Home Buying in Camarillo>Question Details

Franci, Home Buyer in Camarillo, CA

I have 400,000 to buy a house with. How much can I spend on the house since I'll have to figure closing?

Asked by Franci, Camarillo, CA Thu Oct 16, 2008

costs? Do you think 15,000 should cover these extras? (basically am I looking at a 385,000 budget or less?) Also, why do you say that you make money when you buy and not so much when you sell?

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Hi Franci,

I appreciate you turning to the Trulia experts to help answer your prudent questions and get a grip on today's uncertain market. Yes, we are currently in a declining market. The trend is towards a further reduction in the median Home Price in Camarillo, which was $440K as of September, with a seasonally brisk 78 home sales in the city. There is talk amongst those in the know that Option-ARM mortgages will continue to reset through the year 2012. So, in the event you decide to stay on the sidelines and wait out the market, you stand a greater chance of paying less for your investment property, and with it, lower property taxes. Net to you is more cash flow (rental income) from the outset and more appreciation in the years to come.

A seasoned investor is not in a hurry. An investor does not become emotionally involved with a particular property. For an experienced investor, like myself, it's a numbers game. Where can you get garner the highest ROI (Return on Investment), based on your degree of risk. Send me an email and I'll ship you a complimentary copy of a wonderful book on real estate investing. Happy retirement!!
1 vote Thank Flag Link Tue Oct 21, 2008
Why don't you just f-ing directly answer his question? Wasting audiences' time!
Flag Wed Dec 9, 2015
If you purchase a home for 400,000 the closing costs can be approximately 3%. You will also need 3% good faith deposit plus your down payment which varies depending upon the type of loan you get.
So 3% of 400,00 is 12,000.00

Best of Luck to you!
2 votes Thank Flag Link Fri May 29, 2009
Franci,

This depends on if you are getting FHA financing. There is a MIP (mortgage insurance premium) that generally runs up the loans costs. on a loan 5% down FHA loan in your range that MIP fee could be near $6500.00. That would leave $9,000 for escrow, title, Appraisal and the lender's fee which should be plenty. If you are already working with a lender then they should have given you a estimated cost sheet. Dont forget that you will need another $400 (approx) for a home inspection.

Good news is that you can now apply the $8,000 tax credit to your loan costs at Escrow. You can also see if the seller will give a credit toward the costs.

Either way if you go FHA with 3.5% or 5% down you still need to show that you have the down payment amount in your bank, the tax credit or seller's concessions cannot be used for down payment money.
Web Reference: http://www.Homebuysblog.com
0 votes Thank Flag Link Sat May 30, 2009
Hi Franci,

Here's answer to your question: "Also, why do you say that you make money when you buy and not so much when you sell?"

Let look closer at a sale. One has to assume that the market as a whole is well informed and has professional assistance in form of real estate professionals. The best deals in the market tend to sell first and overpriced offerings will not sell until the market has moved up. A seller therefore can expect to obtain market value for his property. It is very unlikely that by some fluke he will stumble upon a buyer willing to overpay for a property.

Now lets have a closer look at the buying process. When buying you are negotiating with one individual, the seller. He might or might not be completely informed about the market value of his property. The seller might be facing special circumstances that might make him more motivated to sell at a below market value. You might be in a position to close quickly and therefore a motivated seller might be willing to come down on his price. When buying property you are competing with the market for a property but you can always beat the market by being first to learn about a new listing or keen at identifying a motivated seller.

It is during the buying process that you can find the pearls amongst the plethora of offerings. Make lots of offers on property where you see potential. Find the seller that is most motivated. Do not get hung up on a particular property just because you have fallen in love with it. Once you found the person and the property that meet all your criteria negotiate hard and make the deal happen.

It is at the time of buying when you set yourself up for future profits. But the profit potential that you control is 100% related to your buying decision. Not only in terms of the price you paid but also in regards to all other variable factors like location, desirability of structure, condition of the dwelling, rental potential and so on.

So when "buying" your next (investment) property keep in mind that it is the key to your success. Selling just represents the completion of a wise buying decision. You can expect to sell a property at market rates, but you can find and buy property at below market rates, to realize a true profit.
0 votes Thank Flag Link Fri May 29, 2009
And here comes this mother fker again. Jesus Christ for fck sake!!
Flag Wed Dec 9, 2015
Franci,

Agreed, the general rule of thumb......plan on approximately 3% of the selling price.

Happy house hunting..........

The "Eckler Team"
0 votes Thank Flag Link Thu Oct 23, 2008
$15,000 will be more than enough to cover closings costs...especially since it sounds like you won't be getting a loan (no loan broker fees, points, etc...you won't even need an appraisal is you are sure you are paying fair market value.)
0 votes Thank Flag Link Wed Oct 22, 2008
Franci,

Quick and simple. Budget 3% of the sales price and you should be fine for closing costs.
0 votes Thank Flag Link Tue Oct 21, 2008
Does this include the government transfer fees?
Flag Tue Jun 9, 2015
Franci,

Are you getting a Loan? or are you buying all cash? Plan on $400 for an inspection, $400 for an appraisal. If you need other inspections like running a camera down the sewer that will be another $350. You will pay your side of the escrow fee approx. $1,050. Then you have loan costs if you get a loan which will include the lender's Title policy fee. $15,000 is WAY TOO HIGH for your purchase amount with a loan.

Wishing You All the Best,
Ted Mackel
Web Reference: http://www.homebuysblog.com
0 votes Thank Flag Link Thu Oct 16, 2008
All businesses understand one fundamental. Cut costs, realize profits. Many times there are already profits built into a product at its current price. The determining factor is what it costs to purchase it.

It doesn't matter what the product is. In the case of a home, if you buy something over market value, you have less chance of equity gain in the same amount of time if you had purchased below market value.

If you're trying to make a profit on something, you must attempt to buy it at the lowest price so you already have intrinsic value built in. That is why we always say you make your money when you buy, not when you sell.

If however you don't understand that profits and losses aren't realized until a sale actually occurs, then it will be more difficult to understand this concept because in essence, buying low is buying low and no money is made at all when you purchase. In fact, money is spent. It's when you sell that you realize that you made your profits when you purchased.
0 votes Thank Flag Link Thu Oct 16, 2008
Hi there Franci, I think you are a litl on the high side, More like $ 7-$ 9k usually Of course if you work with a stong Realtor they may be able to convince the seller to pay the closing costs which would save you this expense.

If you are interested in examining this further drop me a line.

Kind Regards
Michael Barron
Realtor/MBA
First Team Real Estate
michael-barron@sbcglobal.net
(714) 552-6817
0 votes Thank Flag Link Thu Oct 16, 2008
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