120K/yr and still can't get a nice house in a decent neighborhood (Sacramento: sales, rentals)

[markas214]

I have three elementary school age kids so that limits my choices of neighborhoods as more than anything I want them in good schools. I'm not looking for a huge house. The 380k is for a conventional mortgage at a good fixed rate. I could qualify for a $700,000 loan? Maybe but the terms would be brutal and take a huge part of my take home pay. I am very aware of what I can afford and entitlement is not an issue. Be careful using that term as it can be used by the many unscrupulous realtors, builders and lenders to justify the over pricing of homes by making people believe that it is them having too high of expectactions vs a really overpriced market. I don't feel entitled to live in Compton where a two bedroom, 800 sq foot house on a 40x20 lot with bars on the windows and doors costs $500,000.

Here is my plan for the near future. First fly out there with my wife to check out the area and schools. Arrange interviews and get a job lined up. Sell my house. Choose an area that appeals to us and rent for one year. At that time we should have a very goood idea of what area we want to live. Buy a house.

I appreciate all the input and the discussion. That is what seperates us from those who jump blindly and suffer the consequences. While we may disagree on some things we all are at least trying to stay informed.

[Caffreys]

Originally Posted by rockx

130k/year for a 700k loan? With what down?

That sounds like you are qualifying for a "bad loan".

Not bad a loan, it's conventional loan with 30 year fix rate and 150k down...

[Caffreys]

Yes homes are over-valued in the Sacto area, so with this in mind you could make low ball offers from 30-70k off the asking price and eventually a motivated seller will jump ship...

[ndfmnlf]

Has anyone tried making a low ball offer? What was the seller's reaction? I would like to make low ball offers but don't want to offend them either.

[rockx]

Originally Posted by ndfmnlf

Has anyone tried making a low ball offer? What was the seller's reaction? I would like to make low ball offers but don't want to offend them either.

You can offer whatever you like, but if you want to be taken seriously then do some research about the area, possibly find another similar property in the same area selling for lower or find some things about the property that need work.

You can also always ask what kind of offers they have been receiving, which might help you determine how negotiable of a state they are in.

[rockx]

Originally Posted by Caffreys

Not bad a loan, it's conventional loan with 30 year fix rate and 150k down...

Hrmm so 550k mortgage on 130k a year, man I am just amazed that people can live with those numbers.

I make that much and I was looking at what is affordable for me, with no CC/Loan debt and a car payment. Personally I couldn't find budget for more than a 3k a month total house payment.

I'll admit, I like to live a lot, with vacations, dining out and be able to shop at Whole Foods not Costco.

I think I'll stay in my 2200 month apartment with no maintenance and be able to eat Sushi once a week and take my kid to Hawaii or something . A house just isn't worth it in Cali.

[markas214]

Originally Posted by rockx

Hrmm so 550k mortgage on 130k a year, man I am just amazed that people can live with those numbers.

.

Actually he said he said on an income of $75,000/year. Ouch!!! Here's the post:

Originally Posted by Caffreys

Not sure why you would only qualify for a 400k mortgage with 130k income???
We are buying a home in Cameron Park for 550k with two young children
who will be in childcare full time on a 75k combined income. We quaflied for
600k with good credit. If i was making 130k i would definitely be looking in the 700s price range and still live the American dream. Just my two cents...

[markas214]

Caffreys,

Ever consider investing the 150k and renting instead. Even a modest 5% return plus a savings of renting vs buying would give you an extra 20k of disposable income. Put 5k into an IRA and with a family of 4 your tax bracket is still only 15% so you make out better. Then when things settle down jump in and buy. In 5 years you could pay cash with the saved money and have no mortgage at all if prices tank as bad as they did in the 90s.

[ndfmnlf]

I've set my maximum house price limit at no more than 2 times my annual income. I will be earning $165k, so I'm looking at $330k as my ceiling. Right now at craigslist, some houses in Elk Grove are starting to fall within my price range, but I may wait 6-12 more months before pulling the trigger. If housing prices crash further to the mid $200s, I may yet pay in cash.

[pandabear]

I cant believe people still cant afford homes in Sacramento. Sacramento is the foreclosure capital of the united states right now. Scope the neighborhoods, make low ball offers, look for foreclosed properties. The stockton record did a report on how many of these families (many spanish speaking only) bought into this whole half million dollar house on a 900$ a month payment plan with a 60,000 k combined income that are bighting the bullet and loosing their homes. The american dream still lives in Sacramento, cash in on someone elses nightmare and bid low.

As far as this real estate jargin, dont take their market talk seriously. Let them do their job and sell the home, dont let them tell you about the MARKET. These people do not have degrees in business or economics, and most never set foot in a university... all they did was pass a relators test, these are not individuals with education and exposure to the Market. These same people tried to sell you a house 2 years ago for 550k, telling you the whole time to get it while you still can, all the while the house has depreciated down to under 400 k. Think they loose sleep everytime someone cant foot a morgage payment. Think again, realators are some of the most unecessarily gaudy people on the planet. Im a firm believer in Karma and they are suffering now that the housing market has gone caput, and they cant cash in.