Is this a good deal ?

[sdcellar]

My contention is that they almost certainly would have sold for higher prices.

I should also take this opportunity to correct myself and acknowledge that the one other thing that will negate the impact of significant M-R taxes is time itself. In twenty years or so, they should be paid off and become a non-factor (and this may well occur more quickly than inflation will numb the hit).

I’ve heard anecdotally that the M-R assessments can be extended, but I have no idea how often it occurs to any meaningful extent.

A buyer today would still be wise to not overrate such long-term effects, however. That is, be careful not to put too much stock into the 30-year (or 20-) argument as many homeowners never get there. If instead, it’s honestly your home to die in, then yes, your kids might not be so affected by your currently (outrageous) Mello-Roos.

[an]

[quote=bearishgurl]More taxes at SCP … I agree, AN. But let’s presume all-cash sales in each subject sold comp.[/quote]
OK, lets assume all-cash sales, do you think the buyer will pay off the MR too? IIRC, in another post, you suggest not to pay off the MR. So, lets assume such buyer don’t pay off the MR, they will be paying $224k less for the house. If you can get 4% return on that $224k, then the interest would probably be enough to cover your MR (depending on your tax bracket). So, you’re not really paying $77k more, but closer to $224k (depending on your rate of return and tax bracket) more for the SCP home.

[an]

[quote=bearishgurl]More taxes at SCP … I agree, AN. But let’s presume all-cash sales in each subject sold comp.[/quote]
OK, lets assume all-cash sales, do you think the buyer will pay off the MR too? IIRC, in another post, you suggest not to pay off the MR. So, lets assume such buyer don’t pay off the MR, they will be paying $224k less for the house. If you can get 4% return on that $224k, then the interest would probably be enough to cover your MR (depending on your tax bracket). So, you’re not really paying $77k more, but closer to $224k (depending on your rate of return and tax bracket) more for the SCP home.

[an]

[quote=bearishgurl]More taxes at SCP … I agree, AN. But let’s presume all-cash sales in each subject sold comp.[/quote]
OK, lets assume all-cash sales, do you think the buyer will pay off the MR too? IIRC, in another post, you suggest not to pay off the MR. So, lets assume such buyer don’t pay off the MR, they will be paying $224k less for the house. If you can get 4% return on that $224k, then the interest would probably be enough to cover your MR (depending on your tax bracket). So, you’re not really paying $77k more, but closer to $224k (depending on your rate of return and tax bracket) more for the SCP home.

[an]

[quote=bearishgurl]More taxes at SCP … I agree, AN. But let’s presume all-cash sales in each subject sold comp.[/quote]
OK, lets assume all-cash sales, do you think the buyer will pay off the MR too? IIRC, in another post, you suggest not to pay off the MR. So, lets assume such buyer don’t pay off the MR, they will be paying $224k less for the house. If you can get 4% return on that $224k, then the interest would probably be enough to cover your MR (depending on your tax bracket). So, you’re not really paying $77k more, but closer to $224k (depending on your rate of return and tax bracket) more for the SCP home.

[an]

[quote=bearishgurl]More taxes at SCP … I agree, AN. But let’s presume all-cash sales in each subject sold comp.[/quote]
OK, lets assume all-cash sales, do you think the buyer will pay off the MR too? IIRC, in another post, you suggest not to pay off the MR. So, lets assume such buyer don’t pay off the MR, they will be paying $224k less for the house. If you can get 4% return on that $224k, then the interest would probably be enough to cover your MR (depending on your tax bracket). So, you’re not really paying $77k more, but closer to $224k (depending on your rate of return and tax bracket) more for the SCP home.

[an]

[quote=sdcellar]A buyer today would still be wise to not overrate such long-term effects, however. That is, be careful not to put too much stock into the 30-year (or 20-) argument as many homeowners never get there. If instead, it’s honestly your home to die in, then yes, your kids might not be so affected by your currently (outrageous) Mello-Roos.[/quote]
Totally agree. Which is why monthly payment is what you should really use to compare those two properties (especially if you don’t plan to die in the place). The monthly payment gap would be even bigger after the MR drops off. With those two examples, the SB property starts out with ~$900/month cheaper after all expense. That haven’t count in ~$200/month less in property tax. It would be another $400/month cheaper if you decide to stay past the life of the MR.

[an]

[quote=sdcellar]A buyer today would still be wise to not overrate such long-term effects, however. That is, be careful not to put too much stock into the 30-year (or 20-) argument as many homeowners never get there. If instead, it’s honestly your home to die in, then yes, your kids might not be so affected by your currently (outrageous) Mello-Roos.[/quote]
Totally agree. Which is why monthly payment is what you should really use to compare those two properties (especially if you don’t plan to die in the place). The monthly payment gap would be even bigger after the MR drops off. With those two examples, the SB property starts out with ~$900/month cheaper after all expense. That haven’t count in ~$200/month less in property tax. It would be another $400/month cheaper if you decide to stay past the life of the MR.

[an]

[quote=sdcellar]A buyer today would still be wise to not overrate such long-term effects, however. That is, be careful not to put too much stock into the 30-year (or 20-) argument as many homeowners never get there. If instead, it’s honestly your home to die in, then yes, your kids might not be so affected by your currently (outrageous) Mello-Roos.[/quote]
Totally agree. Which is why monthly payment is what you should really use to compare those two properties (especially if you don’t plan to die in the place). The monthly payment gap would be even bigger after the MR drops off. With those two examples, the SB property starts out with ~$900/month cheaper after all expense. That haven’t count in ~$200/month less in property tax. It would be another $400/month cheaper if you decide to stay past the life of the MR.

[an]

[quote=sdcellar]A buyer today would still be wise to not overrate such long-term effects, however. That is, be careful not to put too much stock into the 30-year (or 20-) argument as many homeowners never get there. If instead, it’s honestly your home to die in, then yes, your kids might not be so affected by your currently (outrageous) Mello-Roos.[/quote]
Totally agree. Which is why monthly payment is what you should really use to compare those two properties (especially if you don’t plan to die in the place). The monthly payment gap would be even bigger after the MR drops off. With those two examples, the SB property starts out with ~$900/month cheaper after all expense. That haven’t count in ~$200/month less in property tax. It would be another $400/month cheaper if you decide to stay past the life of the MR.

[an]

[quote=sdcellar]A buyer today would still be wise to not overrate such long-term effects, however. That is, be careful not to put too much stock into the 30-year (or 20-) argument as many homeowners never get there. If instead, it’s honestly your home to die in, then yes, your kids might not be so affected by your currently (outrageous) Mello-Roos.[/quote]
Totally agree. Which is why monthly payment is what you should really use to compare those two properties (especially if you don’t plan to die in the place). The monthly payment gap would be even bigger after the MR drops off. With those two examples, the SB property starts out with ~$900/month cheaper after all expense. That haven’t count in ~$200/month less in property tax. It would be another $400/month cheaper if you decide to stay past the life of the MR.

[CA renter]

[quote=sdcellar]My contention is that they almost certainly would have sold for higher prices.

I should also take this opportunity to correct myself and acknowledge that the one other thing that will negate the impact of significant M-R taxes is time itself. In twenty years or so, they should be paid off and become a non-factor (and this may well occur more quickly than inflation will numb the hit).

I’ve heard anecdotally that the M-R assessments can be extended, but I have no idea how often it occurs to any meaningful extent.

A buyer today would still be wise to not overrate such long-term effects, however. That is, be careful not to put too much stock into the 30-year (or 20-) argument as many homeowners never get there. If instead, it’s honestly your home to die in, then yes, your kids might not be so affected by your currently (outrageous) Mello-Roos.[/quote]

An example of this thinking in North County.

Even though we don’t like the look and feel (and HOAs and Mello-Roos) of new communities, we try to keep an open mind, especially since what we really want is in very short supply.

We checked out a house today that would suit our family beautifully — good-sized house, big yard for the area, yet we could live in it when we’re old, since we’re buying our “toe-tag” house…AND it was priced very well for what it is. It’s a newer house, so it has the MR and HOA. When we added it all up, the MR, HOA, and property taxes alone would have come to around $900/month. No way we want to deal with a payment like that on a paid-off house when we’re retired.

Like you mentioned, MR **might** be paid off in 20-30 years, but there is no guarantee. I’ve also heard about the possibility that they can extend the MR, so we can’t count on a certain, fixed cost when we’re retired. No way we want to take that risk, especially when retirement plans/pensions are in such a precarious situation as they are today.

So…we decided against the house. I’m sure we’re not the only buyers who worry about MR and HOA fees like this.

[CA renter]

[quote=sdcellar]My contention is that they almost certainly would have sold for higher prices.

I should also take this opportunity to correct myself and acknowledge that the one other thing that will negate the impact of significant M-R taxes is time itself. In twenty years or so, they should be paid off and become a non-factor (and this may well occur more quickly than inflation will numb the hit).

I’ve heard anecdotally that the M-R assessments can be extended, but I have no idea how often it occurs to any meaningful extent.

A buyer today would still be wise to not overrate such long-term effects, however. That is, be careful not to put too much stock into the 30-year (or 20-) argument as many homeowners never get there. If instead, it’s honestly your home to die in, then yes, your kids might not be so affected by your currently (outrageous) Mello-Roos.[/quote]

An example of this thinking in North County.

Even though we don’t like the look and feel (and HOAs and Mello-Roos) of new communities, we try to keep an open mind, especially since what we really want is in very short supply.

We checked out a house today that would suit our family beautifully — good-sized house, big yard for the area, yet we could live in it when we’re old, since we’re buying our “toe-tag” house…AND it was priced very well for what it is. It’s a newer house, so it has the MR and HOA. When we added it all up, the MR, HOA, and property taxes alone would have come to around $900/month. No way we want to deal with a payment like that on a paid-off house when we’re retired.

Like you mentioned, MR **might** be paid off in 20-30 years, but there is no guarantee. I’ve also heard about the possibility that they can extend the MR, so we can’t count on a certain, fixed cost when we’re retired. No way we want to take that risk, especially when retirement plans/pensions are in such a precarious situation as they are today.

So…we decided against the house. I’m sure we’re not the only buyers who worry about MR and HOA fees like this.

[CA renter]

[quote=sdcellar]My contention is that they almost certainly would have sold for higher prices.

I should also take this opportunity to correct myself and acknowledge that the one other thing that will negate the impact of significant M-R taxes is time itself. In twenty years or so, they should be paid off and become a non-factor (and this may well occur more quickly than inflation will numb the hit).

I’ve heard anecdotally that the M-R assessments can be extended, but I have no idea how often it occurs to any meaningful extent.

A buyer today would still be wise to not overrate such long-term effects, however. That is, be careful not to put too much stock into the 30-year (or 20-) argument as many homeowners never get there. If instead, it’s honestly your home to die in, then yes, your kids might not be so affected by your currently (outrageous) Mello-Roos.[/quote]

An example of this thinking in North County.

Even though we don’t like the look and feel (and HOAs and Mello-Roos) of new communities, we try to keep an open mind, especially since what we really want is in very short supply.

We checked out a house today that would suit our family beautifully — good-sized house, big yard for the area, yet we could live in it when we’re old, since we’re buying our “toe-tag” house…AND it was priced very well for what it is. It’s a newer house, so it has the MR and HOA. When we added it all up, the MR, HOA, and property taxes alone would have come to around $900/month. No way we want to deal with a payment like that on a paid-off house when we’re retired.

Like you mentioned, MR **might** be paid off in 20-30 years, but there is no guarantee. I’ve also heard about the possibility that they can extend the MR, so we can’t count on a certain, fixed cost when we’re retired. No way we want to take that risk, especially when retirement plans/pensions are in such a precarious situation as they are today.

So…we decided against the house. I’m sure we’re not the only buyers who worry about MR and HOA fees like this.

[CA renter]

[quote=sdcellar]My contention is that they almost certainly would have sold for higher prices.

I should also take this opportunity to correct myself and acknowledge that the one other thing that will negate the impact of significant M-R taxes is time itself. In twenty years or so, they should be paid off and become a non-factor (and this may well occur more quickly than inflation will numb the hit).

I’ve heard anecdotally that the M-R assessments can be extended, but I have no idea how often it occurs to any meaningful extent.

A buyer today would still be wise to not overrate such long-term effects, however. That is, be careful not to put too much stock into the 30-year (or 20-) argument as many homeowners never get there. If instead, it’s honestly your home to die in, then yes, your kids might not be so affected by your currently (outrageous) Mello-Roos.[/quote]

An example of this thinking in North County.

Even though we don’t like the look and feel (and HOAs and Mello-Roos) of new communities, we try to keep an open mind, especially since what we really want is in very short supply.

We checked out a house today that would suit our family beautifully — good-sized house, big yard for the area, yet we could live in it when we’re old, since we’re buying our “toe-tag” house…AND it was priced very well for what it is. It’s a newer house, so it has the MR and HOA. When we added it all up, the MR, HOA, and property taxes alone would have come to around $900/month. No way we want to deal with a payment like that on a paid-off house when we’re retired.

Like you mentioned, MR **might** be paid off in 20-30 years, but there is no guarantee. I’ve also heard about the possibility that they can extend the MR, so we can’t count on a certain, fixed cost when we’re retired. No way we want to take that risk, especially when retirement plans/pensions are in such a precarious situation as they are today.

So…we decided against the house. I’m sure we’re not the only buyers who worry about MR and HOA fees like this.

[Author]

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