first time home buyer question (6%, agent, mortgage, mortgage)
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Location: Nothing could be finer... I'm in S. Carolina!!
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from reading a lot of posts, it looks like b/c of the market decline, many of you are suggesting not buying a house unless you're planning to stay in it for a long, long time.
what if we wanted to buy a "starter home" and wanted to stay in it for 2-3 years and sell to keep the profits to invest in a nicer home (my dream lake house)?
i'm sorry if this has been asked a thousand times! i tried looking for some info prior to posting.
It all depends on the market you are in. My area has, in my opinion, hit bottom so to speak. Our inventory is depleting nicely and pricing is starting to hold. It should stay that way for a while and then start increasing in pricing. It will not increase, again in my opinion, at the rate it did in the recent past by any means, but rather at a 'normal' rate. 3 years may not be enough to buy, then sell, take a 'large' profit and upgrade to something like you are talking about. But again, that depends on your area. And remember, as your property increases in value? So does that place you are looking to upgrade to.
Location: Nothing could be finer... I'm in S. Carolina!!
1,294 posts, read 6,490,287 times
Reputation: 421
thanks for the replies. i don't really have to turn a big profit, just want to make sure we do indeed get our money out of the house. we will be in the upstate of sc. i don't think it's hit bottom there yet, but it's definitely sloooowwwwww.
SC is still a decent market. Plus you have to remember the other benefits which come in the form of tax deductions. Look at the big picture. Also, make sure you work with an agent that understands what your intentions are, so they can find the "right" home for you.
Location: Nothing could be finer... I'm in S. Carolina!!
1,294 posts, read 6,490,287 times
Reputation: 421
one more question too - should we buy right now even if we're not going to be living in the house for a year? do you think in one year's time the market will have turned around and we'll end up paying more for the same house or perhaps a better house will be available for an even better price?
i know, it's silly, to consider buying a house a year out, but it's such a good time to buy - i don't want to miss out!!!
Last edited by fisher33; 05-07-2008 at 11:46 AM..
Reason: edited
It is not a good strategy to buy if you plan to move in 2-3 years. Conventional wisdom, before the bubble, was that you needed to plan to be in a house for at least 7 years for it to make sense to buy instead of rent.
Think about it - even if the market improves significantly in the next 3 years, the transactions costs for real estate are astronomically high. It will cost you 6% of the total price of your home (not just the appreciation) to have a realtor sell it. On a $200,0000 house - that is $12,000 - gone poof! Into a realtor's pocket.
Plus, there are closing costs you will have to pay on both sides of the purchase - selling that home and buying the next one. These are often thousands of dollars.
If you really want a better/ bigger home in that short of a time frame, you are much better off renting some place that is a lot cheaper, saving your money and then buying the home you want that you plan to stay in once you can afford it.
Location: Nothing could be finer... I'm in S. Carolina!!
1,294 posts, read 6,490,287 times
Reputation: 421
we actually don't have a house to sale, so that's good and we'd try to have the seller pay closing costs. but there's no way to be certain that would happen, of course.
i just hate to throw away money renting and in our area, there's not a lot of good rental houses - actually not any really. albeit, i haven't researched it that well but there aren't many people in the area that rent. the mortgage would only be about $1200/month so that's about as cheap as we'd rent too probably.
i wish i could buy my dream lake house right now too but instead of being $200k, they are $600k!! i have to wait a few years before i get my lakehouse and hopefully if the market does improve, we will end up making a little money on a house we buy to cover the increase in the market.
i'm also looking into lake lots or a lot w/ a really old house or trailor on it and building a house from scratch - but that would stress me out sooooo much. i'm a such a perfectionist, i may go crazy trying to build a house. and broke...haha.
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