To buy a home or not....
 

It might be time for me.

I'm looking around and homes are selling for WAY under value right now in my area... I currently have a job and the soon-to-be Mrs. will be getting out of school this December.... I found a house I like, she seems to like it too.... its only 5 mins from my office (BIG SCORE - current commute is 45-60 mins)

They house is in a desirable part of the town - close "The Square" ... where all the restaurants/bars/etc are which is nice... Since I am currently living at home and just saving money for the wedding/house I'm in no real rush... but I found a place.

Could use some improvements but my basically-retired dad is the most handy guy I've ever met, and by best friend who doesn't work in the winter is really handy too - I'm sure they would help with this and that for beer and food....

The place has everything I want on my checklist:
Old home character/charm (not a cookie cutter house)
1600 ft^2 (not including the basement)
4 bed 2 bath (could rent 2 rooms out to my cousins who go to the University in the same city) -
new roof/furnace/appliances -
5 STALL GARAGE!!! AWESOME -
full basement (unfinished)
Basically seems perfect for what I want now... its been on the market for 140 days and is currently listed at only 80k, my guess is a 72k (90% of asking) offer would be taken..... so the mortgage would only be $100 more than I'm spending on gas to/from work... taxes are a stupid cheap $1500 (is first time home buyer tax credit still going?)....

If I ever want out too it is close enough to a University to be a rental.

I looked into insurance, monthly mortgage, taxes, bills.... it would be cheaper than renting a 2bedroom place in the same town.

My question to all of you is this:
If you are 23 years old and can afford it - do you buy a house while the getting is good - or not tie-yourself down?

...Also anyone in the mortage business - do you know what the required/average down payment is these days???
My fiance' insists that we NEED 20% or will NOT get loan...
My dad who has been in real-estate for years said the average person these days pays cash or puts down ~$1500 for every 100k financed.

Which is right?

Thanks!

Minimum down is 5% for conventional loans. Anything over 80% LTV will have mortgage insurance so you can tack that on to your payment as well. You will need money for closing costs and escrow set up, unless you get the sellers to pay it(in this market go for this option). Also have them purchase a home warranty for you.

Rates are low and so are home prices. If you don't see yourself going anywhere in the next few years, you might as well.

thats kind of what I'm thinking... I've got a good job, the two guys ahead of me in the department are getting old (retirement talk a lot) so I'm the logical choice to take their jobs... and since I can afford it no problem, once my fiance' finds income we should be golden.

I figured after I pay for the wedding costs I should have 10-15% down which seemed like plenty (unless mortgage insurance is exepensive enough to warrant saving that extra 5% - or borrowing that 5% from mom/dad)

... do you know if any of the first time buyer incentives are still going?

From what you say I think the main considerations are the security of your job and the opportunity for your wife's employment. Since your wife is still in school, who knows where she will be able to find a job when she gets out. If all her opportunities for employment end up being elsewhere, you need a secure well paying job to make up for that possibility.

IMO
values are still dropping so check the area you are talking about (see value trends on the house on zillow it shows 5 yrs,10yrs)
there are millions of foreclosures still to hit the market in the next few years...those foreclosures, short sales etc are the next bunch of comparable properties(used to get appraised value) so values dropping has not ended yet. my house was "worth" 390K in 06 and today it's "worth" 147K.

There are pockets that buck this trend but it is nationwide generally.

Be careful thinking that they are selling under value...they are selling at their current value... which may drop more. It's no longer worth what it once was.

It is definitely time to buy realestate, but not sure its the right time for a 23yr old who is about to get married to a recent grad to buy a fixer-upper. Seems like you have alot of things changing in the next couple of years and keeping things simple may be the smarter route.

in your position, I think the smartest thing to do is maintain as much flexibility as possible until things normalize. You need to get used to being married. You also do not know where she may find employment or what income to expect.

I dont know that I would be too concerned about getting an old house with character at 23. Old house = problems. The last thing a newlywed couple needs as they create a "home" together is house problems and the big cash hits an older home can spring on you.

My wife wanted a fixer-upper, and I admit the cool factor of a classic home was appealing. Many of our friends did it. However, every time one of them drops a fortune on a roof, or A/C, or, electrical, or plumbing, or replacing bad wood, she thanks me for insisting we build a new boring home. We really began to notice how many of those friends had to regularly bail on various activities because they had to attend to a house crisis.

Damn...i need to move to whatever state ur in. 90k will buy a 2/1 ****hole smaller than my master bdrm.

Save ur money and dont get married...buy the house, kick her to the curb and have one sweet hangout place for u and ur buddies.

Jk lol

Kids r growing up these days...at 23 I was still playing Van Wilder n college and just started my first career. I divorced my ex after we bought cars & built a house bc she wasnt ready to growup...I was 30 and she was 26.

I'm 24 and just bought a house. I just got married in May and closed on the house in July. My wife and I have both been at our jobs for about a year and half and we feel relatively stable in our jobs (you never know in this economy though). We were able to get a conventional loan with 5% down without mortgage insurance (PMI). We had to add about half a point on our interest rate to accomplish this, but the added interest is much less than PMI.

Biggest factors for getting a loan:
1. Income
2. Credit
3. Down Payment/Savings
4. Debt

Some rules of thumb for how much loan you can get.
1. Mortgage payment, including principal, interest, taxes and insurance (PITI) should be no more than 28% of your gross monthly income.
2. Mortgage payment including PITI plus all other debts should be no more than 36% of your gross monthly income.

Take this from someone who works in both residential and commercial real estate every single day and has done so for the last fifteen years...

All types of real estate are still in a downward spiral and will continue to be until we get a new president. I'm not going to go in to the reasons for this, but all types will continue to fall.

Few resources are directly available for data in Wisconsin, but resources do exist for data. You can use Zillow and all the regular sites, but also look at regional data; like the Case-Schiller Index for nearby municipalities.

S&P Case-Schiller Home Sales Data

Most Multiple Listing Services also publish local data free to the public.

All the large banks have a huge inventory of foreclosed houses, houses going into foreclosure, and houses that they could foreclose on but haven't yet. Banks don't have to declare a loss on their books until they actually realize the loss (sell the foreclosed property). For example, if in 2005 they made a loan on a house valued at $500K for $450K and the borrowers stop paying the bank hasn't lost any money. If they foreclose on it and it's now worth $200K and sell it they would lose $250K plus the fees to sell it, etc... If instead they let the borrowers continue to live in the house and not foreclose, they haven't lost anything, at least according the books. They can keep pushing the loss forward by not foreclosing on and selling the house. Many, many banks are doing this.

Depending on how the debt is held by the banks, they may or may not have to report Mark-to-Market accounting, but not all debt has to be reported this way. Since the bank also doesn't have title in a trust deed state, it doesn't show up at all, until its disposition. Wisconsin is a Mortgage State though so you will have less hidden asset reporting, but a much, much longer hold period.

Furthermore, more and more homeowners will continue to lose their jobs and go in to some type of foreclosure process, either now or later on down the line, it is almost impossible for someone to catch up on their house payment once behind. In commercial they do "cramdowns" or principal reductions, but so far we see very few of these on residential properties unless it was on a jumbo loan. My office probably does three or four "cramdown" appraisals a week for commercial properties.

Finally, almost every new government regulation is going to hurt real estate in one way or another.

In summary real estate prices will continue to fall over-all until we get a new president.

A new house can be just as bad as an old house. I make a really good living doing almost exclusively construction defect appraisals. Many newer houses are built very cheap. Many of the old house, specially in the mid-west, have already been through the ringer and have been improved on, remodeled, etc... a lot of the things that can wrong already have, and have been fixed.

IMO, one of the really good things about buying a house when you are young is the fact that it can add great stability to your life. It can ground you and set you up for a great future. I bought my first four-plex when I was 21 and lived in one of the units for six years before I could afford to move. I paid it off when I turned 36 and had a great credit score and an income stream. A house can also make you grow-up fast. It can also kill your future if you are not responsible.

I completely understand about her finding a job... its a catch-22 for our situation...

I feel confident at my job, we're adding a whole new software package for SPC, and I am the only one at this point who can do anything on it besides basic data entry.... they're screwed without me. I also feel I can get a job just about anywhere... I had offers lined up before I graduated... now add a year of experience and certifications to my name it should be even better.
... her situation isn't so bright
She will have a Comm/PR degree (Mrs. degree - she went to school to be a wife).... even if she gets a job somewhere else, her salary probably won't warrant my leaving... I could wait a year or two and most likely get her yearly pay in a promotion. If should couldn't find something I would prefer her to get a whatever job at Home Depot just for the discount.... she probably wouldn't do that though.

I wouldn't mind building either - my dad has built his last 3 homes baiscally by himself... then I could get exactly what I want... but it would be a bit more costly.



Bottom line is a REFUSE to pay rent... its just stupid with rates/prices these days, and am fairly certain the fiance' doesn't want to live at home with my mom forever.

Someone once told me...

"The graveyards are full of indispensable men." - Charles De Gaulle

everyone should think about that from time to time...

Haha, thanks for the bode of confidence .... I'm pretty set for a while at least... company wide change over, our plant is first and I am the godfather of the project.... maybe in 4/5 years when its all done I'll be sent away, but until then... they'll chase their tails without me.

"and will continue to be until we get a new president."

You make that sound like an easy fix!

I will pretty much bet that as soon as it is evident that Obama will lose re-election the markets will improve immediately.

The Obama administration and it's policies are more anti-business than any administration in history. The markets have no confidence in him what-so-ever. The business world is afraid of Obama and his policies, including the what he has done with healthcare, EPA, DHS, DOJ, and almost every other bureaucracy that he controls. His replacement will immediately improve things. It won't "fix" things, but it will be the first step.... It will be very hard to beat him though, he is implementing everything that Roosevelt did to win re-election.

Obama is going to buy the election through the use of tax-payer bail-out money. Almost all of the stimulus act spending happens approximately one year prior to the election. He is going to follow the Roosevelt plan to the letter.

I say go for it. My wife and I bought our first (current) home in 2009. I was 24 she was 21. We love owning our own place! Did the apartment living in college and our first 2 years of marriage and it was no fun. We love having a yard, not hearing neighbors toilets flush, having a garage, etc...Home ownership was a dream of ours and we love it.

Just bought a couple months ago, loving it as well. You sound very excited about that place, so I'd really consider it, but make sure you look around and compare, you'll notice what you didn't realize you like/dislike. Anything less than 20% down requires mortgage insurance, and most will take 7.5-10% no problem, especially with your job situation. This was my experience at least, may be different there/now. Think it over, and go look at other houses in the area, as well as a totally different area just for a better idea, then you'll know if it's what you really want to do.

I've owned now for about 3 years, bought when I was 28. Since I bought the house I have rented two of the four bedrooms out to people I have known which has paid for about 50% of the mortgage which has been great. I'm getting married in a year, so that will have to stop, but it's been great. Not sure when you are getting married, but would assume your future wife won't appreciate your cousins living with you once you are married.

One thing I would recommend would be to look around. I looked around about 2.5 years before buying. I decided in the end I wanted to buy a new home. They are "cookie cutter" but the warranty that covered pretty much everything for the first 2 years was great. There is also a million different upgrades you can add to make it your own. I jumped in at a lot higher price point than you are looking at. I probably would have pulled the trigger a lot faster if my mortgage would have been less than $100,000. I agree with A-Dub, look around. Even though we picked the house we loved after a long search, my fiance and I already have quite a list for the next house that we will build.

Being that you have a solid job, I would buy something you can comfortably afford without having to worry about her salary. Jobs are very hard to come by. My fiance has been looking for over a year with a Business Management degree and hasn't had a lot of luck. Luckily she has a very high paying part time gig that helps, but I wouldn't want to have to rely on someone finding a job in this economic climate to pay the bills.

Looks like you are already preparing yourself for most of the expenses that come along. You tax rate looks pretty good, I would love to have that tax bill as well! Before buying a house, I had always lived with roommates and split the utilities 3-4 ways. That was a wake up call the first couple months. I probably spend about $800-1000 a month on utilities (cable, internet, power, water, sewer, trash, alarm, etc.) which is something a lot of people don't think about.

Oh, and I didn't see anyone answer your question, so sorry if someone did, but I think every New Buyer credit expired in June of 2010. We took advantage of that which was nice. As of 1/2012, I will be free and clear from ever paying it back.

and stuff will go wrong, and there's no landlord to call and place the burden on. Plumbers, electricians, they aren't always timely either.

You'll likely learn this or already know, but research and have a highly recommended Inspector, and line it up as soon as any opt out period starts. It's an upfront cost that can then be worked into the closing costs, and will tell you so much about the house you had no idea about, and somewhat make you check yourself on the decision.

Since my dad has been in real estate for years I'm just going to use him and his contacts if/when the time comes.
... my biggest draw is between the money I have in the bank (even though the wedding will kill a good chunk of it off) I can realistically have the house paid off in 5 years without her income... assuming she gets a job we should be able to put 100% of income to the house....even still lets say 5 years the house is paid for and where it is located it could be a rental unit (close to a campus) someday if/when we would move... even though renting to college kids seems like a nightmare.

Monday I'm set up to look at 5 different properties ranging from a cheap cheap 55k up to a few pushing 200k. If I was to go over 150k though I would just buy my mother's house off of her which is lakefront and suck it up with the commute.

We'll see what happeneds and most importantly what the Mrs. thinks.... because odds are thats the end-all of this who process.

First time homebuyer money is still out there, but it is typically state funded at this point. We just had an extension on it here.

I am assuming your girlfriends job hunt is of no consequense on your ability to service the debt? Also, how much money are you looking at spending? A 100K home is a lot different than a 400K home. Others are right that prices are still slumping, but thats not to say deals are not out there. Do look for foreclosures and shortsales(although shortsales can be a major pain if you are dealing with large banks).

I disagree with the look for foreclosures and short sales. i did that, and it was a waste of time. Granted I was on a timeline, however, you find yourself convincing yourself to go into a house that you'd rather not, just because it's a "good deal". Then you pass up on the perfect set up just because it wasn't being foreclosed on. And the people in foreclosure straight don't care for their houses. Seen it first hand.

I say if you can afford it and the bills that go along with it go for it. As you say, paying rent is giving your money to someone else instead of investing in yourself. I bought my house when I was 25 and I bought when the real estate market just started getting crazy here in BC, Canada. My 1970's 2000 sqft house was $ 260k. I could probably sell it for just under $ 400k today which is absolutely stupid. Seeing people talk about houses so cheap just makes me shake my head. No wonder so many people can have the house, boat, and cars at a young age.... I understand not all parts of the US are like this though. The way the market is going it may be worth holding out a bit more or if you can find a good deal then move on it. Good Luck!

Adub has a very good point.

We built our house in 2008 and I was 24 at the time. Planned a wedding the same year so that kept my Mrs. busy while the house kept me busy. I am fortunate enough to have an Uncle who is a general contractor on the side so I was at 68% LTV the day I got the CO. I just had my house reappraised for a refi and even in our bad economy the value had increased another 10K.

Adub is dead on about foreclosures. I also believe renting is throwing money away if your living somewhere you plan to stay for awhile. If it's the right house for you and your future wife, doesn't need a ton of work to get it to your liking, your getting a good price and rate then I say for go it.

As for the First Time Homebuyers credit it is still going on but be careful. Congress f*cked the estimating back when it came about and now their restructuring everything due to lack of funds to pay. I actually got a letter saying I owed the money back because they are desperate. It was a mistake on their part of course but nobody wants a bill in the mail for 8K plus interest that you didn't even know about. I spent days on the phone with the IRS and finally got it sorted out.

The one I am leaning towards is currently at 79,9x.... the agent says its vacant buy the sellers want it moved. I figured based on other selling prices getting it for 75k and selling pays closing costs isn't a stretch.

75k - my down payment today would put me right about at 65k loan. 65k for 40 years @ 4.5% puts me at only $330/mo. + $125 taxes + $50/mo. for insurance = $505/mo.
Figure $100 electric/heat + $80 direct tv + $40 internet + $30 water
My total monthly home bills are: $755 and I have 3 extra bedrooms rentable until I am married. Figure my two cousin who go to the university there each pay $200 a room (lot cheaper than anywhere else in town, and I'm only 3 blocks away) and split bills that covers my mortgage.
So for the next two years (wedding date) I could dump approx. $2400/mo. towards my loan = which means I'm about 88% paid off. We get married and have the house paid off within another year/two.

The idea of owning a home and having no house payment at by the time I'm 25/26 would be pretty awesome... I can afford much more than this place, but would rather not be house-poor.
It hits all the things on my rather small checklist -
Has come charm/character - not cookie cutter
Big Garage / lots of space
Full-size basement for home theater
@ least 2 bathrooms
modern enough ktichen
large closet (so I don't have to fight for space with the Mrs.)


.. after looking at the place there a few small "projects" that I think will add a lot of value such as:
Finish the basement (only partially finished as of now) - I can do myself
Re-side the house (boring white above brick areas)
Blow out wall between two upstairs bedroom and "bonus" room to make a nice sized master sweet. - I can do myself

... all easy enough and should really help add value to the home for a future rental/sale opportunity

"65k for 40 years"

This makes no sense. 15 year mortgage here. If you have the money to pay the house off in 4-5 years then why would you opt for loan with 25 more years and at least 1 % more in APR. Hell I'd go 10 year if possible.

the mortage calculator I had didn't give me a 15 year option... just ran with 30 year numbers.

Just ran them on one with taxes/insurance/ and 15 year would certainly be fine too.

Agree with Aaron. You need a 10 year mortgage @ 3.5%. Monthly payment would be $642. If you can throw another $1800 a month at it for the next 2 years you'll have it payed off.

If you can pay for it in 5 to 10 years and think it will be a rental if you want to move it is a no brainer.
Go get approved and write an offer.

If it has been on the market that long don't be afraid to offer them way less. You never know what their situation is.

I have bought 2 rental houses in the last 4 months in a town where no real estate seems to be moving. I bought both of them for less than 75% of asking price. One of them the kids were selling for the dying mother and just wanted it sold and the other the guy owed an insane amount in back taxes so I am assuming that his finances were in bad shape.

prices may continue to go down but you may never see these intrest rates again in your lifetime... 4% 30 yr fixed 3.75 15 yr fixed.... $80 K house is like a car payment. Financing on my first house...had to go adjustable, couldnt qualify for fixed rate...11.5% adjustable and that was $120K house in 1986.

Nick, I want your electric provider that you are estimating $100/month for a 3+ bedroom house. What is the square footage? I'm at 3,600 and when I am extremely lucky in the spring and fall and never use heat/air, I get to about $130, that is with all energy saving bulbs and I use a programmable thermostat. I average probably about $250-275 for the year. I don't even remember averaging $100/month in my apartments in college.

If this deal goes through, I want to see some pics of the house. For $70k in my area, you would be living in a complete dump! I think I need to move to Wisco...

Good luck on the purchase if you go for it, I don't think you will regret it one bit.

@Nick, if you think WI sounds cheap to live, you should check out South Bend, IN (home of Notre Dame) and see how cheap our real estate is here. It's actually pathetic when you think about it.

There are towns out there where it is scary.... My old roomie would always go hunting somewhere in South Dakota, they would always rent a "hunting shack" ... one year there they saw a new construction house for sale - his dad bought it on a credit card for $2600. The town had to big companies that employed 90% of the people who lived there - both shut down and the town died.... and they bought a house on a credit card.

Added another to the looking at list for this week.

... its a short sale which could be good/bad, and is already at a great price. This place is one bedroom smaller, and has less garage space which isn't the end of the world and is priced at an asking price of only 65k. With the short sale I don't know how flexible that would be. I'll be taking a look at it this week to see how the roof/pluming/heat/ac/electric looks. Assuming its all good or equal to the other place, an extra 20k to improvements sure wouldn't hurt.

... On another note - if I do a 15 year mortgage @ lets say 3.75% ... would it make sense to just throw my ~14k of school loans on there? I think they are a 6.XX% at the moment.... then only have to deal with writing one check a month.

Thanks!

Short sales can be a pain. Especially if you are dealing with a big bank. I closed one a while back for a guy. He put an offer in at full asking price and it took BOA 6 months to even respond to him.

You won't be able to throw in your student loans on a purchase.

Thank you for the response.
I figured it wouldn't be that easy to combine payments - just figured if I could shave off 2%, might as well try.

I have am looking at two properties today with the same agent that has the short-sale, hopefully they can shed some light on the lender and/or they have experience with the situation.

If its a small bank, then it may be no big deal. Make sure if you put in an offer, it has an expiration date on it.

Aren't there new laws in place regarding short sales? I just went through one, and it took a few months. I don't remember the details, but my realtor mentioned something in place that now required lenders to reply or process part of it within a certain time frame. She said things were definitely much better now, and mine went fairly smooth.

You are correct brett. April 5th is when the new rules came into effect. They now have 10 days to respond. I wish it would have taken place back in Feb though!

Just got back from looking at two places equally priced.... neither wow'd me, neither was a total bust.

1. bigger over all house but made of many small rooms - Ideal for a future rental

2. exterior was a turn off (easy fix) and only had one garage stall, nice nice interior and very close to campus but only 2 bedrooms and 1 smal bath. Basement only had 6' ceiling which is a turn off too.
..... after today if I wrote an offer they would both get low balls.

I have 4/5 more scheduled for Friday (short sale included) so we'll see what happens

Im in SoCal....almost no bank responds in 10 days...30 if you are lucky more than likely at least 45 and its usually a counter at higher price. Banks want to sell these homes at appraised value but why would a buyer buy a short sale, be in limbo and wait months to pay fair market value? I avoid short sales as much as possible and am still doing 3 right now. If you can, look at standard sales or REO's.

I still can't get over the fact at you can purchase something in 2011 for 80k that is in liveable condition. Can you post a picture?

I'm mroe in line with Jason...I wouldn't' do it. buying a home and getting married.....alot of stress at that age.

So true lol

I could buy an apt that was converted into a condo for that but thats it around here.

Here are my front runners -

79k asking
Pros: Large - Lots of bedrooms (future rental) - 5 stall garage - full basement - great location - roof/electical/plumbing updates
Cons: siding - no central air - a few weird rooms that have no purpose - 2 bathrooms on 1st floor
http://www.redata.com/100001/mls/sti.../1105324ax.jpg
http://www.redata.com/100001/mls/sti.../1105324dx.jpg
http://www.redata.com/100001/mls/sti.../1105324ex.jpg
http://www.redata.com/100001/mls/sti.../1105324lx.jpg


67k asking
Pros: Cheap - Interior isn't bad - Good location to become a rental - New windows/roof/electrical
Cons: Needs siding - 1 stall garage (not much room to build another)
http://www.redata.com/100001/firstwe.../1103455ax.jpg
http://www.redata.com/100001/firstwe.../1103455ex.jpg
http://www.redata.com/100001/firstwe.../1103455fx.jpg
http://www.redata.com/100001/firstwe.../1103455gx.jpg


85k asking
Pros: Nicer kitchen than others - nice master (no bathroom on upper level though) - 2 stall garage -
Cons: Outside = blah - no bathroom on same floor as master - lots of plants/mowing/yard maintenance
http://www.redata.com/100001/mls/sti.../1105137ax.jpg
http://www.redata.com/100001/mls/sti.../1105137gx.jpg
http://www.redata.com/100001/mls/sti.../1105137ix.jpg
http://www.redata.com/100001/mls/sti.../1105137bx.jpg

Last but not least - the wild card -
125k asking - bit more than the others but I like the look/feel of it
Pros: Bigger - old charm/character -
Cons: Grandma lived there so everything is effin ugly - larger yard than I would like - 1 stall garage (room for more though) -
*parking lot on left of picture is for a campus building - close close to campus*
http://www.redata.com/100001/mls/sti.../1007114ax.jpg
http://www.redata.com/100001/mls/sti.../1007114fx.jpg
http://www.redata.com/100001/mls/sti.../1007114lx.jpg
http://www.redata.com/100001/mls/sti.../1007114bx.jpg



These are sort of the "front runners". I did speak with the bank and it sounds like given my current situation and income I would have no problem getting the loan - so thats a relief. Although my bank guy did mention that he would advice against buying a house at my age unless it was a no-brainer steal (which he said are certainly out there).... but he thinks I'll be kicking myself in 3-5 years for planting my feet so early in my life/career... which could be the case... but I look at the rental possibilities in-case I do have to move.

... but there are certainly living condition ready houses around here for <80k

Think heating and cooling costs on that big one. Plus the fact it has a parking lot next to it which will hurt resale.

Nick,
All those houses are old which would lend to lack of insulation and efficiency. What type of heat source are in those in your area? In KY houses that old would have no insulation in the walls at all. My last house was old like that and had no insulation but new gas forced air central heat. My bills got as high as 350 a month in the very cold months and I would say it is deff colder in Wisconsin. you may want to consider checking into that and price having the walls insulated before you make an offer. Also something else to consider is the possibility of lead paint in the older homes if you are going to rent. Should not be an issue but they did have a lot of rule changes as far as remodeling rules for lead removal and abatement.

Looked at 5 more places last night and may have found two potential winners - with that said .... I've got some questions regarding asking price, fair market value, and assessment value.
Sort of have it narrowed down to two that both her and I think would be nice houses - could spend many years in if needed.

House A: Oldest house - but in AMAZING condition. Plumping looks to be mostly PVC, electrical all looks updated, roof is very new, central air, forced are heat - furnace looks quite new, all appliances in good shape, wood floors are nearly perfect (old lady have carpet laid over most of it) - looks well insulated. For being old it really looks like its in great shape (inspection would confirm). Much bigger and nicer bathrooms than the other places. Really cool 2nd story back deck area. 3rd floor is this amazing old room - not finished but could be an awesome hangout and/or another bedroom.
Other + factors: Kitty-corner to a Catholic Church (the Mrs. sings at them for extra money a lot of the time), close to schools (university included -14 min walk to middle campus), close to "the square" which is the old downtown with food/bars/shopping. One side is church parking lot (no neighbors and only busy 1 day a week), one side is a well taken care of empty lot owned by a photo studio (used for photos shoots), and behind is a small park.
It has been on the market for 316 days (either they're holding out for the right price, or are getting desperate since it has been sitting so long) * one 5k price drop over the 316 days *
Assessment Value: Land - $11000 Improvements - $76200 -- Total = $ 87200
Estimated Fair Market Value: $96800
*Excuse the old lady look of the place -- I think it would have sold except the insane amount of creepy dolls all over the place**
http://photos1.zillow.com/p_d/IS8mo4jcke6vfn.jpg
*Carpet shown is just laid over these beautiful hardwood floors - most of the carpet is out now that it is sitting empty*
http://photos3.zillow.com/p_d/IS8mhtqmq8wxpf.jpg
http://photos2.zillow.com/p_d/IS8mhtqis6otr7.jpg
http://photos1.zillow.com/p_d/IS8mhtqqob51nn.jpg


House B: Old (but not as old) - smaller (cheaper to heat/cool), good electrical/furnace/plumbing/roof. Looks like it is very well insulated. Tiny bathrooms. 2nd/3rd bedroom are small, master is really really big. Basement is partially finished. Tight with neighbors around and looks a like a lot more "student housing", so the houses are a bit rag-tag around it. Really nice sun-room area with wood buring stove.
Asking 115k
On the market for: 161 days (it was on the market for a few months in 2010' as well - about the same price)
Assement Value: Land $9700 - Improvements - $72200 ---- Total = $81,900
Estimated Fair Market Value: 91000
http://photos2.zillow.com/p_d/ISajc5051hd5lv.jpg
http://photos2.zillow.com/p_d/IS1juv3ewsa7f6r.jpg
http://photos2.zillow.com/p_d/ISe7u48xtyi8pv.jpg



Given the asking/fair market/assessments - both have been sitting for quite some time - both are priced above values (maybe added improvements since last assessment) .... does this information give me some leverage on a low ball offer?

I really like, and the Mrs. really LOVES the one for 134k -- but thats a bit more than I wanted to spend considering my age. With that said the house could certainly be more than a "starter" home with its size and how nice it is inside (move in ready - ZERO improvements needed).... I could also justify it just because the way mortgage rates are at the moment.... stupid cheap. I would be certainly willing to pay its estimated "fair market" price, but looking at the fair market/assessment it seems 134k is a bit much.

any thoughts or opinions?!
Thanks again for all the help!

Nick,
Ask the sellers to provide you with copies or at least real number on utilities on those houses. Looks like both have original wood windows. The white one has a lot of windows that if are original will be very inefficient. If you can't see inside the wall, attic, or under a floor then you have now way to tell the level of insulation in the house. You say they seem to be well insulated but how did you tell? Most attic floors will be insulated to keep heat from going up but on a house that old around me there would be none in walls unless someone had it sprayed in later. Ask the homeowners if they have had it done or know if it was done. Of Course highly efficient windows won't really do you much good without insulation in the walls. You could use the lack of new windows as a bargaining tool considering both those houses look like they have quit a few windows. The whit one has large windows too and the replacements would be expensive.

Both have newer "plastic" windows -- The white house has those little triangle windows on the very very top floor - those are still old and original (sealed around very very well though).... the brown one had older looking windows on a 3-seasons/sunroom (rest looked new) - I expect they didn't plan on heating/using that area in the winter ever.

As far as checking out insulation - I dug pretty hard my answer.
Both I got into the attic and they looked very well isulated... between floor and attic + ceiling to roof
The white house I was able to get into a back hidden closet/storage/crawspace type deal that gave me a good view of the "inside" of the walls - loaded with foam insulation... looked like it was all done within the last 10 years.

The Brown house had less to see - but based off the attic and looking down to an area above a closet on the 2nd floor it seem pretty well stocked with insulation.

I think I am going to try and see the place again tonight with my dad (has build all of the houses he has lived in and been in real estate for 25+ years) ... him saying no-go would be an instant deal breaker.

I'm trying my best not to just see the good in the house, but honestly the White House had only minor issues (mostly cosmetic).... the things I didn't like:
Wallpaper in most of the rooms - old lady
1 stall garage (lots of room for another though)
Felt "too nice" for me - could be the old lady vibe though
Yard is more thatn I would like to mow - but no flowers, so thats a plus.

Which one was 134K? I thought the big one was 125K. If you are getting your info from the county appraisal, those can often times be low(obviously depending on location). It never hurts to throw in a low ball offer, especially if the home has been on the market for a year. They will counter, so starting low is the best way to get a feel for the buyer. If they are asking 125K, throw out a bid of 96K and see what happens. It sounds like you have your mind made up. That old house is really pretty kick ass.

I was okay with about 5 different ones - but the Mrs. said that IS the one... and her vote counts for like 10 votes. I typo'd above - its asking 134k.

It is pretty awesome. Just all the neat "old" style things they left while updating I love. Milk man door thing is still there (just has rubber seals and latches for insulation purposes), door bell rings by someone spinning a knob that actually hits a bell, the big old wooded staircases, its just really neat and nothing like I've ever lived in before. All the things I find that are "cons" are simple cheap fixes though - paint/wallpaper/etc etc. Hopefully I'll be able to get my dad there today or early next week -- and the guy I've been working with (not the listing agent) is looking into getting me recent bills, why its priced as it is, and doing some market analysis on it for me.

Yes - that is where I pulled the info from.


thanks for this inputs!

I'm still trying to not go blind to its flaws despite all the things I like.

Good luck, still blows my mind on house prices in your area.

Oh and...womens votes always outweigh ours, at least in their minds:)

Yeah. Sounds like you both really like it. It obviously isn't selling at the 134K, so I would start well south of there. I would say if you can get it in the 110-115 range you should be good to go. Subject to the appraisal coming in at that of course.

Yeah its a pretty cheap part of the country... I blame the winters.

Good to know I'm not crazy for thinking of offering waaay less than asking.
... another appt. tonight to take a look at it with my dad and a family friend who deals with a lot of rentals (he is a master of codes/inspections)

Nothing feels better than a lowball.

Good luck!

The market may stil be dropping, but I think (fvck, I hope) it's near bottom. Just moved to WA and things are actually starting back on an upswing here. Hope it continues.
2nd the comments about foreclosures/shortsales. Only worth it if you happen to find "the house" you want and are willing to typically put up with ALOT more bs to purchase a short sale and typ more problems with a foreclousure. We just bought a prev forclosure that the seller flipped. It was "the house" for us. Big house, right location (in the woods), 5ac, hunting in the backyard, 9 bays of garage/shop + other outbuildings, gated neighborhood but no stupid covenants, etc.
I have ALOT of small projects, more than a non forclosure for sure.
Given the interest rates and your position in life, I'd say it's the absolute best time for you to buy a house. Of course I'd go for the one with the 5 car garage though!

Side note, you know anyone who is looking for a nice newer big log sided chalet on a small almost private lake with no boating restrictions and good muskie fishing up in Park Falls, WI, let me know. I got one that I built for my parents 10 yrs ago that I may need to sell soon.

Do you have any photos - my mom and her boyfriend are looking to move north of where we currently are in Wisco... he loves fishing/hunting/boating ... my mom just wants to get out of her house - my brother is in college now and I'm old enough to be on my own so she doesn't need a 5 bed 3 bath on the water - plus her taxes are like 7k which she would like to drop.

The Park Falls home - do you know if it has any land nearby for purchase, taxes, beds/baths?

Update on the 130 year old house.

I went with my dad (really handy) and his good friend (Riley) who makes a living flipping houes (been doing it for 40+ years - reallly handy).

If you remember the house asking was 134k - fairmarket was 95k and assessment was at 85k.... my dad says he wouldn't pay a dime over 40k for the house and Riley said that even with 40 years of flipping stuff, he would NEVER touch the house. Too old, too many "easy" fixes made extremely complicated by its age.

He also knows the area extremely well and said that the location is a nightmare and with the driveway, he said was willing to the entire mortgage on the line that one of us WOULD be hit getting in/out of the driving within 5 years.

.... so that house is out. I trust both of them to know what they're talking about.... it was really neat, but not the headaches that they both think would come with it.


the search continues - I have a few more next week I plan to look at (two aren't pictured online yet)
*Looking at another one a second time with my dad.
http://photos2.zillow.com/p_d/ISajc5051hd5lv.jpg

*A new to the market one (best I've seen yet for future rental)
109k - fugly outside color (Mrs. likes it though) - 4 bed / 2 bath (good rental option) - basement roughed in for completion (great plus for me - just insulate and drywall and could add a bedroom) - good sized kitchen - room for 2 stall garage
http://www.redata.com/100001/mls/sti.../1007839ax.jpg
http://www.redata.com/100001/mls/sti.../1007839bx.jpg
http://www.redata.com/100001/mls/sti.../1007839gx.jpg
http://www.redata.com/100001/mls/sti.../1007839jx.jpg

Here's a couple pics. Excuse the mess. I inherited a random old person/hoarder!

I pm'd you.