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Old 05-27-2008, 09:52 PM
 
1 posts, read 2,250 times
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Could someone please email me their issues, and in the same area another company that you think would be better to work with?

I'm going to get approved for 150k, but I don't want to spend more than 130k and I want to be able to sell it if I have to later. Was thinking of buying a home because for almost the same price I can rent a place...

I was told if you buy a new home instead of a used home that the value in 7 years doubles.. Is this true? Im guessing it matters on location and other factors...

Thanks much!
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Old 05-28-2008, 06:32 AM
 
Location: Madison, AL
410 posts, read 1,653,685 times
Reputation: 129
At $130k you are almost certainly going to be buying a resale home. At that end of the market the new homes available are a very poor value.

Quote:
I was told if you buy a new home instead of a used home that the value in 7 years doubles.. Is this true? Im guessing it matters on location and other factors...
No, not true. Your gut is correct: it is only true in particular instances.

Hypothetically in a normal market, the AVERAGE home will double in value in 7 years based on historic trends. But like any investment, you can't bank on this; you could swing high or low. With almost any new home, there is a dip in real value after the purchase (much like a new car) that takes some time to overcome. Not to mention the extra costs of selling, which hurts owners who buy and sell too quickly, and even if the sale price is higher than you paid, you can still net a loss.

Buy a home because you want it and because if you purchase carefully, you will be way ahead financially over renting renting. Don't buy it because you are certain there will be a specific formula you can count on.
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Old 05-28-2008, 07:59 PM
 
Location: Las Flores, Orange County, CA
26,329 posts, read 93,761,592 times
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Quote:
Originally Posted by NicoleC View Post
Hypothetically in a normal market, the AVERAGE home will double in value in 7 years based on historic trends.
Ten percent average sounds a little high. (Rule of 72, 72/interest rate = time in years to double). I think it is more like six percent.

Is real estate the better bet? - Oct. 18, 2002
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Old 05-29-2008, 07:02 AM
 
Location: Madison, AL
410 posts, read 1,653,685 times
Reputation: 129
Did I say double? Yikes, major brain fart. Thank you for catching that. No, not double. The average appreciation in the US is something like 5-7% per year -- although regional markets vary widely.
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