Richard Rosensteel

Erb,
So far your plan sounds good. Some buyer agents, such as myself are very active in scouting out and approaching current owners on our buyers behalf. Another thing you could do - save those extra mortgage payments in preperation for a posssible bridge loan. That way you can buy the dream home and then sell the current property.
I'd be glad to answer any other questions you may have!
Richard - Sat Jan 26 2008, 16:56

The simple answer to this question is that market value is simply what a buyer in willing to pay.

Around here, specifically, we've seen values go up 14-18% for several of the years between 2002 and 2006. We've also seen the markey slide backward 6% in some years. No simply calculation can adequitely substitute for an appraisal and a proper going over in the free market, which is what you have when a property is listed for sale. To use your example specifically, ie: purchase in 2004 for $240k. Do nothing to improve and increase by 10% for 2005, '06, and '07 = $319,440. Even if you do that backward to 2002 you only come up to $386,522. A seller would fire sale the property at $450k and take $425k before they'd accept an offer obelow $400k.

Say that a buyer wanted to hedge their bets, that values might continue to decline: first you'd do an analysis or appraisal to determine the value today, then determine how much you think the market might slide - then make an offer.

Buyers say, "well the seller got it far a song 'X' number of years ago - they're making plenty" all too often. The value of the property is determined by the market, not a set number every year. (although that would certainly make my job easier). Don't forget that demand usually picks up again after the first of the year too. - Sun Dec 30 2007, 21:42

Foo,
Buying foreclosures has some risks that are manageable if understood buy the buyer. Mostly the risks are associated with the mechanics of the transaction and not the condition of the property. In most cases you will still know exactly what you are buying. You may not know exactly when the settlement will occur, or the exact date of your move in - but the rewards (usually all financial) can be great. It all depends on how handy you are - or if you can negotiate a price that allows for any work/repairs you think necessary. I have a piece on my blog about the short sale process - not exactly the same as a foreclosure, but very simular. I'd be happy to answer any questions you have.
Richard - Sat Dec 29 2007, 23:43

Hi, Several questions come to mind that need answering to assist you in making your decision. Many have already been discussed, so here are a few more to consider. Around here, as the current market has once again proven condo values are very volatile and can sink quickly. more so then comparable townhomes. To be sure the townhome is going to be a more solid investment. As far as the HOA fees are concerned, they are usually only $60-80 a month and cover not just the routine snow removal, trash collection, etc... but also help ensure that the neighborhood or complex is maintained to a certain standard, ie. no car on blocks in the front yard etc. This is often time a good thing. I can show you townhouse neighborhoods that look lousy, and who's value is down as a result, that would not be in that situation for a small HOA fee.
Another BIG question is..... how long do you plan to own the property. Different answers and different financial plans - might dictate different purchases. For example, you were thinking to own for say 5 years, then move to another state and sell this - would certainly open you up to buying either the townhome or the condo. Maybe you think you'll stay here 5 years then move up to something larger and keep this as an investment. A savvy investor might opt for the condo now - they are usually easy to keep rented - then go for something nicer later for yourself or family (potential future growth). Different personal situations and different goals mean different choices now.
One thing is sure - this buyers market won't last forever - eventually prices will go up again, and when that happens you want to be sure that you aren't still holed up in a rental.
Another thing that might help is a session with an independant financial advisor. Just buy an hour or two of their time and put all your questions, concerns, and current finances to them for advice. And don't forget the tax benefit of owning.
I hope I've helped more than confused.
Richard - Sat Dec 29 2007, 23:27

Good question Chuck - The questions you ask about fall under the Federal Fair Housing laws and guide lines. We can (legally) not answer in anyway as to imply that you should seek other information. There are numerous websites that i can direct you to for more information on Schools, Crime, Sex Offenders, etc... The laws are in place to help ensure that we (realtors) don't steer you (the public) in one direction or another based on "opinion"
The simple question "is this neighborhood safe" requires, by it's very nature, that opinions be formulated, ie. safe for whom? "safe" for me may not be the same as "safe" for you!
We can talk about "real property" - no other aspect of people, crime, neighborhoods, schols etc..... - Thu Dec 27 2007, 11:25