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Old 07-15-2012, 01:08 PM
 
Location: WA State
7 posts, read 22,438 times
Reputation: 12

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Quote:
Originally Posted by accufitgolf View Post
In my last sale, the lowest offer won as it was the least "sticky" one. No house to sell contingency, pre-approved for the mortgage, not asking for closing help, etc.

Submit what you consider a fair offer. One that you would be happy getting the house for and be happy if you get it.

Personally, I would not purchase a one bathroom house.
Thanks, and very helpful that your advice jives with the others. Yes, the one bathroom is definitely on the "con" side of the list! However, there is room both beside and above the current bathroom, so I imagine it wouldn't be too terrible to plumb for another when we've saved up some money. Plus, we still have our 3-year-old son's toilet training potty for emergencies (kidding...at least so far)

Quote:
Originally Posted by MrRational View Post
Not unreasonable advice at all... bit still, the Seattle market ain't South Carolina.
Yes, things are getting a little bonkers in certain more-desirable parts of the city we're in. Our lender said some of her clients "stalk" certain neighborhoods daily, ha!

Quote:
Originally Posted by hueyeats View Post
If a house is re-sale friendly...
In order to sell... one must buy it at a good price... NOT "overpriced".

Most home today will only "move" when priced right & not seem overpriced by buyers as "who" do not want a deal or that sale???

But just saying.

Best is to buy that re-sale friendly house at an awesome price that is wayyyyy under that budget so you don't overstretch that what you can afford so you will not be in that position to "have to" sell when something bad happens.

Also remember that even in today's housing market... even new home buyers can still be in that "underwater" situation the minute they buy... so be a "wise" buyer. Don't put yourself in that position.... but do put yourself (protect yourself) in that "abovewater" position... meaning to "buy low" in that ideal home. And more importantly, to rake that profit when it is time to sell.
Sorry, didn't quite understand the second sentence - could you rephrase?

Yep, this is def at the top of our budget range . Seemingly well-matched "comps" in the neighborhood put the house just a bit higher than the mid-range, but I don't know if people might lose interest in the neighborhood that's been around since early 1900's. Yes, we absolutely do not want to start out underwater because of some ridiculous bidding war! :-)

We do live quite simply though, and even with the mortgage on this house would still have $2k-$1,500 a month after all bills/groceries/insurance/charity/etc. We're also keeping 4 months worth of expenses in our savings and not touching it for a down payment. Is this how most first-time homebuyers budget? Any red flags go up given the above?
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Old 07-15-2012, 01:16 PM
 
Location: The Triad (NC)
26,853 posts, read 57,874,473 times
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Quote:
Originally Posted by homesweethome4 View Post
Yep, this is def at the top of our budget range... Is this how most first-time homebuyers budget?
Any red flags go up given the above?
PITI + ALL Utility bills + upkeep allowance = no more than 1/3 of net income.
One and half weeks pay can cover the mortgage and the rest.

The money deducted for 401K's and other investment comes after this.
Now how much is left for groceries and cars and medical and kids and and travel and all the rest?
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Old 07-15-2012, 01:41 PM
 
Location: WA State
7 posts, read 22,438 times
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Quote:
Originally Posted by MrRational View Post
PITI + ALL Utility bills + upkeep allowance = no more than 1/3 of net income.
One and half weeks pay can cover the mortgage and the rest.

The money deducted for 401K's and other investment comes after this.
Now how much is left for groceries and cars and medical and kids and and travel and all the rest?
My firsts inclination is to pretend like I get it so I don't sound ignorant...but... I don't get it Does PITI=mortgage payment?

Having trouble breaking down our budget in the way you asked above. Could I ask your advice on how I separated it the below way?

BUDGET BREAKDOWN
-Added ALL monthly payments/expenses of any sort including what our new mortgage would be (divided bi-yearly car insurance by 6, yearly expenses by 12, etc.)
-Add in any other anticipated expenses (estimated 3 doctor co-pays a month, b-day gifts, "incidental" $ for husband, son, and I, etc.)
-Most insurance (life/accident/health) & retirement is directly taken out of our paychecks and since we use our take-home pay to calculate, already accounted for.

END RESULT It added up to 2/3 of our total take-home income. So unless anything happens (like illness or job-loss, for which we'd have 4 mos. of expenses saved), we'd have 1/3 of our total take-home income left over to put into savings.
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Old 07-15-2012, 02:30 PM
 
Location: The Triad (NC)
26,853 posts, read 57,874,473 times
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Quote:
Originally Posted by homesweethome4 View Post
My firsts inclination is to pretend like I get it... Does PITI=mortgage payment?
Yes. Go to any of the calculator pages and get the 30 year loan payment per $1000 at X% interest =P&I
Look online in most areas and you can find the property taxes (WA is high) =T
Similarly you can check with State Farm or Nationwide for a policy amount. =I
If you won't be making a 20% down payment then include an allowance for PMI

PITI + PMI will be your "mortgage payment"

Then tally up the utility bills: gas, electric, water, sewer, trash, CATV, internet, phone, etc
and an allowance for all the inevitable stuff that WILL require work or repair or replacement...
which is easily another $1000-1500 per year.

Collectively... this total really shouldn't exceed one third of your net (of taxes) income.
Weekly salary less FICA and less Federal income tax (WA has no state income tax) = net salary

(The retirement planning discussions are next semester)
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Old 07-15-2012, 02:40 PM
 
Location: Barrington
41,859 posts, read 31,725,984 times
Reputation: 14078
Quote:
Originally Posted by homesweethome4 View Post

Forgot to mention - we got a copy of the inspection report from when the current owners bought 2 years ago. Looks pretty good, except that the inspector couldn't get to 30% of the crawl space because there wasn't enough clearance. Would this be something to bring up as a contingency, before the offer, not at all?
Please do not rely upon this dated inspection report. Get your own inspection and make your offer contingent upon it. Anythig could have happened in 2 year's time.
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Old 07-15-2012, 02:47 PM
 
Location: WA State
7 posts, read 22,438 times
Reputation: 12
Quote:
Originally Posted by MrRational View Post
Yes. Go to any of the calculator pages and get the 30 year loan payment per $1000 at X% interest =P&I
Look online in most areas and you can find the property taxes (WA is high) =T
Similarly you can check with State Farm or Nationwide for a policy amount. =I
If you won't be making a 20% down payment then include an allowance for PMI

PITI + PMI will be your "mortgage payment"

Then tally up the utility bills: gas, electric, water, sewer, trash, CATV, internet, phone, etc
and an allowance for all the inevitable stuff that WILL require work or repair or replacement...
which is easily another $1000-1500 per year.

Collectively... this total really shouldn't exceed one third of your net (of taxes) income.
Weekly salary less FICA and less Federal income tax (WA has no state income tax) = net salary

(The retirement planning discussions are next semester)
Super helpful, got it! So...looks like we're using 2/3 of our income when really we should be using only 1/3 and saving 2/3 each month?

Ha! Must say, your explanations are much clearer than many of my liberal arts profs hour-long musings :-)
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Old 07-15-2012, 02:48 PM
 
Location: WA State
7 posts, read 22,438 times
Reputation: 12
Quote:
Originally Posted by middle-aged mom View Post
Please do not rely upon this dated inspection report. Get your own inspection and make your offer contingent upon it. Anythig could have happened in 2 year's time.
Oh no, definitely planning on getting our own Just not sure how much excavation would cost and who would pay for it/how to broach the subject.
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Old 07-15-2012, 02:54 PM
 
Location: The Triad (NC)
26,853 posts, read 57,874,473 times
Reputation: 29266
Quote:
Originally Posted by homesweethome4 View Post
So...looks like we're using 2/3 of our income when really we should be using only 1/3 (of net)...
and saving 2/3 each month (or groceries and cars and medical and kids and and travel and all the rest)?
That would be my recommendation.

Quote:
your explanations are much clearer than many of my liberal arts profs hour-long musings
Happy to help.
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Old 07-15-2012, 03:00 PM
 
14,366 posts, read 16,288,712 times
Reputation: 12872
What would the market value of this home be...if you had no clue what they paid for it 3 years ago?

Seems you might be putting too much value on the price they paid because it seems they are getting $30k in profit. However, what if they got it for a steal at that time because it had ugly paint colors and the market was bad and they were good negotiators. Not that it really matters. What if they paid $400k 3 years ago?

Keep in mind they are paying a realtor fee which will wipe out most of their profit.

Try to focus on the actual market value of that home today, based on comps of homes sold in past months or so.
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Old 11-12-2013, 09:09 AM
 
Location: O'Hara Twp.
4,187 posts, read 5,795,600 times
Reputation: 1512
Quote:
Originally Posted by homesweethome4 View Post
Thanks for the advice! (Qualifications on what you said were intuited ).This is what our realtor suggested as well. We just are trying to figure out exactly what we feel comfortable with and would ensure that if we had to go to sell it in 5+ years, we would not lose money if we overpaid for the neighborhood. The $30,000 increase in price over the past 2 years makes me a bit worried.

For limiting the contract contingencies, she said it would be wise to keep only the following:
-Subject to appraisal (I think our lender would require this anyway, right?)
-Subject to pest inspection
-Subject to financing at xx-xx% rate (in the unlikely event rates go up)

...anything else you think we should make sure to keep as a contingency without them fearing we'll nickle and dime them?

Forgot to mention - we got a copy of the inspection report from when the current owners bought 2 years ago. Looks pretty good, except that the inspector couldn't get to 30% of the crawl space because there wasn't enough clearance. Would this be something to bring up as a contingency, before the offer, not at all?
You are not getting anywhere arguing about the crawl space. The inspector only said that to let you know that he didn't inspect it. He is not saying that you need to dig it out. The seller will likely tell you to beat it if you bring it up. No way they dig up the crawl space when they have another offer.

Ignore the purchase price. I am sure the house appreciated some over the last few years. Guessing about 3% a year? It seems as if the market is very hot right now.
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