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Old 05-10-2018, 06:10 PM
 
Location: Omaha, Nebraska
6,347 posts, read 3,526,055 times
Reputation: 15130

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Quote:
Originally Posted by hitpausebutton2 View Post
Nope, i wouldnt. Because after everything was said and done ( paying property tax and other useless admin fees, Interest) it would put the amount over value of the house.
The value of the house is just that: the value of the house. Property taxes, closing costs, etc., are separate and are not included when determining the value of real estate.
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Old 05-10-2018, 06:12 PM
 
Location: Omaha, Nebraska
6,347 posts, read 3,526,055 times
Reputation: 15130
Quote:
Originally Posted by TaxPhd View Post
Yeah, I can see how the seller would accept that, rather than the offer of $180,000 that they already have.
Isn't arguing with financial illiterates fun? I can see why the OP has had no success in purchasing a property.
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Old 05-10-2018, 06:24 PM
 
Location: Omaha, Nebraska
6,347 posts, read 3,526,055 times
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Quote:
Originally Posted by hitpausebutton2 View Post
How does it cause long term drop in demand, when its cheap to get.
You have it backwards: in a deflationary scenario it's the drop in demand that is causing the prices to fall, not the other way around. And when demand falls, you don't need as many people working to produce that good or service, which means some of the people working in that industry are going to lose their jobs - and with that, their buying power.

Quote:
Cheaper the item is, then more people would buy it in fear of rising prices. Say a 5$ candy bar is now $3 bucks, Then i would buy more of it, thus increasing the demand.
Unless you only needed or wanted one candy bar. Price drops don't automatically increase demand, especially with regard to items we don't need in large quantities or frequently (how many pillows and mattresses do you need in your house? if the price of these items dropped by 50%, would you double the number of beds in your house to take advantage of the sale?) or that are perishable (such as fresh foods).

Did you spending go up in 2008, or did you sit tight on your cash in case your job went POOF!? I bet you did the latter, as that was what most people did. 2008 was a (mercifully short-lived) deflationary scenario. The Great Depression was a much longer-lived one. That is what deflation looks like when it happens: yes, everything's on sale, but most people are (quite sensibly) too frightened or too broke to take advantage of that. Only those with significant wealth and large cash reserves do well in those situations, but they do very well indeed, as they CAN and DO take advantage of the "sale prices" throughout the economy.
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Old 05-10-2018, 06:44 PM
 
2,360 posts, read 1,045,734 times
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Quote:
Originally Posted by Aredhel View Post
You have it backwards: in a deflationary scenario it's the drop in demand that is causing the prices to fall, not the other way around. And when demand falls, you don't need as many people working to produce that good or service, which means some of the people working in that industry are going to lose their jobs - and with that, their buying power.



Unless you only needed or wanted one candy bar. Price drops don't automatically increase demand, especially with regard to items we don't need in large quantities or frequently (how many pillows and mattresses do you need in your house? if the price of these items dropped by 50%, would you double the number of beds in your house to take advantage of the sale?) or that are perishable (such as fresh foods).

Did you spending go up in 2008, or did you sit tight on your cash in case your job went POOF!? I bet you did the latter, as that was what most people did. 2008 was a (mercifully short-lived) deflationary scenario. The Great Depression was a much longer-lived one. That is what deflation looks like when it happens: yes, everything's on sale, but most people are (quite sensibly) too frightened or too broke to take advantage of that. Only those with significant wealth and large cash reserves do well in those situations, but they do very well indeed, as they CAN and DO take advantage of the "sale prices" throughout the economy.

Yea those that bank smart or born with it. Or got lucky enough to work in a high pay area, and live in a low COL town sorta what i am doing now.

Ok go with your reasoning, of zero demand prices will fall, but if the demand is picking up, but prices remain flat or fall even lower then we have a boost in spending, correct?
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Old 05-10-2018, 06:49 PM
 
2,360 posts, read 1,045,734 times
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Quote:
Originally Posted by Aredhel View Post
Isn't arguing with financial illiterates fun? I can see why the OP has had no success in purchasing a property.

Wow insulting a poster behind a big screen.. dont you feel good about your self?

Secondly, i am in process of purchasing property, but i am doing the smart, and less expensive way of doing it. Have to pay off one car then i can get a better deal on the back end, and seller pays the closing fees. Less crappy paperwork i need to do, happier I am. Should be a simple task, here is your check, give me the door key. Not here is your check, blood sample, life history for past 10 generations, wait 10 years and key be in the mailbox approach.

We come to the forums to get others insight, rather its a stupid one or a really good topic to openly discuss as adults, instead of insulting them like were in elementary school again.
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Old 05-10-2018, 09:24 PM
 
Location: Omaha, Nebraska
6,347 posts, read 3,526,055 times
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Quote:
Originally Posted by hitpausebutton2 View Post
Ok go with your reasoning, of zero demand prices will fall, but if the demand is picking up, but prices remain flat or fall even lower then we have a boost in spending, correct?
Yes, if demand picks up but prices remain low (usually because of a boost in productivity that allows the product to be profitably sold even at a lower price),spending goes up. Often the spending is directed toward the purchase of different products, though (example: if laptop prices fall, you may not buy two laptops, but instead just buy one and then spend the savings on a new TV).

If you track consumer spending over the decades, you can clearly see this trend. We spend a lot less money as a percentage of our total income on food than we did back in 1950, but we spend more on things such as entertainment and healthcare. Less spent on food means more to spend on other things.
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Old 05-10-2018, 09:34 PM
 
2,360 posts, read 1,045,734 times
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Quote:
Originally Posted by Aredhel View Post
Yes, if demand picks up but prices remain low (usually because of a boost in productivity that allows the product to be profitably sold even at a lower price),spending goes up. Often the spending is directed toward the purchase of different products, though (example: if laptop prices fall, you may not buy two laptops, but instead just buy one and then spend the savings on a new TV).

If you track consumer spending over the decades, you can clearly see this trend. We spend a lot less money as a percentage of our total income on food than we did back in 1950, but we spend more on things such as entertainment and healthcare. Less spent on food means more to spend on other things.
So when has this happen, because all i am seeing is price jumps? Everything is higher now then it was 2-4 years ago, production is still high, so if they are spitting them out faster then they can sell, then why keep prices high?
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Old 05-10-2018, 09:51 PM
 
Location: Omaha, Nebraska
6,347 posts, read 3,526,055 times
Reputation: 15130
Quote:
Originally Posted by hitpausebutton2 View Post
Wow insulting a poster behind a big screen.. dont you feel good about your self?
Yes, my comment was a bit mean and I am sorry it hurt your feelings, but it is also true. In your threads you have shown yourself to be struggling with extremely basic financial concepts, and I strongly suspect this is hurting you in everyday life. You don’t need to get a Ph.D in economics, but you do need a better sense of the basics (as the post UNC4Me was mocking and that I replied to clearly shows).

Quote:
Secondly, i am in process of purchasing property, but i am doing the smart, and less expensive way of doing it. Have to pay off one car then i can get a better deal on the back end, and seller pays the closing fees.
Paying off that car will certainly help in terms of getting a loan. Understand that closing fees are a subject of negotiation; you can ask a seller to pay them, but the seller is free to say no. Remember that closing fees, home inspection fees, appraisal fees, etc. are a one-time cost and don’t fret over them too much.

Quote:
Less crappy paperwork i need to do, happier I am. Should be a simple task, here is your check, give me the door key.
The only home sales that approach that level of simplicity are cash deals, and even those involve home inspections, purchase of title insurance, and the use of real estate attorneys in drawing up the final contract if the buyer has any brains at all. And believe me, you want it that way! Your way would leave you entirely unprotected in the event the property had a clouded title or a significant defect the seller didn’t disclose.

Last edited by Aredhel; 05-10-2018 at 10:09 PM..
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Old 05-10-2018, 10:08 PM
 
Location: Omaha, Nebraska
6,347 posts, read 3,526,055 times
Reputation: 15130
Quote:
Originally Posted by hitpausebutton2 View Post
So when has this happen, because all i am seeing is price jumps? Everything is higher now then it was 2-4 years ago...
No, not everything has gone up. Look what has happened to the price of oil as a result of fracking; there’s no $4/gallon gas as there was only a few years ago. Clothing prices have stayed fairly stable. Electronics have gone down.

All the weather disasters last year have caused food prices to rise. Housing has gone up in large metropolitan areas, but is fairly stable or even declining outside of those areas - and we’re finally seeing more construction of new homes, which ought to help prices in the expensive regions. The prices of new cars have increased in large part because of all the new safety features that have been mandated on them. The one area where prices are skyrocketing is healthcare, in part because an older population is using more of it, in part because of improvements in terms of treatments, and in part because increasing regulatory burdens. Controlling the cost of healthcare is going to be this country’s next big economic challenge.
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Old 05-11-2018, 02:20 AM
 
6,129 posts, read 2,538,095 times
Reputation: 3937
Quote:
Originally Posted by Hoonose View Post
If the price and mortgage rate are sensibly low and you qualify, I would go for it. Home ownership is a great part of US life. It can provide huge benefits to you and your families lives, local economy and community.

There might some better investment that you can make with the money that you 'saved' rather than putting all those eggs in one basket on a cash home purchase.
Job insecurity I would think would be the main reason not to take on a 15-30 year debt. How sure are you that you won’t be laid off within a 30 year period?
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