How do immigrants drive up the price of housing? (property, more expensive, value)
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We see people from CA who are buying in FL and even if they think they are getting a great deal compare to CA prices, they still overpaying by FL standards. Within last few years we saw a price increase and most buyers were out of state. Sure enough many people can afford buying for the same prices as CA folks, but most local people don't want to overpay or live like half of CA does...
We see people from CA who are buying in FL and even if they think they are getting a great deal compare to CA prices, they still overpaying by FL standards. Within last few years we saw a price increase and most buyers were out of state. Sure enough many people can afford buying for the same prices as CA folks, but most local people don't want to overpay or live like half of CA does...
So, how does a person from outside an area know if what they are purchasing is overpriced? Their realtor will say so? Isn't this a minor conflict-of-interest for them. The higher the selling price, the higher the commission they get. What incentive do they have for telling a purchaser that, "Hey, wait a minute. This property is overpriced by about $10,000. You sure you want to pay that much?"
I think the only way I will know if a property is overpriced or not is to see how long it has been listed for sale. If a property is sitting for four-six months, then I assume there is either something undesirable about the property, or it is overpriced for its market. Is this valid thinking, and a good rule-of-thumb?
It's not overpriced if you're willing to pay it. And I think you're right that if you do your homework, you should know the ballpark figure for the area. And, heck, maybe you're willing to pay $10,000 over the usual asking price, just to avoid a bidding war, etc.
I don't think you should worry about how the real estate market is affected by your purchase. Just buy what you want, where you want, for however much you are willing to pay for it. Like I said, if you don't buy it someone else will.
In fact that can be your line if/when any locals say anything to you. "Hey, if I didn't buy it someone else would have. Aren't you glad it was me?" With a big grin.
So, how does a person from outside an area know if what they are purchasing is overpriced? Their realtor will say so? Isn't this a minor conflict-of-interest for them. The higher the selling price, the higher the commission they get. What incentive do they have for telling a purchaser that, "Hey, wait a minute. This property is overpriced by about $10,000. You sure you want to pay that much?"
I think the only way I will know if a property is overpriced or not is to see how long it has been listed for sale. If a property is sitting for four-six months, then I assume there is either something undesirable about the property, or it is overpriced for its market. Is this valid thinking, and a good rule-of-thumb?
This is the thing - these people don't know (or don't care) they are overpaying because they compare prices/payments to whatever they used to have in other state. "I am getting such a great house for only 250K! It would cost me at least 900K in CA! WHat a great deal! $250-$300K for a house (that really worth $200K) - not a big differents!" and nevermind these were sitting on the market for months
Realtors are not saying a word. They want you to buy/sell, so they will get paid. They actually love people from other areas! They can BS about neighbourhoods, prices, and there is nothing you can later do about it I saw it happening a lot in our area.
At this moment is house is not going under contract within few weeks - it's overpriced. It price is good, but it's still on the market - something might be wrong with the house (in our area it's most likely toxic drywalls in houses build in 2006-2008 or sinkhole houses). I see more and more houses coming to the market where they were purchased couple years ago. People are trying to make quick $$. However houses that were purchased few years ago let say for $100K will not be sold now for $170K because it's way overprice.
My rule of thumb is 15% on top of county appraised value (plus-minus couple %) + comps from 2012 - this is when prices were at right level - already above the bottom levels, but before it's current peak.
Thanks for helping me understand. I'll be leaving one state and moving to another, and don't want to be a "bad neighbor".
If you moved to an area where your neighbor's property taxes get reassessed due to recent sales, your neighbors will not be pleased with increased taxes.
I could sell my house in a few hours at $600K. It would take a week to sell at $620K.
Not a chance in hell would anyone in our neighborhood expect to sell a house built in this century at "county + 15%" (which would be $575K, in my case).
Houses have to appraise if you get a loan. If a buyer is paying cash, they can decide not to get an appraisal. They should, especially if they are from out of the area and not familiar with the local market, but they can decide not to.
You don't even need to pay cash for the whole house, you only need to cover the difference plus your regular down payment if the appraisal comes in below the agreed price.
For instance, if it appraises at $180,000 and is sold for $250,000 ,in order to stay below 80% loan to value, you can borrow $144,000. So you could simply bring $106,000 plus closing costs in cash to the closing and mortgage the rest, you don't have to pay cash for the whole thing. Yes, you would still have an appraisal, but a low appraisal does not mean you have to pay cash for the entire house.
I could sell my house in a few hours at $600K. It would take a week to sell at $620K.
Not a chance in hell would anyone in our neighborhood expect to sell a house built in this century at "county + 15%" (which would be $575K, in my case).
I am sorry I wasn't aware we were talking about your house here
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