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I am currently under contract and nervous as heck. The property (a semi attached townhouse) is beautiful and has all the updates. It truly has everything I was looking for: a small back yard with patio, 1.5 car garage. 3 bedrooms 2.5 baths and 1450 sq ft. It is in a decent area and close to lots of stores and restaurants.
However; I am concerned Im over paying (let’s face it we all are right now). I am renting and my rent is gong up $230 a month if I sign a new lease.
My rental is $1900 a month for a 1/1 and I pay extra for parking. This is the normal price in the location I am currently in. The house I am under contract for is 13 miles outside the city but much larger and spacious my payment is also much lower!
Yes my concern is this: there was 11 contracts on the house I was number 12 these all came in within 1 day of it being listed. I went in at $15k over asking. I was the contract they went with. I am
Nervous bc the house is now $20k more than any other home that’s sold in the direct neighborhood (55 townhomes) however the last sale was 3 months ago and that home was not redone (mine has new HVAc, water heater, all new appliances and brand new wood floors (the other had carpet) as well as new bath room vanities and a new granite countertop in the kitchen. Does that make it worth $20k more?
No one has a crystal ball here but am I going to loose my tail in the coming years or what? I want to think the house will appreciate but the current market scares me.
My interest rate is low and the area around the house is booming, many new stores and neighborhoods are being built around it.
Thanks for your guidance.
The home is in the Charleston SC. Area
Edit I know the home might not appraise for what I am under contract for and willing to walk away if it doesn’t and the seller won’t come down.
The improvements and maintenance you speak of would easily cost more than $20K to do.
The biggest question I have is whether you are committed to being that much further out. That's the thing that might bug you every day.
You are paying less for the home than you would pay monthly if you rented and gained NO equity. There is no reason to think the home won't continue to appreciate if you take care of it.
Sounds like it has been well taken care of and upgraded, your are trading commuting time for space and your own place. A low interest rate is a wonderful thing, especially in a popular area.
Truly consider if it is worth walking away if it doesn't appraise at your offer price. I believe that sought after areas will continue to go up in value and you may regret not buying while interest rates are low.
I am currently under contract and nervous as heck. The property (a semi attached townhouse) is beautiful and has all the updates. It truly has everything I was looking for: a small back yard with patio, 1.5 car garage. 3 bedrooms 2.5 baths and 1450 sq ft. It is in a decent area and close to lots of stores and restaurants.
However; I am concerned Im over paying (let’s face it we all are right now). I am renting and my rent is gong up $230 a month if I sign a new lease.
My rental is $1900 a month for a 1/1 and I pay extra for parking. This is the normal price in the location I am currently in. The house I am under contract for is 13 miles outside the city but much larger and spacious my payment is also much lower!
Yes my concern is this: there was 11 contracts on the house I was number 12 these all came in within 1 day of it being listed. I went in at $15k over asking. I was the contract they went with. I am
Nervous bc the house is now $20k more than any other home that’s sold in the direct neighborhood (55 townhomes) however the last sale was 3 months ago and that home was not redone (mine has new HVAc, water heater, all new appliances and brand new wood floors (the other had carpet) as well as new bath room vanities and a new granite countertop in the kitchen. Does that make it worth $20k more?
No one has a crystal ball here but am I going to loose my tail in the coming years or what? I want to think the house will appreciate but the current market scares me.
My interest rate is low and the area around the house is booming, many new stores and neighborhoods are being built around it.
Thanks for your guidance.
The home is in the Charleston SC. Area
Edit I know the home might not appraise for what I am under contract for and willing to walk away if it doesn’t and the seller won’t come down.
No one knows exactly what is going to happen to housing prices (or the price of anything else for that matter) in the future, but it sounds like you've contracted to buy a nice place at a reasonable cost considering today's market prices.
Could housing prices drop in a year or so? Sure, but they could also continue to climb. Or they could level off. No one knows, but it sounds like it's a reasonable alternative to continuing to rent. I'm assuming that you've considered and are capable of taking care of the other costs that are associated with owning a house such as real estate taxes, homeowner's insurance, maintenance, and that sort of thing.
P.S. I wouldn't worry much about a low appraisal. If it does happen, it might be an opportunity for you to get the house for less than you've agreed to pay for it. And it may very well be worth it to pay a little more than appraised price in this situation if you have to.
The alternative is to not pay the extra money and cancel the contract and then you're back to square one and starting your search all over again. If you can afford it and your income is reasonably secure, I'd suggest going through with the deal based on what you've told us of the situation. Being nervous about a big purchase is normal, especially your first purchase.
Relax. Most 1st time buyers get scared once under contract.
You should be fine in the long run. Rents will not go down because taxes and repairs keep going up. So if you needed to move and market isn't there to sell, you can rent it out for more than mortgage, most likely.
Buying a new home is always stressful but your getting a beautiful upgraded home, bigger than the apartment your currently in for less money. I think it’s definitely worth it. If the appraisal doesn’t come in for the sell price and seller won’t negotiate , then you have a choice to make, but in this market it sounds like you found a beautiful home.
If you think it through, and you love the place you’re buying & hope to stay.. You honestly don’t really want it to “appreciate” in value. Appreciation triggers increased property taxes - which you really can’t duck out of, and paying those tax bills isn’t particularly satisfying.. appreciation beyond the rate of inflation doesn’t really help anyone except flippers, speculators, and the tax man.
My rental is $1900 a month for a 1/1 and I pay extra for parking. This is the normal price in the location I am currently in. The house I am under contract for is 13 miles outside the city but much larger and spacious my payment is also much lower!
Yes my concern is this: there was 11 contracts on the house I was number 12 these all came in within 1 day of it being listed. I went in at $15k over asking.
Edit I know the home might not appraise for what I am under contract for and willing to walk away if it doesn’t and the seller won’t come down.
You're going to be in a better place next year than you were last year. You will have a much higher standard of living and a much lower monthly cost. There's nothing to be worried about.
You can worry for eternity about whether you "left money on the table" or got the best deal possible. Just know that you will be better off and don't look back.
If it doesn't appraise for the contract the owner will have to lower to the appraisal or hope for a cash buyer, or at least a buyer willing to cover the appraisal difference in cash. Appraisers will not give you a number that you want but are not all the same either and your realtor knows who tends to run high and who runs low.
If the house goes down in value after you buy, it doesn’t matter UNLESS you go to sell. It will eventually come back. My real life examples: bought in 2006 for $225. Sold in 2010 $213. Our buyer turned around and sold in 2015 for $253.
Another house sold in 2007 for about $370. Went into foreclosure, we bought it in 2010 for $311. We sold in 2017 for $365. Today it’s probably worth $425.
Buy the house. Don't sweat it. The appraisal is likely to be fudged to agree with the contract price. If not, I hope you have the cash to make up the difference. The way house prices have been going, comps will overtake and exceed your price in the next few months.
I bought a house in June 2019 for $238,000. Like you, my house has everything I wanted. Size, shape, oversized lot, neighborhood, 5 minutes from my old house and from my friend's house, minutes from shopping for everything. Comps in my neighborhood today are between $350,000 and $400,000 over the last 5 months. Current asking prices are edging up over $400,000.
As incredible as that has been I think there is still time to ride the wave of appreciation. Even if not, if you buy the house to live in, over time the value will appreciate.
I bought my old house in 1998 for $145,000, lived in it for 22 years, watched the value go up, down, then up again and sold it last year for $375,000.
It'll happen for you, too.
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