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Old 09-15-2015, 08:26 PM
 
443 posts, read 341,897 times
Reputation: 272

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All,

Putting my Frisco home up for sale soon. Plan to have a family in near future (baby in 18-24 months) and go to one income. That being said, I am:

Orig Paid $331k Sept 2014
Loan $308k @ 4.125% 30 yr fixed

Mortgage: $1500 P&I + $162 PMI (yuck) + $140 HOI + $750 Prop Tax (stupid MUD tax) = $2,550 payment monthly.

Asking on my home $395k (that's where the market lies and will most likely get it).

New home:
Range: $250k preferred, $275k-$285k is top of the range.

At least 2000 sq ft. Two Story preferred. Pool/Spa. Good school district is preferred even though child will not go to school for 6-7 years from now.

Now I know the price and pool/spa is going to be a damning task, but we are willing to wait and have seen a few of these gems come and go. ($259k with pool/spa in McKinney, so upsetting to not be able to do anything).

Here's the kicker, I work at 75 and Walnut Hill.

What areas should I target specifically? We will be renting most likely until we find the right one. Not terrible because we will net out at $37k (after cap gains tax) and we can build at $2,000+ a month.

Hope to put 20%+ down and drop mortgage to $225k or lower to drop payment to $1700-$1800 out the door.

Thoughts?

Last edited by gocubs418; 09-15-2015 at 08:35 PM..
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Old 09-15-2015, 10:10 PM
 
11,688 posts, read 21,311,402 times
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You really don't want to stay put for just one more year?? You'd save $20k + in capital gains AND get the continued appreciation on your current home (at least another $25-30k, possibly $40k).

I guess I don't understand how your life plan has changed so drastically since last year when you bought your house?? Your plan sounds good for once you're actually pregnant but seems like more of an emotional decision than a logical one at the present time.
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Old 09-15-2015, 10:52 PM
 
Location: Dallas
200 posts, read 534,144 times
Reputation: 58
I would hate to have to pay capital gains too. Another outlook that I used when purchasing my own home was that I did not want to rent-- it would eliminate tax write off (which can be huge annually), and I felt like I'd be throwing rent money away instead of paying down a mortgage and factoring in the possibility of continued inflation in homes.

But ultimately you know what is best for you and your family :-)
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Old 09-16-2015, 08:58 AM
 
443 posts, read 341,897 times
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Quote:
Originally Posted by TurtleCreek80 View Post
You really don't want to stay put for just one more year?? You'd save $20k + in capital gains AND get the continued appreciation on your current home (at least another $25-30k, possibly $40k).

I guess I don't understand how your life plan has changed so drastically since last year when you bought your house?? Your plan sounds good for once you're actually pregnant but seems like more of an emotional decision than a logical one at the present time.
Long Term Capital Gains 15% = $390k-$331k = $59k *15% = $8,850. Unsure where you get the $20k+ figure.

Another 10% rise in property values, you know that for sure? A bird in the hand is worth two in the bush. No one knows where the market will be in 12 months.

Life plan changed so much because of the reality that we want to sneak in two children within the next 4 years. Property Tax is a royal b**** in a MUD area so property tax is $9k ($750 a month). This is a new development area, building is halted until the New Year, build times are 12 month with some builders, this is optimal timing to excite buyers into a "used new home". I'll still profit $20k+.

$2,550 - $1,800 = $750 *12 months = $9,000 savings. So it is a wash on my capital gains.

Pure speculation, I am getting nervous about a housing bubble in DFW. There are too many $400k+ homes and I dont believe there are many people with the income to comfortably afford them. I mean my house increased in value 17% over a year (we bought at a ridiculous price to begin with).

Quote:
Originally Posted by cyrece View Post
I would hate to have to pay capital gains too. Another outlook that I used when purchasing my own home was that I did not want to rent-- it would eliminate tax write off (which can be huge annually), and I felt like I'd be throwing rent money away instead of paying down a mortgage and factoring in the possibility of continued inflation in homes.

But ultimately you know what is best for you and your family :-)
Capital Gains does suck, however, I would still make it out on top.

We should be able to rent at the new mortgage price ($1600-$1800) and if thats the case, we will start cash savings of $2,750+ month (Currently, at $2,000). I've heard tax aspects are overvalued.

Last edited by gocubs418; 09-16-2015 at 09:12 AM..
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Old 09-16-2015, 12:56 PM
 
603 posts, read 679,575 times
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I am pretty sure (but ask someone who truly knows!) you can deduct sales costs ($20k+ realtor commission) plus any improvements you have made, from the profit subject to capital gain tax. That should significantly reduce your tax estimate described in your post above. Good luck.
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Old 09-17-2015, 12:53 PM
 
922 posts, read 568,729 times
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Quote:
Originally Posted by gocubs418 View Post

Pure speculation, I am getting nervous about a housing bubble in DFW. There are too many $400k+ homes and I dont believe there are many people with the income to comfortably afford them. I mean my house increased in value 17% over a year (we bought at a ridiculous price to begin with).
Capital Gains does suck, however, I would still make it out on top.
Areas....

Off the top of my head i'd say Richardson, East/West Plano. They may have some older homes that fit that criteria minus the pool/spa combo. Northern side of Dallas if you are open to applying to magnet/private schools in some areas. I think the schools thing should be a point of compromise since you wont need them for almost a decade and so much can change in that time. It may give you more options of homes. I'm not saying move to a terrible school's area but if you find a great home in an average school's zone, it may be worth it to get that home now since things are difficult on the finding-a-home front and revisit the school issue once you've had a baby or two and you have more defined ideas on what kind of school situation would suit your family/parenting style.

You have a good plan, the challenges will be finding a home in your range that meets your criteria. It can be done, but it will take patience, and a very good realtor. Rental prices have also gone up for the same reason as purchase prices. Do some more research on how much an ideal rental home would cost you in this market. I'm assuming that you have a lot of stuff and will need more space than the average renter. Landlords, like sellers, currently have zero incentive to make any concessions.

Waiting another year may pay off but thats a gamble that you have to decide is worth taking.

You hit a huge, often ignored point on these threads. Not many people can afford a 400K home in DFW. In fact most locals cannot. I hate to be chicken little but if these prices do not start stabilizing soon there will be some pain. Its a reason why, in spite of all the gains in real estate prices ( and no matter what they tell you) builders are slow to rush out and start building as much as one would think they would in a market this hot. Lots of land is available, relatively little new home builds going on across the board.

A healthy real estate market allows for stable inventory in all price ranges. DFW is trending toward low inventory and affordability is shot across the board.The $$ just don't go as far as they should. That affects everyone.

"Stepping up/down" so to speak for those that already have homes is difficult without some significant cash in hand. Homeowners that would be buying something else are staying put. Many others are being priced out of the market, especially young families and adults that are not in a financial position to afford the new price tags.(Median DFW incomes aren't increasing anywhere near the same rate) Builders have to price homes higher to justify the cost of the land. Lenders watch closely...with a skeptical eye.

Poor first time buyers. Couple the real estate situation with the financing one (rates going up at some point, lenders will not be relaxing standards any time soon and certainly will not be funding the gap between what people can afford based on income and what the homes cost) and we have a problem.

Can our city handle being a renter's city? Like NY, San Fran, DC, etc? I say no, not at this time.

People like to freak out about renters and apartments in their neighborhoods...well i say get used to them. Multi-family housing is about to boom around here. People have to live SOMEWHERE and since they cannot buy homes...they will rent. And they will pay mortgage prices for those rentals. A little like the situation in a lot of the states people are running from to come here...except our locals don't have the salaries to compete.

Maybe once Toyota is up and running and people stop speculating the madness will stop. Only time will tell but honestly what most people see as great is actually very concerning to me.

Last edited by BLDSoon; 09-17-2015 at 01:08 PM.. Reason: More info
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Old 09-17-2015, 01:39 PM
 
233 posts, read 222,069 times
Reputation: 130
East Plano.
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Old 09-17-2015, 02:07 PM
 
Location: DFW - Coppell / Las Colinas
30,013 posts, read 34,660,144 times
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Hummm ......... $250 with a pool and good schools?

You realize that's one of the hardest price ranges to buy a house today? You might find something in Little Elm, Rockwall or North Ft Worth - Keller Schools.

It's extremely difficult to buy a home today under $250. Expect to compete with many multiple offer situations for what you want.
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Old 09-17-2015, 06:09 PM
 
162 posts, read 133,307 times
Reputation: 104
Why don't you rent it out, move into a rental (2/2) no family doesn't need to be in a great school district, close to work, and wait a year, the property will increase in value further, your renter will also pays back your mortgage for a year...and sell it then. If prices goes up let say 7% across the board, a $395K home 7% increase vs a $250K home at 7% would make a big different. Build your equity, you don't want to pay PMI. Frisco is very hot and will remain that way for 2016/2017. If you want to sell now, ask a CPA as I think you can get 1 year credit on your capital Gain Tax.
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Old 09-18-2015, 12:57 PM
 
Location: DFW-TX
2 posts, read 1,164 times
Reputation: 10
Default You Can Find A <285K, 2000sqft+ House, w/ A Pool AND Good Schools In Plano

I would suggest possibly looking in Plano? Plano has great schools and you can definitely find something you're looking for in Plano for under 285K. Has an agent told you how much your house is currently worth? (Don't use Zillow - they're awful and so
[mod]not allowed [/mod]

Last edited by SouthernBelleInUtah; 09-18-2015 at 03:51 PM..
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