New Vs Old Homes (Austin, Van: wood floors, for sale, renting)
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I agree with Rask, you should renovate as much as possible before you move in. It will give it the new home feel and relieve many of your hubby's anxieties.
If you have a 401 K, that is a great place to get the renovation money with low interest. With what the market is doing, you will probably be paying yourself back more than what you will make with it sitting in your account. I know you usually pay yourself back around 5% interest.
If you have a 401 K, that is a great place to get the renovation money with low interest. With what the market is doing, you will probably be paying yourself back more than what you will make with it sitting in your account. I know you usually pay yourself back around 5% interest.
I don't. Is this her advice? My parents have always done it this way. So I learned it from them.
Suze says NEVER dip into your 401K...In fact here's a quote from an interview.
"Also, never ever borrow against your 401k plan because you will pay double taxation on the money you borrow. Because you don't pay taxes on the money you put into a 401k, when you pay back the loan (which you must do within five years, or 15 years if used to buy a home), you pay it back with money you have paid taxes on. Then, when you retire and take the money out again, you end up paying taxes on it a second time. And that isn't even considering the penalties you have to pay if you change jobs/quit/lose your job, in which case the money is due immediately and subject to taxes and a 10% penalty."
My parents are 54 and comfortably retired. I can see what she is saying about the double taxes, however if I am paying this money to a bank it is also with taxed money at a higher rate.
I am so not a financial planner, but this is how we always do it and what I will continue to do.
I've always lived in/bought older homes. Usually the property is larger and the materials and quality of construction are better.
But in Texas.....older homes often come with bugs. Just a fact of life. Bugs love Texas and once they become established under the foundation or in the walls, they are dammed impossible to get rid of.
Not suggesting your house is like this, but we bought an older home in Texas that had been a rental, we rented it for a while before buying. Rentals do get run down over time. We had noticed roaches and tried to deal with them but it became obvious that more drastic measures were in order.
When we remodeled the kitchen I had a pest control company standing by for the wall tear out. I can't describe the nest of bugs that were uncovered , worse far worse than we had ever suspected.
I may stuill be wheezing today because of it, but a ton of insecticide was unloaded on that mess. We burned all the old cupboards, had to remove and replace all the appliances.
So I guess I'm saying a *pest inspection* would be a good bet before you buy the place. Please do.
So my question is, Would we be better off buying a new home - or renovating a home that I really love, aside from the 'original' interior.
Well, a couple of things here.
First, the words you've used are important. You've used the words "a home I really love..." and "a beautiful home..." and "I fell in love with..." and "keep thinking about the charm of this older 1980's house..." about the older home. I listen (or look in this case) at the words people use because they matter. You've looked at "a lot of homes" and this one is calling to you. That means something.
Second, when married couples disagree on which home to buy, I always say to the husband "I've never regretted, ever, letting my wife have her way when it comes to picking homes and things associated with the home".
I would say the same thing to your husband. It makes for a long, happy marriage. Without getting too far off track here, a home means more to a wife than a husband, in my opinion. Attribute it to the nesting instict or whatever, but that has been my observation. If your husband is smart, you'll get your way and he will not regret making you happy.
That said, falling in love with a home and mentally dismissing factual realities (of which husbands are apt at pointing out) is a mistake. Pursue a home you love, but be willing to walk away if the numbers don't make sense.
Your Realtor should run a CMA for Steiner, comparing the home in value only to other homes built before 1995, of similar size that are in original condition. If this one is priced right, and you can budget in the updates you want, make the offer.
If it's over priced (like a LOT of homes on the market at present), offer the right price and be 100% ready and willing to walk away if the seller is stubborn.
If your offer is accepted, you'll have the 7 or 10 day Option Period to have the home inspected and also to get some bids for updating. The quickest way to do that is to take a sketch of the kitchen and bath layouts to Home Depot and get a bid. That will give you a rough number to start with and you can shop for multiple bids later, if you buy the home.
The kitchen, laundry room, bathrooms and carpets need to be updated badly. And the price of the home reflects this, because its half the price of a lot of the other homes we looked at. I was wondering if any of you out there had any advice on buying a fixer-up home.
To start with the financials. When making your offer, be sure to take into account the cost of the capital you are using for the remodel. If possible get an interim loan that can be refinanced into a standard mortgage (and that the house will appraise) at the end of construction.
When crafting your offer, take into account the hidden costs. You will most likely being making two payments during construction (or one payment and renting). If you try to live onsite during construction, take that into consideration also. Living three months in a construction site has its costs.
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My husband is very aprehensive about buying it due to the amount of work we would need to do to it, (he thinks it will cost a fortune for the renovations and we'll get more value for money if we buy a newer home) but on the other hand, I am quite optimistic, because we would be able to renovate with our own tastes, and make it a bit unique, compared to most of the other homes in Steiner, which many all seem to be built pretty much the same. Not only that, we get the benefit of a lower tax rate on a cheaper home.
Being apprehensive is good but doesn't mean that the project is not worth the effort. You will pay the largest markup on new home amenities but it also comes with the least amount of effort. You also don't have to carry a full note on a house that is being built. You will save money on the cost of your remodel but this will be offset by the amount of work and inconvenience of the project.
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So my question is, Would we be better off buying a new home - or renovating a home that I really love, aside from the 'original' interior. If anyone has any experiences with renovating older homes, and can give any advice, I'd really appreciate it. My husband wants to make an offer on a newer home for twice the price, which needs nothing at all done to it, but I can't help to keep thinking about the charm of this older 1980's house, which really did have a breathtaking garden and street appeal....
The remodel you describe is not that major. You could easily get estimates for the project within an option period and figure out your total cost. You could also work with a mortgage broker on loan options to roll the after project totals into a standard mortgage.
Thanks for everyones advice. I appreciate all your input. The problem is, we're not comparing apples with apples. The only reason why we even took a look at this house is that I was browsing on Realtor.com and the street appeal of this colonial was the wow factor. It was a large enough home (huge actually), (5 bedrooms, 3 living, 2 dining, 3.5 bath) so we added it to our list. Problem is its literally half or a third of the price of some of the other homes that my husband wants to buy. Isn't it normally the wife who wants the expensive home and the husband the fixer upper ? I just don't get it !!! My husband just doesn't share the vision that I do for this house, so this is why he's being wowed by the new construction and overlooking the appeal of this house. If we looked at houses all in this price range and age of construction, it would definately stand out as the best buy. The sellers know it needs remodelling, and last night their realtor emailed us to say they had dropped the price an additional $10K. Our original offer was refused. I think we low-balled them too much, but I was trying to factor in possibly spending $30K on a kitchen remodel alone. I'm out of the state, and my husband is there a few days a week on business until we move. . . so he's frantically doing house hunting and yesterday even phoned to say he wanted to make an offer on a house I had not even seen. I guess for me, there is a big difference between a 'house' and a 'home'. Some homes you walk into just feel inviting and warm, others feel cold and sterile. I just don't think I could be happy in a house with the same architecture and floor plan as everyone else in the street...So, thanks for all your words of wisdom everyone...I told my husband that the older house is what I really want...I guess he just needs to come around to the idea. Thanks for the tips about bugs in Texas. I had no idea about that. I'm hoping this house doesn' thave that problem. But I'll take your advice and get a bug inspection as part of the home inspection. In my opinion, the house isn't THAT old. Its 1980s....it just looks older because of the architecture on the outside. And on the inside, it is very clean, and if we wanted to, we could live with it the way it is now for a while. Its just very 1980s !! Someone in an earlier post told me that if the 'bones' were good, its worth while, and they asked what really needed to be replaced. Well, the kitchen completely, because it is original, and so are the appliances. The downstairs half bath has been remodelled, and they did a pretty good job of it with a pedestal basin thats kind of traditionally styled. They just used the wrong type of tile for this home - a country or french look would have suited the architecture much better. Upstairs bathrooms just need re-tiling in a tile that suits the house (not the metalic 1980s look) and the toilet and bathtubs are fine. Once the carpet is removed from in there and tiled it will look like new. I found a website called Home Decorations - Bookshelves - Benches | HomeDecorators.com that sells pre-made vanities with granite countertops and they range from $300 - $900 and we could install that ourselves...so I am pretty confident that the bathroom renos we could do ourselves entirely. Its just the kitchen that we would get an expert to do. Thanks for the tips on the 401K but I think I'll just leave that were it is for now. We havn't been in this country long enough to accumulate anything impressive anyways :P But its handy to know for the future if we ever got into a pinch - but I think I'd only touch retirement savings if it were either more cost effective than a conventional loan or I was in a real financial pickle!! I didn't even know you could do that actually, so I've learnt something new!!!
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, worse far worse than we had ever suspected. 
