Buying a house?

[john67elco]

Have a long story so bare with me:
I have a freind for 10 years that bought a home in Alta Loma CA near upland/Rancho Cucamonga. I helped him roof it, add cabnets, blah blah and basically he redid his whole house. Now he is getting a divorce and now wants to of course sell his home. I offered him a deal that is low (in this market) but high in my mind at $450,000 I pay closing he leaves plasma, washer dyer, and some other things. The house is on market for 515000 but no offers. He plans to lower to 499999 but even then I say good luck. I really think the home in my mind is really worth 400000 (cause im really been pissed at the market. Another sad thing is that I only saved up $50,000 and half closing cost total. I really dont want to pay PMI. We have 0 debts (no carpayments, kids, credit cars with balances)and rent is only $985 a month on a 3 bedroom house that I have been in 7 years and dont communicate with lanlord. Make $110,00 a year gross total. The house is 2 blocks from where she teaches. Even with staying there through the down cycle of real estate which is for sure coming, would it be wise to buy and just say that 10+ years it will be worth more? Or should I not even bother and save up more than 20% and wait for larger home cause his SQ ft is only 1292 on a 9000 sq ft lot? Any post would be helpfull thanks.
MLS http://www.imrmls.com:8080/servlet/lFullDetail?proptype=RESIDENTIAL&ml=C607466

[Farls]

Keep renting!! Unless there are some things that are so fantastic about this house I certainly wouldn’t buy now. Keep your money in the bank….Keep your expenses down (as they are)…I don’t think you can go wrong to continue renting a 3 bedroom house for only $985.

[lostkitty]

Keep renting for sure. Why on earth would you do that to yourselves? Your payment (with taxes etc) will be more than double what you pay now. Plus all the maintenance of a home – believe me – it adds up! Toilet breaks, sink breaks, roof leaks, ants invade, tree falls on house (maybe not in CA?) etc etc etc etc etc!

[powayseller]

Welcome to the forums. That sure is a cute house. If you are anything like my husband, you’ll spend an additional $600-$800 per month at Home Depot to do all kinds of fun things with it.

A $400K loan, w/ taxes and insurance, will run about $3K/month. So you’d be out $2K/month over today, plus you’ll be losing equity, as your home depreciates.

What’s the big hurry? I imagine you are impatient for the market to cool. Acting on that impatience will cost you…

Have you read posts by others, who said they were glad they waited to buy, as they are seeing the market price continue to go down?

Did you see the previous post, where people asked about buying vs. renting? The advice from everyone was to keep renting, and wait a few years to get that same house at 30%-50% off today’s price.

If sounds like the market is softening in your area, since the guy has had no offers. He is obviously overpriced.

Good luck, and keep us posted.

[davelj]

I’m with these folks… keep renting. Given your rent and circumstances, what’s the hurry?

[john67elco]

After more research, if we buy now we would lose over $36,000 over 7 years and thats with tax deductions, market going up (not down), reselling home fees. Market would have to keep going up also for me to only lose that much. I would be dumb to buy in this market even though we have been waiting 2 years for the market to shift. But if we continue to save $3,000 a month like we have been doing for 2 years and the market to come down, we could meet in the middle and not pay higher property taxes and PMI. It would still be better even if the intrest rates went up a whole 2% during the span. So we will keep renting and saving and not add to the stupidity of the outrageous market.

Who would ever think its cheaper to rent than buy? Haste does make waste. WOW thats a $36,000 loss even if it appreciated to $555,000 with $184,000 in equity in that 7 years. Thank you ALL for all your time for input i’m staying. 🙂

Some stats that I got from the rent verses buy calculator.
http://www.forsakencraft.com/MortgageCalculators.doc

And if it had 0% appreciation we would have lost:
Renting will cost you $116,651 less than owning over the 7 years, in today’s dollars.

[Steve Beebo]

If you’re currently renting a house in San Diego, you may be better off by continuing to rent for a couple of years. But if you’ve been renting for several years, you have really missed out on some big dollars.

Let’s say you owned or bought a house in 2001 that was worth $500,000, and it appreciated by 15% per year from 2001 to 2005. (We know that many areas in San Diego did much better than 15% per year.) Your property would now be worth about $875,000. If the property declines in value by 25% between 2005 and 2008, it would still be worth about $650,000. Personally, I don’t think that most properties will lose a full 25%.

[john67elco]

But I wasn’t ready to buy during that time, I was putting wife through 8 years of college. The problem besides would’ve could’ve should’ve is the present time. I will lose more buying now than in a bit for sure due to people are already having to come down off list price and paying 1/2 of full closing cost. Used to be homes sold in 1 week well over the asking price, paid no closing cost, and tone of bidding wars was occurring. So in my view market has already come down. The list price just hasn’t.

Also I just did a roof inspection today on a HOA in San Diego. Older condos on Navajo rd West of the 125 fwy (Lake Murray HOA), about 20% of those babies are for sale at the moment without buyers. 1 Year ago they would be long gone and wouldn’t have that much competition between other condos due to tons of investors buying most of them up. It all just looks like down then up is all.

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