House Buying in Fu**ed Economy

Off Topic
62

[quote]Professor X wrote:

[quote]VanderLaan wrote:

[quote]haas wrote:

[quote]Paste42 wrote:

[quote]VanderLaan wrote:

As far as what to look for, you should trust your gut. If there are cracks, stains, popped nails, poor trim work, etc, have them fix it. They will try to wait you out, but if you have not paid them anything, you hold the trump card.
[/quote]
X2. Critique their work like you have done it yourself. Don’t let someone half-ass something and get away with it, you’re paying for a quality job so that’s what you should expect. After what I went through, I’d get some family members to give a second opinion on finished work since they’ll be honest about what they see. [/quote]

It is not uncommon for some of this stuff to show up months after closing. It should all be covered under warranty but it is sometimes difficult to get the contractor back six months down the road.[/quote]

True. However, he will have a walk-through to make a sign-off list before he makes his final payment to the contractor. It is a lot easier to have them fix it right then - when they are wanting his coin, than six months later - after he has paid them the money and they are working on another job.

PX- with regards to the shower, consider a walk-in shower with a glass door, multiple showerheads and a bench. My neighbor just built their house and they have one made out of a slate tile that looks absolutely tits. With regards to the tub, I would suggest you be sure to put it in the MBA. A MBA without a tub is liability when you go to sell it later. Given your “weirdness” about being in one place, you will likely be moving again at some point. That said, consider a 6’ soaking tub - not a whirlpool. Supposedly, soaking tubs are the next big thing (WPs are expensive and a PITA to keep clean). I am 6’6" tall and my tub is 6’ long, about 36" wide and over 24" deep (guesstimates). Me and the GF can easily fit in the tub without having to lay on top of each other.

Building a house is fun and a pain in the ass. Try to make sure that it is mostly fun.

[/quote]

Let me ask, how much would it be to remodel a bathroom after the fact? If they expand the shower, there is no room for a bathtub. That means I have to deal with the tiny shower and space saver bath tub that was originally there.[/quote]

Can they take up some space from an adjoining room? Funny as it sounds, nice bathrooms are a huge selling point. As far as having another tub on the same level, that will probably be for the kids. Even if she never really uses it, the wife will have dreams of luxurious candlelight baths.

63

One other thing I want to mention is if you ask for certain furniture, make sure you get that furniture. What happens is Contractors swap furniture for cheap look a likes to collect more money for themselves. Also be careful about payment! Not everyone is an honest worker. I have had family’s come to me to help with their houses after a contractor built half of their house then ran away with 180k.

64

[quote]Professor X wrote:

Let me ask, how much would it be to remodel a bathroom after the fact? If they expand the shower, there is no room for a bathtub. That means I have to deal with the tiny shower and space saver bath tub that was originally there.[/quote]

Remodels can be anywhere from $5,000(you’d probably be doing some work) to $50,000(contractor, custom tile work, relocation of utilities). It really all depends on what you would like done.

There are ways to prep the bathroom for future remodeling so that you’ll already have the drains, supply lines, vent stacks ready to go. Talk with your contractor about that though and see if they’re capable of doing this(legally).

65

Damn…200k for a something mansionesque? Where? I just paid over 500k for a small ranch. If I lived in a more reasonable area, I’d be doing whatever I could to accumulate properties NOW.

For the record, that is not because I think the economy is fine, or because home prices are going to shoot up in the near term, I actually think the opposite. As interest rates start to creep up, I think home prices will be under pressure some more. But in the intermediate term I think now is a good time.

66

[quote]Professor X wrote:

[quote]Testy1 wrote:
It’s not for everyone, lot’s more upkeep than most non homeowners expect. From watching some of those home buying shows it seems there are a lot of great deals in Texas, I was surprised at how much you could get for your money.[/quote]

I was surprised as well. You can probably find a brand new house right now in this city with 4-5 bedrooms for under $150,000. Foreclosures seem to be all over as well even though people seem to try to destroy the house before they leave it.[/quote]

Come out to NorCal and you can nearly multiply that figure by 10.

67

[quote]Tyler23 wrote:

[quote]Professor X wrote:

[quote]SteelyD wrote:
One thing to think about, too, is family growth. If I recall, you’re a not-married dude with no kids? If you think this has any chance of changing in the next 5-10 years, and you plan on being in this house, think about how your ‘space’ is going to change.

My house has been fine for wife and 2 young kids. As they’re getting older though, and another on the way, this house is starting to feel a bit cramped. Add on that I work from home (which I didn’t when we bought it).

I need a lot of space and starting to feel crunched. As much as you can, try to account for change as if the market is still a little depressed, you may not be able to dump the house.

Is your foundation in? You guys have full basements, crawlspaces, or slabs down there? Water in basement flat out sucks. You should know if you’re going to have a damp basement before the house is done.[/quote]

Houses here, to my knowledge to not have basements because of how close we are to sea level. I am sure you hit water if you dig too deep around a port city.

The foundation is laid which I hear means the house should go up quickly now within 2-3 months but nothing else.[/quote]

In order to qualify for the tax credit, you need to be under contract by 4/30 (sounds like you are) and close by 6/30. So you will want to keep your builder on track to take advantage of that.
[/quote]
In addition, income phase out ranges for the credit are 125,000 - 145,000. Make above 145k and the credit is gone. If you sell the house within three years from date of purchase or stop using as a personal residence, the credit has to be repaid.

68

[quote]VanderLaan wrote:

[quote]haas wrote:

[quote]Paste42 wrote:

[quote]VanderLaan wrote:

As far as what to look for, you should trust your gut. If there are cracks, stains, popped nails, poor trim work, etc, have them fix it. They will try to wait you out, but if you have not paid them anything, you hold the trump card.
[/quote]
X2. Critique their work like you have done it yourself. Don’t let someone half-ass something and get away with it, you’re paying for a quality job so that’s what you should expect. After what I went through, I’d get some family members to give a second opinion on finished work since they’ll be honest about what they see. [/quote]

It is not uncommon for some of this stuff to show up months after closing. It should all be covered under warranty but it is sometimes difficult to get the contractor back six months down the road.[/quote]

True. However, he will have a walk-through to make a sign-off list before he makes his final payment to the contractor. It is a lot easier to have them fix it right then - when they are wanting his coin, than six months later - after he has paid them the money and they are working on another job.

PX- with regards to the shower, consider a walk-in shower with a glass door, multiple showerheads and a bench. My neighbor just built their house and they have one made out of a slate tile that looks absolutely tits. With regards to the tub, I would suggest you be sure to put it in the MBA. A MBA without a tub is liability when you go to sell it later. Given your “weirdness” about being in one place, you will likely be moving again at some point. That said, consider a 6’ soaking tub - not a whirlpool. Supposedly, soaking tubs are the next big thing (WPs are expensive and a PITA to keep clean). I am 6’6" tall and my tub is 6’ long, about 36" wide and over 24" deep (guesstimates). Me and the GF can easily fit in the tub without having to lay on top of each other.

Building a house is fun and a pain in the ass. Try to make sure that it is mostly fun.

[/quote]
Unless you are over 6’5" I would highly recommend against the 6’ tub. I got talked into it by my contractor when I did a reno a couple of years ago and my wife and I both regretted it. It was a 6’ spa tub, so it had jets in it and it was deep. There are multiple problems with this setup:

  1. There are very few 6’ tubs on the market, which means they are quite a bit more expensive.
  2. Since there are fewer of them, the options you may be looking for are fewer, which limits the selection even further. For example, the tub we needed had to be a left side faucet with the left side of the tub facing outward, since it was going into a corner. You would think this isn’t a problem, but it was as most tubs were configured the other way. Basically, there were two tubs on the market that met our criteria = $$$.
  3. A 6’ tub takes a lot more water to fill it than a 5’ tub. We had a 55 gal. water heater. Turns out, the 6’ tub took about 75 gals to fill it so that my knees wouldn’t stick out when I laid down. So, essentially, I had to use cold water to fill it to where I wanted or stop when the hot water ran out and have exposed knees. It also takes a looooonnnnnnngggggg time to fill a 6’ tub and wastes a shit load of water.

I spent probably $4.5 k on this damn tub when it was all said and done (delivery, labor, additional electrical work for the motor, etc) and used it maybe 3 times in 2 years. We sold the house last fall and upgraded to a higher-end neighborhood while the market was at the bottom (hopefully).

DB

69

[quote]johnnytang24 wrote:
You won’t see much of that $8000 if you make over $75,000 and none at all over $95,000.[/quote]

For the record, they changed this. I believe the cut off now is closer to 130K until the end of April 2010 (assuming you are under contract by April 30). That means now is/was the time to buy if you were going to.

70

[quote]krayon wrote:
If you plan on building your home you might want to try a manufactured home like clayton homes.

www.claytonhomes.com[/quote]

God hates trailers. Hurricanes and tornados tend to destroy them. Plus X makes more than 30K a year.

71

[quote]Professor X wrote:

[quote]johnnytang24 wrote:
You won’t see much of that $8000 if you make over $75,000 and none at all over $95,000.[/quote]

For the record, they changed this. I believe the cut off now is closer to 130K until the end of April 2010 (assuming you are under contract by April 30). That means now is/was the time to buy if you were going to.[/quote]

Yup, they changed this when the original credit expired Dec 1. Which is good for me because the refund is retroactive and I closed Nov 20 so I’m getting $8,000 now. The only pain in the ass is you can’t e-file if you accept this credit. It has to be sent via paper mail. So you can expect it to take 2 months for it get processed.

Overall, I think it’s still think now is a good time to buy. Maybe even better now than when I bought in November. I was able to get 2 bedroom 1958 Cape cod with built in garage, nice backyard, walk in basement (half above ground so its not dingy) and an entire 2nd floor which I will turn into a loft or master bedroom. I’m building a bedroom/chill area in the basement for less than $500. I’m 12 miles from Times Square and got this place for $252,000 with the seller covering closing costs. I’m very happy with my decision. There’s no way I’d get a condo or townhouse after living in apt buildings my whole life.

72

[quote]Professor X wrote:

[quote]johnnytang24 wrote:
You won’t see much of that $8000 if you make over $75,000 and none at all over $95,000.[/quote]

For the record, they changed this. I believe the cut off now is closer to 130K until the end of April 2010 (assuming you are under contract by April 30). That means now is/was the time to buy if you were going to.[/quote]

You had better do it soon.

I bought a short sale (took 8 months) and had several other offers pending during the process but finally ended up with the original Short Sale. 2100 sf 4 br 3 full baths 305k. Culdesac pie shape large lot. This was my third purchase of a house…but when we bought it we were not married yet, so she was able to qualify for the the 8k, and we did that on ammended 2008 taxes. We closed 2 weeks before our wedding and the end of 2009!

Rates are rising. Owning property is the best way to hold onto your cash and keep it from the feds if you make good money and are single. The mortgage deduction and prop tax deduction could be 15-20k easy every year.

I did not own a house for a year after my divorce, and I took it in the shorts as a single guy with a decent income becuase I traded the 401k for the house that was underwater so I owed the IRS this last year.

73

[quote]kothreat wrote:

[quote]Professor X wrote:
I was surprised as well. You can probably find a brand new house right now in this city with 4-5 bedrooms for under $150,000. Foreclosures seem to be all over as well even though people seem to try to destroy the house before they leave it.[/quote]

that’s ridiculous. wanna see what $150 000 will buy where I live…

http://www.realtor.ca/propertyDetails.aspx?propertyId=9106860[/quote]

This is what it buys where I live.

74

[quote]Professor X wrote:

[quote]johnnytang24 wrote:
You won’t see much of that $8000 if you make over $75,000 and none at all over $95,000.[/quote]

For the record, they changed this. I believe the cut off now is closer to 130K until the end of April 2010 (assuming you are under contract by April 30). That means now is/was the time to buy if you were going to.[/quote]

That is correct, I just bought a house in February and make over 75k, got my tax return already. Be sure to get a certified copy of the HUD. I went in to do my taxes with the HUD and they turned me away and said if I wanted to get the $8000 i needed a certified copy. Not hard to get, but if you get it from the get go it’ll save you a trip to the Tax Man when you do your Amendment.

75

[quote]Professor X wrote:

[quote]kothreat wrote:

[quote]Professor X wrote:
I was surprised as well. You can probably find a brand new house right now in this city with 4-5 bedrooms for under $150,000. Foreclosures seem to be all over as well even though people seem to try to destroy the house before they leave it.[/quote]

that’s ridiculous. wanna see what $150 000 will buy where I live…

http://www.realtor.ca/propertyDetails.aspx?propertyId=9106860[/quote]

Yeah…that sucks.

I am sure places like California and New York are expensive as hell also.[/quote]

Oh yes they are. Went on the Market saying I wanted to spend no more then $350K on my first house. Was looking in the Los Angeles Area (which the prices really crashed here) but even so I couldn’t find anything in a respectable neighborhood. Even the not tooo ghetto neighborhoods but still pretty bad, the houses for that price were torn apart and had no yard.

I ended up moving to a suburb outside of Los Angeles to a 4 bed 3 bath beautiful home, it’s a 2 hr commute, but I’m young so I figure I can do it for now and reap the reward a few years from now when I sell it in a better economy.

The yard work and house work is extremely time consuming but a lot of fun in my opinion and you learn a lot.

76

[quote]Rockscar wrote:
I traded the 401k for the house that was underwater so I owed the IRS this last year.

[/quote]

That was a good move.

Owing is a function of being under withheld/not pay in estimates.

77

[quote]AndrewG909 wrote:

The yard work and house work is extremely time consuming but a lot of fun in my opinion and you learn a lot.[/quote]

This is one of the reasons I like home ownership. For the 1st time in my life I can trash the house and yard and have no one to answer to but myself since I bought it as a single guy. I just dug up a 10x30 section of my backyard this weekend because it was a gay rose garden. Fuckin waste. If don’t like it, I tear it up. I don’t even know what I’m doing most of the time, but I’ve got friends who are good with this stuff and they help me out when I get in over my head lol.

78

[quote]countingbeans wrote:

[quote]Rockscar wrote:
I traded the 401k for the house that was underwater so I owed the IRS this last year.

[/quote]

That was a good move.

Owing is a function of being under withheld/not pay in estimates.

[/quote]

The goal is to try and make sure my writeoffs and taxes give me either owing a small amount or breaking even. I don’t want the IRS to have my extra 3k the whole year if they owe me at the end.

79

[quote]sam_sneed wrote:
dug up a 10x30 section of my backyard this weekend because it was a gay rose garden. [/quote]

Dude, I highly recommend straight roses for the garden. They don’t rub it in your face like the gay ones do, and they are less maintenance overall.

In all seriousness…why not plant a veggie garden in it’s place! Awesome tomatos, corn, squash, cucumber, carrots, artichokes, beans, peppers…I just planted last weekend in my raised box 10x15 garden.

80

^^^ Oh yes, good friends who know their way around landscaping and construction are worth double their weight in gold!!!

If you have any distant friends PX that do contracting, it’s time to start hitting them up and taking them to lunch.

I’ve got a buddy building a wall for me and paving the drive way for me, to make room for RV parking. All i’m paying is parts cost and a little extra for his time. Then he agreed to help me build a stone BBQ pit in my backyard with a stone walkway to a jacuzzi. This guys is really helping me get as much bang for my buck from my tax return.

81

[quote]Rockscar wrote:

[quote]countingbeans wrote:

[quote]Rockscar wrote:
I traded the 401k for the house that was underwater so I owed the IRS this last year.

[/quote]

That was a good move.

Owing is a function of being under withheld/not pay in estimates.

[/quote]

The goal is to try and make sure my writeoffs and taxes give me either owing a small amount or breaking even. I don’t want the IRS to have my extra 3k the whole year if they owe me at the end.
[/quote]

A man after my own heart