Home Buying in Fremont>Question Details

Rockyverma, Home Buyer in Fremont, CA

I have put an offer for a short sale town home in 94536. Listing price is around 342000 and the appraisal have come out to be 350K.

Asked by Rockyverma, Fremont, CA Thu Oct 29, 2009

Townhome is around 1250 sqft and have Parkmont Elementary school. There is a Rail Track behind the house. Home would need some work since certain things seems broken. Since it is Shortsale, it have already waited for long time and I am still waiting for Short Sale approval. Is this a good buy at that price ? This house was sold for 355K and still List Price is 342K. HOA is also 315 which is bit high. My friends told me it won't appreciate since it is selling at same price. The neighbors have bought similar town homes for around 450-500K in peak time (3 years back). I am confused if it is worth waiting or shop around in market to make sure I don't miss Tax Credit from Obama. My budget is 350K and good school district is my criteria. I don't mind going for 400k if I can get Single Family but in that budget in good school district it may not be possible. Please advise- Thanks a lot in advance-

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Carl Medford’s answer
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Rockyverma:

Comment: Townhome is around 1250 sqft and have Parkmont Elementary school. There is a Rail Track behind the house.
A: There is only one development that fits – it’s a very nice, private development nestled in a grove of trees. In fact, it’s one of my favorite developments in all of Fremont and has always had great resale value. Parkmont Elementary school district definitely helps. The railroad tracks are the one drawback, however, there is no whistle location nearby and the trains are not going that fast yet as they go behind. A bigger issue, in my mind, is the industrial area on the other side of the tracks.

Comment: Home would need some work since certain things seems broken.
A: That is pretty standard for short sales. People who can no longer afford their payments do not have the money or heart to maintain their homes. It’s the same with REOs.

Comment: Since it is Shortsale, it have already waited for long time and I am still waiting for Short Sale approval. Is this a good buy at that price ? This house was sold for 355K and still List Price is 342K.
A: The last sale was higher at $365,000.00 in August. If anything, values for homes like that one have increased in the past few months. Wait longer, it will more than likely go up a bit more. I believe we will see a small downward correction in December and January and then a very slow and steady climb through into the summer. In my mind, the bigger issue is whether or not the short sale will succeed. The last numbers I saw give short sales an approximate 20% chance of success.

Comment: HOA is also 315 which is bit high.
A: It’s not that high. All HOAs are under extreme pressure right now to increase prices. There are MANY HOA fees in Fremont quite a bit higher. Here is a post that may help you understand HOA fees:

To Infinity And Beyond: 3 Important Facts to Know About Rising HOA Fees In Alameda County
http://www.trulia.com/blog/carl_medford/2009/06/to_infinity_…

Comment: This house was sold for 355K and still List Price is 342K. My friends told me it won't appreciate since it is selling at same price. The neighbors have bought similar town homes for around 450-500K in peak time (3 years back).
A: I am ALWAYS baffled by those who think that current selling price is somehow linked to the previous sales price. NOT SO. Never has been. Never will be. Current price is determined by the current market. This property last sold for $355,000 in September of 2003. That is a LONG time ago and has absolutely NO relevance to the current market. It’s priced lower than the current comps and that is all that matters.

Comment: I am confused if it is worth waiting or shop around in market to make sure I don't miss Tax Credit from Obama.
A: Don’t buy because you may or may not get a tax credit. I’m amazed at how many people are paying 30-40,000 over asking to get a home so they will qualify for an $8,000.00 credit. The credit is gravy: if you get it, great. If you don’t, focus on getting a good deal on a home so that when the day is done, you’ll be glad you made the choice based on logic, no an emotional response fueled by the tax credit. If it gets extended, great. If it doesn’t, oh well. People have been buying homes for years without the credit and they’ve done just fine.

My budget is 350K and good school district is my criteria. I don't mind going for 400k if I can get Single Family but in that budget in good school district it may not be possible.
A: Won’t happen. Prices at the bottom of the market in good school districts are going up, and, to my knowledge, there is not one single family detached home in all of Fremont that is in a school district like Parkmont AND is also under $400,000.

That’s my two cents.
.
1 vote Thank Flag Link Thu Oct 29, 2009
Rocky:

Thanks for your comments. Trulia is a wonderful platform and there are SO many awesome contributors in this area. Fremont is very blessed to have such a solid core of outstanding Real Estate professionals. I frequently read their posts and catch myself saying, “I wish I’d said that!”

Hats off to all.
.
0 votes Thank Flag Link Thu Oct 29, 2009
Mr. Carl Medford,

I had seen your posts for others and was always impressed with your knowledge and understanding.

You are simply great. You have clarified many doubts in my mind. And what could be better than hearing directly from experts- I am so very much thankful to you for giving time and thought in going over my dumb questions and clarifying things for me.

Thank you again-

Best Regards,
Rocky
0 votes Thank Flag Link Thu Oct 29, 2009
Hi Everyone (Meena, Sunil, Amanda, Steve),

I am really thankful to all the people who replied to my question- directly or indirectly-
Here is my response to some of the questions asked by experts-

1.Yes, I have a buyer agent all along and am pre-approved
2. As per my agent, this is a very god buy. I am not very sure about her opinion generally.
3. She called me this morning and told me there is a good news that 8K tax credit have been extended to Feb 2010. I see different voices about that in this forum-
4. My child won't be going to school now but after 3-4 years. I wanna chose a good school district since that automatically attracts good neighborhood. That is very important for me.
5. From size wise (1290 sq ft) and in current low inventory market, for the price 350K initially we liked the house. Though we were hoping since this is a short sale, appraisal would be going very high and that means Profit for us. We are shocked to see Appraised Price very close to Listing Price..
I would expect Short Sale Price to be much less than Market price. Shall I negotiate it for 320K when short sale is approved by Bank ?
6. Do you guys think because of Rail Track, this property will have problems appreciating ?
7. This house was sold for 355K in 2003 then does it not mean that current List Price of 342K is not a great price for buy since main reason for buying house in this market is it's low all over converting renters like us to Home Owners and enjoy benefits of home ownership ?
8. How can I take a calculated risk that this property is gonna appreciate in next 2 years. Since possibly I might sell it off in 2-5 years and probably go back to India. My whole idea of buying this property is to save rent, build some equity, invest my savings in house which I can call my own (even though it is actually of Bank)
0 votes Thank Flag Link Thu Oct 29, 2009
Dear Shannon,

In case you don’t know, agents are not getting paid for submitting answers on Trulia and they are spending a lot of time answering these questions to help buyers like you and me. Everyone is here to add a lot of value.

I’m a home buyer in Fremont and am currently working with Meena. I personally thought all her answers were great. She has worked very hard in finding me the right home, guiding me through this challenging and complicated process and I’m getting ready to buy from her. If you scroll down, you will see that Meena actually DID answer all of the Rocky’s questions unlike the other agents on this page.

If you can’t help our community, please don’t comment. You did not come up with any helpful information yourself. Let us all be professional whether we are buyers, sellers or agents. That is what Trulia is all about.

Thanks,

James.

PS. I don't know why everyone is making a big deal if the credit extension was signed or not. We all knew it was going to pass.
0 votes Thank Flag Link Thu Oct 29, 2009
Rocky,

the tax credit is close to being extended unfortunately. I say unfortunately, because this credit is creating frenzied behavior. If it went away, some of the buyer's would leave and it would be easier for the well qualified buyers to buy. http://online.wsj.com/article/SB125678511901015147.html?mod=…

You are buying for Parkmont school, please do confirm the school has space for your children. If it is impacted you can expect to have your kids diverted to another school with a lower API score. Parkmont has been impacted for the last couple of years.

LIke the other comments have said, your agent should be helping you evaluate what it'll appraise for based on past and current activity (CMA). In the end however, you have to make a personal call on how much you like the home, since you're the one who'll be living in it, once you know that it's your agent's job to help you buy it at the lowest price possible, but not more than what you think it's worth.

If you think you can get something better right now, then consider backing out, but if the answer is "no", which is what I suspect, than your search is over if the bank approves the purchase price.

I wish you the best.

Cheers,

-sunil

SMA REALTY

Sunil Sethi / Associate Broker, REALTOR, MBA, CPA / SMA Realty
38350 Fremont Blvd. #202 / Fremont, CA 94536
Office 510 793 8600 / Mobile 510 388 2436 / Fax 510 431 9046 sunil@sunilsethi.com
My Bio: http://sunilsethi.com/about_me.htm
My blog: http://fremontrealestate.blogspot.com/
LinkedIn: http://www.linkedin.com/in/fremontrealtor
CA DRE#: 01173766
Web Reference: http://www.sunilsethi.com
0 votes Thank Flag Link Thu Oct 29, 2009
Hi Meena, I hope the extension occurs; however, I think it's "best not to count the chickens until all the eggs have hatched." This is especially true when the eggs are in Washington ;-)

-SteveO
0 votes Thank Flag Link Thu Oct 29, 2009
Ok so if it is NOT SIGNED IT IS NOT DONE. Anything can happen between now and if or when it does get signed. a lot of people give good advice in this forum.... Some do not even answer the questions asked. I would look to to ones who do. Brian, Dawn, Carl, and steve are always very helpful...
0 votes Thank Flag Link Thu Oct 29, 2009
Hi Steve and Rocky,

The tax credit has been extended. Here is the information from our California Association of Realtors website about the extension of Tax credit.

"Washington - Senators agreed Wednesday to extend a popular tax credit for first-time home buyers and to offer a smaller credit to some repeat buyers.

The tax credit provides up to $8,000 to first-time home buyers but is set to expire at the end of November.

Senators agreed to extend the existing tax credit for first-time home buyers while offering a reduced credit of up to $6,500 to repeat buyers who have owned their current homes for at least five years, said Regan Lachapelle, a spokeswoman for Senate Majority Leader Harry Reid (D-Nev.).

The tax credits would be available to buyers who sign purchase agreements by the end of April. They would have until the end of June to close on their new homes, according to a summary of the legislation being circulated among lawmakers.

Senators were still negotiating the expansion of a separate tax credit that lets money-losing businesses get refunds for taxes paid in previous years, providing them with an immediate source of cash.

Senators in both major parties were hoping to add both tax provisions to a bill that would give people running out of unemployment insurance benefits up to 20 more weeks of federal aid. The Senate could vote on the overall bill as early as today, but lawmakers were still haggling over several unrelated amendments Wednesday evening".

So as you can see, the final bill needs to be signed but we know they have agreed to it so it is as good as DONE. They (lawmakers) " were still haggling over several unrelated amendments Wednesday evening".

Meena Gujral
Help-U-Sell Achievers Realty
510-279-9580
0 votes Thank Flag Link Thu Oct 29, 2009
Hi Rockyverma,

Do you have a Buyer's Agent? I ask this because your valuation question is so basic to the transaction it has me wondering. Rather than relying on the opinions of this forum regarding an unidentified property, you really need to be using the "gold standard" of determining pricing trends -- a Comparative Market Analysis (CMA). After all, this is an important financial transaction for you, correct? A CMA always provides the best representation of market price/activity/trend direction - for the specific property details you search on. Your Realtor can provide this for you.

I'm sorry, but the Tax Credit HAS NOT been extended. Negotiations continue, and you can find the latest here:
http://money.cnn.com/2009/10/28/real_estate/homebuyer_credit…

There certainly is pressure coming from the O-administration: Treasury Secretary Tim Geithner and HUD Secretary Shaun Donovan called on Congress to approve three important measures to improve housing and the housing market for Americans: extension of the First Time Homebuyers Tax Credit for a limited period, extension of higher loan limits for home mortgages, and secure funding for the Housing Trust Fund.

Best, Steve
0 votes Thank Flag Link Thu Oct 29, 2009
Hi Rocky Verma,

I hope you have heard that the tax credit has been extended, so don't worry about that for now. If the property has appraised for more than your offer price, that is good since you know that you are paying a fair price for the home. I would be very concerned if it appraised less than my price.

Parkmont is a very good school and a single Family home in that area is practically impossible in the $400K range.

As far as waiting for the short sale, that is really up to you. I have a buyer waiting for a condo in Fremont on a short sale for 4 months now. He still keeps looking at open houses but he knows he is getting a great deal in waiting for the short sale.

If you find something else that is better than this short sale, you can go for it if your waiting time on the short sale addendum is over, or send a cancellation to the listing agent if the time is not over. Hopefully that agent will let you get out since you have not even deposited the check yet. You can certainly try it, but no guarantees on that.

Hope this helps.


Meena Gujral
Help-U-Sell Achievers Realty
40083 Mission Blvd
Fremont, Ca. 94539
510-279-9580
0 votes Thank Flag Link Thu Oct 29, 2009
What does your REALTOR think of the value of the property? Your concern that you want to get a good place at a good price is very common right now... the best thing I can tell you is to trust in a local REALTOR who knows the area and is familiar with the property. It is always a good idea to have your own buyers agent who will look out for your interests.
0 votes Thank Flag Link Thu Oct 29, 2009
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