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Old 11-11-2009, 07:43 PM
 
30 posts, read 385,122 times
Reputation: 50

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I'm in my early 50s, have always been a renter, but now considering purchasing my own home, want to take advantage of the first-time homebuyer tax credit within the next 6 months. Don't need anything large (I'm single, on my own, no spouse, SO, kids or pets), don't want to deal with home maintenance issues or a yard/lawn, so probably will buy a condo/townhome, probably 2bd/2ba, which is very workable in this area for $175,000 or under.

Some Questions:

-- I hate to drive, have never owned a car-- Can I own ny own home, own property without owning a car? of course, I'm looking for a walkable, bikeable neighborhood with public transportation just like I did when choosing a rental, even though that's tough here in the South! (I moved to a city in NC during the past year after living all my life in the Northeast.)

-- I have a terrible credit rating after making lots of financial mistakes the past few years. Even though I'm improving my finances, probably won't be able to improve that credit rating for years. But due to a recent cash inheritance I received the past year, I can pay ALL cash or mostly cash for my home purchase ($175,000 or under.) Should I try for financing/a mortgage for even just a part of the purchase price? Or simply pay all cash up front so I don't have to deal with qualifying for financing now & then refinance later if needed?

-- Would my ability to pay all cash (no financing/no mortgage needed) give me any major advantages during the buying process? (as far as getting a lower purchase price? or giving me an advantage if in competition with other buyers? Is it possible that a seller would be more willing to lower their price since it would be an uncomplicated, easy sale with no "conditions?" Or is the fact of an all-cash purchase irrelevant to the seller?

--Why would I need to use a real estate agent, a buyer's agent to purchase my first home? I already know what I'm looking for and the areas/locations in this city where I'd like to buy. Can't I just research this online, view the properties myself & purchase without using an agent? Is it possible to see the "comps" myself online? (see the prices for recently sold properties myself without using an agent?) If that's possible, what are the reasons/motivations to use a Real Estate agent for my purchase?

Hope these questions don't sound too ignorant. Would appreciate any helpful replies! (and would appreciate being directed to any reading I should do online or otherwise to educate myself further about these issues!)
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Old 11-11-2009, 07:51 PM
 
315 posts, read 774,197 times
Reputation: 292
Quote:
Originally Posted by cttw View Post
I'm in my early 50s, have always been a renter, but now considering purchasing my own home, want to take advantage of the first-time homebuyer tax credit within the next 6 months. Don't need anything large (I'm single, on my own, no spouse, SO, kids or pets), don't want to deal with home maintenance issues or a yard/lawn, so probably will buy a condo/townhome, probably 2bd/2ba, which is very workable in this area for $175,000 or under.

Some Questions:

-- I hate to drive, have never owned a car-- Can I own ny own home, own property without owning a car? of course, I'm looking for a walkable, bikeable neighborhood with public transportation just like I did when choosing a rental, even though that's tough here in the South! (I moved to a city in NC during the past year after living all my life in the Northeast.)

-- I have a terrible credit rating after making lots of financial mistakes the past few years. Even though I'm improving my finances, probably won't be able to improve that credit rating for years. But due to a recent cash inheritance I received the past year, I can pay ALL cash or mostly cash for my home purchase ($175,000 or under.) Should I try for financing/a mortgage for even just a part of the purchase price? Or simply pay all cash up front so I don't have to deal with qualifying for financing now & then refinance later if needed?

-- Would my ability to pay all cash (no financing/no mortgage needed) give me any major advantages during the buying process? (as far as getting a lower purchase price? or giving me an advantage if in competition with other buyers? Is it possible that a seller would be more willing to lower their price since it would be an uncomplicated, easy sale with no "conditions?" Or is the fact of an all-cash purchase irrelevant to the seller? Cash is still king. Cash can yield you a better deal in some cases. Especially in this market.

--Why would I need to use a real estate agent, a buyer's agent to purchase my first home? I already know what I'm looking for and the areas/locations in this city where I'd like to buy. Can't I just research this online, view the properties myself & purchase without using an agent? Is it possible to see the "comps" myself online? (see the prices for recently sold properties myself without using an agent?) If that's possible, what are the reasons/motivations to use a Real Estate agent for my purchase? You do not have to have an agent, but since it is you first time, you would be well advised to find a good agent to work with. Make sure they are experienced, ethical, patient, and have good reccommendations.

Hope these questions don't sound too ignorant. Would appreciate any helpful replies! (and would appreciate being directed to any reading I should do online or otherwise to educate myself further about these issues!)
Where in NY are you going to find a home for $175,000 that allows you to walk to work?
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Old 11-11-2009, 07:54 PM
 
30 posts, read 385,122 times
Reputation: 50
I'm NOT buying a home in NY.

I now live in North Carolina (NC) & planning to purchase a CONDO in a city here -- there are many good, decent 2bd/2ba condos available here for $175,000 or under, I can easily pay as little as $115,000 for one. And they're available in neighborhoods with access to public transportation -- I like to be able to walk/bike places but NEVER said I would need to walk to work.


Hope that clarifies things.

Last edited by cttw; 11-11-2009 at 07:59 PM.. Reason: for clarification purposes
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Old 11-11-2009, 11:07 PM
 
Location: Tempe, Arizona
4,511 posts, read 13,541,535 times
Reputation: 2201
Quote:
Originally Posted by cttw View Post
I'm in my early 50s, have always been a renter, but now considering purchasing my own home, want to take advantage of the first-time homebuyer tax credit within the next 6 months. Don't need anything large (I'm single, on my own, no spouse, SO, kids or pets), don't want to deal with home maintenance issues or a yard/lawn, so probably will buy a condo/townhome, probably 2bd/2ba, which is very workable in this area for $175,000 or under.

Some Questions:

-- I hate to drive, have never owned a car-- Can I own ny own home, own property without owning a car? ...
There is no requirement to own any form of transportation to own a home.

-- I have a terrible credit rating after making lots of financial mistakes the past few years. Even though I'm improving my finances, probably won't be able to improve that credit rating for years. But due to a recent cash inheritance I received the past year, I can pay ALL cash or mostly cash for my home purchase ($175,000 or under.) Should I try for financing/a mortgage for even just a part of the purchase price? Or simply pay all cash up front so I don't have to deal with qualifying for financing now & then refinance later if needed?
You should discuss with a loan officer in your area. They can review your situation to see if you may qualify for a loan. Of course, with all cash, not a problem. Whether you do all cash or some mix of cash and loan depends on your financial situation and investment goals. You should review with a financial planner.

-- Would my ability to pay all cash (no financing/no mortgage needed) give me any major advantages during the buying process? (as far as getting a lower purchase price? or giving me an advantage if in competition with other buyers? Is it possible that a seller would be more willing to lower their price since it would be an uncomplicated, easy sale with no "conditions?" Or is the fact of an all-cash purchase irrelevant to the seller?
Yes, you will generally have some advantages if you combine cash with other terms attractive to the seller such as a faster close. Seller may be willing to give better pricing for overall better terms than a buyer with financing can provide. All things equal though, a buyer with financing is still paying cash in the end.

--Why would I need to use a real estate agent, a buyer's agent to purchase my first home? I already know what I'm looking for and the areas/locations in this city where I'd like to buy. Can't I just research this online, view the properties myself & purchase without using an agent? Is it possible to see the "comps" myself online? (see the prices for recently sold properties myself without using an agent?) If that's possible, what are the reasons/motivations to use a Real Estate agent for my purchase?
Yes, you can do a lot of research on your own, and you should. However, the seller's listing agent has a duty to the seller and not you - obviously a situation not in your favor. A buyer's agent has a duty to the buyer (you) and should watch out for your best interests during negotiations and contract preparation. Your agent will also handle all the issues that may arise during the escrow process. A buyer's agent will also have better and more accurate data from the MLS for comps than you may find from other sources.

Hope these questions don't sound too ignorant. Would appreciate any helpful replies! (and would appreciate being directed to any reading I should do online or otherwise to educate myself further about these issues!)
See replies in red above.
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Old 11-12-2009, 09:04 AM
 
Location: Barrington
63,919 posts, read 46,514,480 times
Reputation: 20674
Have you considered a small single family home, on a small lot? You could pay someone to maintain it for you instead of paying a monthly assessment to an association.

I think it makes some sense to pay cash at your age given you have the cash and have had previous credit problems.
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Old 11-12-2009, 09:22 AM
 
484 posts, read 1,213,662 times
Reputation: 441
Congrats on being able to pay cash and looking for your first home. I just bought my first about 4 months ago and love being a homeowner.

If you have credit problems, I'd suggest just looking for places that you can pay all cash for. You won't have to worry about mortgages. FHA, the type that you'd likely qualify for, requires an inspection and actually won't approve the loan is certain conditions exist. For example, we had to scrap and repaint a few places on the side of the house because there was chipping. The seller ended up doing it for us simply because he wanted to get rid of the house but still.

If you have all cash, you'll be in a great position to negotiate. When you find a house that you like, get a good home inspection and play hard ball with the seller over the results.

Yes, you will need an agent but you can do a lot of research on your own. Most areas have public access to the MLS. What I did was look at everything out there and picked a couple of places I liked. I then met with different RE agents, told them what my needs and wants were, and asked them to show me some examples. I then compared the results they should me to the ones I found myself to judge how competent and accurate they were. I went with the one who most closely found houses that I already liked.

As someone who is single as well, I'd suggest that you look for a relatively small piece of land. I have a tiny yard but even that takes some work when you are doing it yourself.
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Old 11-12-2009, 09:33 AM
 
28,455 posts, read 85,055,031 times
Reputation: 18725
m.a.m. is being a little more polite than I am going to be -- the financial risks of owning a condo have never been worse than they are right now. Rents are falling, maintenance costs to Home Owners Associations are rising, the number of condo complexes that have too many foreclosures and too many vacant unit cannot get financing and prices are falling.

If you do the smart things that rjrcm suggests above and you still feel OK about buying something I would really really lean toward a small single family home. If you can find a small townhouse complex that would also make more sense than a condo if you can get the details on maintenance reserves and similar stuff that could be a disaster.

When you do the straight line math on an all cash purchase vs RENT I think there are some real eye opening things to consider. That big pile of cash may very well pay your rent for 20 years if you find a value priced place and get any kind of decent return on your money...
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Old 11-14-2009, 10:18 PM
 
44 posts, read 178,185 times
Reputation: 19
Quote:
Originally Posted by cttw View Post
I'm in my early 50s, have always been a renter, but now considering purchasing my own home, want to take advantage of the first-time homebuyer tax credit within the next 6 months. Don't need anything large (I'm single, on my own, no spouse, SO, kids or pets), don't want to deal with home maintenance issues or a yard/lawn, so probably will buy a condo/townhome, probably 2bd/2ba, which is very workable in this area for $175,000 or under.

Some Questions:

-- I hate to drive, have never owned a car-- Can I own ny own home, own property without owning a car? of course, I'm looking for a walkable, bikeable neighborhood with public transportation just like I did when choosing a rental, even though that's tough here in the South! (I moved to a city in NC during the past year after living all my life in the Northeast.)

-- I have a terrible credit rating after making lots of financial mistakes the past few years. Even though I'm improving my finances, probably won't be able to improve that credit rating for years. But due to a recent cash inheritance I received the past year, I can pay ALL cash or mostly cash for my home purchase ($175,000 or under.) Should I try for financing/a mortgage for even just a part of the purchase price? Or simply pay all cash up front so I don't have to deal with qualifying for financing now & then refinance later if needed?

-- Would my ability to pay all cash (no financing/no mortgage needed) give me any major advantages during the buying process? (as far as getting a lower purchase price? or giving me an advantage if in competition with other buyers? Is it possible that a seller would be more willing to lower their price since it would be an uncomplicated, easy sale with no "conditions?" Or is the fact of an all-cash purchase irrelevant to the seller?

--Why would I need to use a real estate agent, a buyer's agent to purchase my first home? I already know what I'm looking for and the areas/locations in this city where I'd like to buy. Can't I just research this online, view the properties myself & purchase without using an agent? Is it possible to see the "comps" myself online? (see the prices for recently sold properties myself without using an agent?) If that's possible, what are the reasons/motivations to use a Real Estate agent for my purchase?

Hope these questions don't sound too ignorant. Would appreciate any helpful replies! (and would appreciate being directed to any reading I should do online or otherwise to educate myself further about these issues!)
If your credit is very poor,you would certainly be better off with all cash. If a seller is in a hurry, all cash is a distinct advantage. Most homes are negotiable in todays market. Cash will help some, but only to a point.

The main motivation for using a knowledgeabel,full time,buyer's agent , which in most cases doesn't cost you a dime, is to save time, money, and frustration. Most of todays listings offer a buyer broker commission that is paid by the seller. So why wouldn't you want an agent to help you for FREE??

You can certainly see comps yourself on www.mlsli.com but an experienced agent can help you interpret the numbers that you see. He/she may have first hand knowledge of the home (either negative or positive,that could have affected the final sales price.eg short sale, seller concession, condition of home, knowledge of block/area)

He/she can help negotiate price, terms, inspection process, and followup with attorneys and all parties. He/she serves as an ally, which if you deal with the listing agent directly,you may not get the best deal. The listing agent by law, is always loyal to the seller and acts on their behalf.
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Old 11-14-2009, 10:35 PM
 
Location: Tempe, Arizona
4,511 posts, read 13,541,535 times
Reputation: 2201
Barbk, MLSLI.com won't help as OP is buying in North Carolina.
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Old 11-15-2009, 09:46 AM
 
Location: SC
9,101 posts, read 16,407,377 times
Reputation: 3619
Chet is right. If you have 200k invested at 10% return compounded, that would generate 20k return the first year, 22k the next year, 24,200 the next year at which point if you left the money alone you'd have now $266,200 after just three years and $518,748 in 10 years.

The only advantage to buying is for lifestyle reasons. If you take all that money to buy a place -- especially if it is a condo, the money is gone and your expenses can only go up. You'll have taxes, condo fees, repairs and no guarantee of any appreciation of the property. Right now where I am living owners of their condos are having to pay $500 to $700 per month just for condo/regime fees alone. You still have to pay taxes and for interior repairs and units are selling for half of what they were a few years ago.
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