First Time Homebuyer

[brother_iron]

Need a little help guys.

First time homebuyer. Two properties I am very interested in. Both townhomes. Just what I prefer, with just me and my girl no need for 3/4 bedroom and 2,500+ sq feet. The moneys not so much the issue, I just don't want to overpay especially since it seems like townhomes are really retaining too much value right now.


First townhome
Asking price 167,000
Appraisal Value - 111,000

Builders foreclosed. Another company came by and picked up all unsold units. This one has been on the market for a little over a year.


Second townhome
Asking price 155,000
Appraisal Value 135,000

Brand new construction. Great community. About 1/4 of properties unsold. Been done for 6 months.


How much should my initial offer be?

[Michaelthomasj]

Your offer should reflect the Appraisal value. If they are on the market for over a year ...they should want to get rid of it. Also first time home buyers will be able to get a nice tax incentive, althought i believe that ends in january or february. You also may want to see what the common charges are.. i have heard of some states ..where the occupied units have split the common charges from the units that are not occupied..im not sure of this but i believe i read a few articles and i beleive the units were in florida. If you pay more then the value for the unit...you will start out with negative equity

[brother_iron]

Originally Posted by Michaelthomasj

Your offer should reflect the Appraisal value. If they are on the market for over a year ...they should want to get rid of it. Also first time home buyers will be able to get a nice tax incentive, althought i believe that ends in january or february. You also may want to see what the common charges are.. i have heard of some states ..where the occupied units have split the common charges from the units that are not occupied..im not sure of this but i believe i read a few articles and i beleive the units were in florida.

Unfortunately not elligable for the first time homebuyers tax rebate, would be nice though.

Common Charges? As in closing costs?

[Michaelthomasj]

No..most condos townhomes...have a monthly charge..for maintenance. cutting grass,snow removal etc unless its up to the owner to care for there own, but i doubt it

[brother_iron]

Originally Posted by Michaelthomasj

No..most condos townhomes...have a monthly charge..for maintenance. cutting grass,snow removal etc unless its up to the owner to care for there own, but i doubt it

Ahh ok I see. Actually covered under the homeowners association for these two properties. What I like about the townhomes is the HOA fees actually cover home insurance as well under a blanket policy.

[pesty4077]

A 3 bedroom house will always go up in value more then a condo or townhouse. You can get great deals now, go below appraisal price for your bid. Do no get impatient or be afraid to ask for closing costs or things thrown in. Get a real estate agent to represent you. Word of caution, not all agents are good, do your homework and ask for referrals. Ask a ton of questons. Good luck!

[brother_iron]

Made an offer on the first townhome for 130,000. Agent says the lowest she would go is 154,000.

Same floor plan sq footage and everything recently sold for 128,000 in the complex but 3rd party not through the sales office.

[pesty4077]

Originally Posted by brother_iron

Ahh ok I see. Actually covered under the homeowners association for these two properties. What I like about the townhomes is the HOA fees actually cover home insurance as well under a blanket policy.

I would never depend on someone else for my insurance. Not all companies are the same. I have State Farm, they give you full price on your stuff, most companies do not, They will get you pro rated price for how old it is. Why pay HOA fees? Get a house that you won't. It is bad enough you have to pay taxes on the property, let alone other fees.

[scottbee]

with this economy,only offer what it appraised for! dont give anymore than its worth...cause if you dont buy it,it propably will sit there another year!!!

[pesty4077]

Originally Posted by brother_iron

Made an offer on the first townhome for 130,000. Agent says the lowest she would go is 154,000.

Same floor plan sq footage and everything recently sold for 128,000 in the complex but 3rd party not through the sales office.

Go some where else. To many good deals out there. Do not buy new property, houses are going for 1/2 price in some areas. Take your time.

[brother_iron]

Ok, thanks for talking me into what I knew I should do but was too stubborn lol. Absolutely right in regards to the appraisal value. I just can't imagine being a realtor getting 3% and saying no to a deal where the only difference is 500$ to me and being someone that sells in bulk in master plan communities.


I'm just scratching my head confused right now with why on earth they would deny the offer being on the market for a year and literally no offers on it.

[Dahouse]

Originally Posted by pesty4077

Go some where else. To many good deals out there. Do not buy new property, houses are going for 1/2 price in some areas. Take your time.

Pesty is giving sound advice...

A few other things to consider...before you buy make you look over the HOA's financial documents. As a general rule about 2/3's of the HOA's budget should be operating expenses (landscaping, common ground upkeep, lights, water, general maintence, etc). The other 1/3 should be set aside for long-term maintence. What type of reserves do they currently have?

Also, who are buying the units? Is it mainly owner-occupied or are investors buying them up? You may not care now, but when time comes to sell the condo, buyers who seek to live in the home, may have a difficult time securing a loan because the owner/Non-owner ratio is too low, (this only effects certain types of loans). But this could affect the sales price down the road, (is right now it is certain markets).

A couple of questions: How do you know the appraised value? When was the appraisal performed and who ordered it (current owner)? Like others said, in this market why would you offer above the appraised value? If you aren't putting down a large down payment or paying all cash this could be an issue with your loan.

Like Pesty said, a single family home would be a better investment, and if you don't want the upkeep, you can hire a gardener for less than a 1/3 of the hoa dues...

[Tyrone]

I went through the first time home buyer experience last year and Pesty gave me some good advice as well.

After making multiple offers on many diff. places and just getting out bid, our real estate agent showed us numbers of what the asking price was and what they were actually selling for in our areas...It gave us a better idea of what a more true market price, and what to actually offer. Remember the agent works for you...Make sure you have your own...they can have theirs.

[dgarr21]

Originally Posted by brother_iron

Ok, thanks for talking me into what I knew I should do but was too stubborn lol. Absolutely right in regards to the appraisal value. I just can't imagine being a realtor getting 3% and saying no to a deal where the only difference is 500$ to me and being someone that sells in bulk in master plan communities.


I'm just scratching my head confused right now with why on earth they would deny the offer being on the market for a year and literally no offers on it.

That is weird they rejected it. When you said your agent said the lowest she would offer is 154,000, as soon as i read that i thought ya right like i would ever listen to the salesperson making a profit on this. Over a year with no offers??? They will buckle soon on the offer or go bankrupt

[ericraven2003]

I sell townhomes/condos for a living. The only time a TH is a good idea to buy is when single family homes are much, much higher for the same sq ft. For example, where I am I sell a TH that is 2100 sqft for for the 260's. If you want a single family home in the same area, the same sqft will cost you about 390k. In areas like this you can and will make appreciation in a TH. If you are able to buy a single family for about the same as a TH then always go with the single family. FYI. I have been selling new homes for 9 years.


Edit. Area depends how good a deal you will get. I am in the DFW area, you will not find home prices being cut by 50% here. Area is very important when you buy as well. What surrounds you, whats the school district like(doesn't matter if you have kids or not), whats the demographic, the crime, etc. All this will determine how easy and profitable it will be to resale your home one day. Remember this is an investmen. If you don't make money on it when you sell, you might as well rent.

[ericraven2003]

Originally Posted by dgarr21

That is weird they rejected it. When you said your agent said the lowest she would offer is 154,000, as soon as i read that i thought ya right like i would ever listen to the salesperson making a profit on this. Over a year with no offers??? They will buckle soon on the offer or go bankrupt

Unless a builder is going under, they are not going to just give a way a home. Why would they? They can hold on to it making very minimal payments. The market it starting to turn around a bit in most areas so some builders are slowing the incentives. New home sales in DFW have been up5-6% in the last 4-5 months.

[pesty4077]

Originally Posted by ericraven2003

I sell townhomes/condos for a living. The only time a TH is a good idea to buy is when single family homes are much, much higher for the same sq ft. For example, where I am I sell a TH that is 2100 sqft for for the 260's. If you want a single family home in the same area, the same sqft will cost you about 390k. In areas like this you can and will make appreciation in a TH. If you are able to buy a single family for about the same as a TH then always go with the single family. FYI. I have been selling new homes for 9 years.

Are houses that high in Dallas? You can get houses that are fairly new for $75-$95 a square foot in my area. As a general contractor, I know you can't build a good house for that price, unless it is crap. New houses are not the way to go in todays economy with all the short sells and foreclosures. By the way, condos in my area go for $30,000-$75,000. I don't think I can afford to live in your area.

[ericraven2003]

Originally Posted by pesty4077

Are houses that high in Dallas? You can get houses that are fairly new for $75-$95 a square foot in my area. As a general contractor, I know you can't build a good house for that price, unless it is crap. New houses are not the way to go in todays economy with all the short sells and foreclosures. By the way, condos in my area go for $30,000-$75,000. I don't think I can afford to live in your area.

Has to do with location. I am selling 10 mins from downtown and the airport. My community closed 14 million in 08'. The farther you get away from Dallas the cheaper it is to build. I drive about an hour each way because of this. Land price, of course, determines house price. My TH lots are around 40-50k. Single family home lots are around 130-180k. I am lucky to be selling where I am at.

[pesty4077]

Originally Posted by ericraven2003

Has to do with location. I am selling 10 mins from downtown and the airport. My community closed 14 million in 08'. The farther you get away from Dallas the cheaper it is to build. I drive about an hour each way because of this. Land price, of course, determines house price. My TH lots are around 40-50k. Single family home lots are around 130-180k.

I agree, it does have alot to do with location. He needs to have a real estate agent pull up comps in his area for houses and TH and see what they are going for and then compare that to newer ones.

[ericraven2003]

Originally Posted by pesty4077

I agree, it does have alot to do with location. He needs to have a real estate agent pull up comps in his area for houses and TH and see what they are going for and then compare that to newer ones.

Exactly. And a good realtor at that. I have idiots come in wanting 100k off. I tell them," drive one hour north where I live and you can find that, but you aren't getting it here." LOL

A good realtor can really help. They can also keep you from wasting a bunch of time.