[quote=ocrenter][quote=sdduuuude]But you just said that paying of the MR doesn’t increase the value of a particular home by as much as the amount you pay off. How is knowing that you can pay it off (and effectively lose money), any comfort at all ? ?
he point is – you put yourself in a no-win situation. Here I am, today, with no house.
OK. So I can choose to buy a house with MR or not.
If I choose an MR house, then I am choosing to buy either the right to make payments on a 9% loan or the right to make a lump-sum payment which will improve the value of my house by less than that lump-sum payment.
If you choose to put yourself in a position where your next move is a choice between two bad options, then it’s a bad choice.
Those MR should trade like the cash liabilities that they are and the only way is for buyers to start putting MR payoff requests in their offers.[/quote]
But it isn’t a no win situation. Had I completely ruled out all homes with MR, I would not be able to purchase my home at $260k discount from original asking.
Now I simply need to pay about 1/5 that discount to get rid of the MR.
The point here is there’s a lot of people like yourself that shy away from communities with MR. Which helps create more bargains in MR communities. And it just so happens these are communities that was hit hard, hence, more great opportunities. This often means excellent bargains even factoring in the yearly MR. With the ability to pay off the MR early at 1/3 the long term cost, it makes buying bargains in MR communities even more attractive.
If you insist that’s no win, sure, be my guest.[/quote]
With me, it’s a logic problem. Either you realize all the gain of buying down the MR or you don’t.
If you have to pay $40K to buy down your MR and you feel you got a $40K discount vs. a comparable property because of it, then you are good. And if that is really the case, then you would honestly get the $40K back when you sell.
But, sdr and others said that you aren’t going to get that $40K back when you sell, so I’m not so sure I believe that you got as much of a discount due to the MR that you think. Your $250K discount was due to the other factors you mention.
Pragmatically, we’ll never know, of course. Who can measure it ? Nobody. The only way to know is if buyers start putting it in the offer letter so you can compare properties against each other.
The neat thing about this thread is – it points out the importance of knowing how buyers and sellers value MR vs. the actual, real cost of it.
