help: bought a house, under construction, thinking to drop (Phoenix: real estate, renting)

[arun196]

Hi all,

I bought a house in baseline rd, 35th ave in courtland homes around 2700 sq.ft including upgrades coming upto 290,000. I made a down payment of 3000$ and expecting the house to be build by oct-nov 2007. Looking at the phoenix market and median home prices going down. And everyone is telling me baseline is crime ridden area. I'm thinking its a bad time and bad neighbourhood to buy a house. I'm thinking buying a home around dec 2008-june 2009 will be a good time. As I made a down payment of only 3000$, i'm thinking to back off from buying this home.

Any ideas????.

[sablebaby]

Check your paperwork. You may only lose your down payment/earnest money. I thought you were saying that after further review of the area you are buying that you want out and not about price. I would not recommend anyone live at 35th ave and Baseline.

[Magnum Mike]

I wouldn't back out of it because 290,000 is a bargain, compared to what it will most likely be 10 years from now. Don't let the median price of a home in the metro Phoenix area discourage you from buying a house now because that happens sometimes. Overall, when buy real estate, you don't buy for the short term.

Also, see if you can negotiate a lower price with the builder that's comparable to the value of other similar homes in the area.

[arun196]

Thanks for your views. Can I negotiate the price after I signed the paper work and the house in under construction?.

[Stumblina]

Originally Posted by arun196

Thanks for your views. Can I negotiate the price after I signed the paper work and the house in under construction?.

Probably not . . . but that would totally be up to the builder. If you've already signed the contract, gave the builder earnest money and it is being built, the builder is under no obligation to do anything for you . . . however, with a threat of backing out of the deal entirely, he may reconsider. On second thought, you may have signed a contract you can't get out of at all . . . at the very least you will probably lose the earnest money. You might want to seek the advice of counsel. Bottom line is, it can't hurt to try, just don't expect too much!

[Boatdrinks]

Read your contract closely. I imagine that you'll lose your earnest money if you back out. However, if you know for sure that you do NOT want the house and do NOT want to live in that area, 3K is a small price to pay to get out of it now. I'd rather lose 3K then be stuck with a 290K house that you probably won't be able to sell for a while if they're still building there.

However, if you want out of the contract ONLY b/c you think houses will be cheaper in a year, I wouldn't do it. No one can tell you what the market will be like in a year or two. I just heard a report on the news saying that all major markets, including PHX, will see a decline in housing prices for the next two years. The same day, I saw a news report on CNN, I think, saying that the housing market will pick up at the end of this year and prices will have bottomed out. My point is that no one has a crystal ball and for every story that says the market will continue to decrease, there's another saying it'll get better soon.

If you don't want to live there, try to get out of it. But if you DO want to live there and are just speculating that you may get a house cheaper in a year, I wouldn't do it. Also, if you're renting now and will be until you buy a house, remember that you'll be paying another year or two in rent, which money out the window with no tax benefits or equity earned.

[arun196]

Thanks @Boatdrinks. Appreciate your views.

[foma]

$290K a bargain in a supposed crime-ridden area? Man, I really know nothing about buying homes in the PHX market! I'm really not trying to sound like a smart-alec. DH&I are first time homebuyers and haven't lived in PHX very long.

[maggiekate]

if you really do have concerns, and your lost is only 3000. I would cut my loss, and wait. Otherwise talk to the builder, and explain your concern, and yes, it may be wise to contact an attorney for advise. Do what your heart and pocketbook feels is best.

[Ponderosa]

I've been in your position, and if I had to do it again I would take the loss. I bought a house in S. Phoenix when I first moved here many years ago. The neighborhood was new and the home models were 1000s less than the same model in Mesa and other parts of the valley that were growing then. We could have paid a little more each month, but it seemed like a good deal. I didn't know any better.

I sold later and I made money, but less than I would have made had I bought in the better location. And the whole time I was there, I was troubled whenever I told someone where I lived and saw the look on their faces. The house never gave us a "home" feeling because of that. We did not have the pride of ownership we would have had otherwise. I never got robbed, mugged, or was the victim of anything but my own pride there, but pride does count for something. Maybe it is worth $3000 to you.