate agent on the side of my main job. Originally, I got my license because there was a sale on the course, and I was interested in knowing more about the process of buying a home before I went to go buy one.

So I took the course and ended up working with a brokerage in my new town, so I've gained a bunch of experience behind the scenes of the entire transaction. I've worked with tons of first time buyers.

That being said - It is very hard to time the market. Even though we see a bubble building, there's no telling exactly when it will pop. So I wouldn't hold off on owning property/a house until then if you saw something that fit all of your needs. However if you're still on the fence, saving money for that 20% down payment over the next 6 months to a year would be wise.

The key is finding something you can afford and living below your means. Maybe even look a little further away from the hottest zones.
Also, the only good time to buy is when it is right for your individual situation. Nothing wrong with renting, as long as you can still afford to save along with it.

The market is pretty crazy at the moment, I've seen double digit offers on homes within the first day they hit the market, bidding wars, everything. So giving it a little more time can't hurt, but then again don't wait for the bubble to pop if you see something that fits your budget and needs.

There are also tons of opportunities for first-time buyers, with flexible down payments etc. A good mortgage broker would be able to guide you through this.

Let me know if you have any more questions about the process, I'm happy to help anyone here on the glorious RV FORUM

A real estate agent who sounds reasonable?????? What is this madness????
 

Steiner

Sparrow
A real estate agent who sounds reasonable?????? What is this madness????
It's true. 99.9% are absolute scum. The thing that separates me (besides actually having morals) is I just do this on the side, I don't need the money so I don't lie to people and get them into heavy debt with ~ the nose ~ to line my own pockets.... Like I said I only got into this because the course was like $150 on sale and I wanted the knowledge for when I buy.

I had a client that was about to put in an offer on a GARBAGE home (every red flag in the book) and I straight up told them "Listen. I'll put in this offer for you if you REALLY want, but in my opinion this home is trash". Couldn't do it in good faith without telling them that. They scuttled the offer, and later they found a home that wouldn't even have to finance, in much better shape.
 

Vigilant

Kingfisher
Woman
(I think there's a similar thread in the men's forum somewhere.)

So, short version: my husband and I want to move out of our apartment/area. Too small, too expensive, want to move closer to family, etc. We are probably going to move into another apartment, but most of the advice coming at us is some variety of "what a waste of money, a house is a good investment."

Our issues: most of the houses right now are at WAY above market value. There's a feeding frenzy going on, we can't even look at anything in our price range before it gets sold. We'd also be sinking a big chunk of our savings into it. We don't have any debt, so this would be a big purchase for us.

My general impression is that there's going to eventually be a slowdown and even buyer's remorse for a lot of people, which would be a better time to buy.

(This is of course barring general paranoia about the future.)
No debt! You are blessed! Yup, me too
 

Genevieve

Chicken
Woman
Real estate would do OK in an inflationary environment. If you do buy, stick with a fixed rate mortgage and either have no mortgage, or the largest mortgage possible. The worst thing to do is have a small-medium sized mortgage in place. If you have a maximum mortgage you are the LAST property the bank will try to foreclose on, because of your tiny equity. If you have no mortgage the banks have no claim on you. As an aside, if you live in a “non-recourse” state, if property values drop below your mortgage you canʼt be sued for the difference. The bank takes the loss, not you. Non-recourse states are: Alaska, Arizona, Washington, Utah, Idaho, Minnesota, California, North Carolina, Connecticut, North Dakota, Texas and Oregon. Not financial advice.

Should you own your own house? That's a personal choice/opinion, we've owned a home for 10 years and could never go back to renting; however, from a financial perspective it often makes more sense to rent.
 
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