Etta Jones, Home Buyer in Irving, TX

Am I getting a good deal in Cedar Hill?

Asked by Etta Jones, Irving, TX Thu Apr 17, 2008

Found a 5BR/3BA in Stonewood Heights subdivision. 2454 sq ft, built in 1986 but fully updated inside (seller is an REO flipper), good curb appeal. Home appraised for exact amount of my loan: $136,500 (not the highest or the lowest in the subdivision). Inspection was good, except entire A/C system is 22 yrs old and about to die (seller won't help out). Neighborhood is a little shabby: unkempt lawns, too many cars parked on street, etc. but otherwise family friendly and quiet.

My only concern is if the home warranty doesn't cover the replacement of the A/C system (which will have to be done very soon), and I have to come out of pocket $10K to do it myself, will a brand new A/C system raise the market value enough for it to still be a good deal for me? I'm not crazy about the neighborhood appearance, but I love the house and want it to be a good investment. We plan on being there about 7 years.

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Jim Johnson, , 78233
Fri Apr 18, 2008
Replacing a necessary system is not an improvement--and the AC unit will be +/-7 years old when you sell. No, replacing it will add no value.

I'd be surprised if the home warranty does not cover replacing the AC, but it will have to fail first. If you do have a home warranty that does not cover replacing the AC, please let us know who the issuer is.

If you want to add value for the lowest dollar, do some landscaping and keep the property up--you might start a trend. Make sure everything you plant is xeric to keep the water usage as low as possible.

If you want to take more proactive action to clean up your neighborhood and your subdivision has an HOA, get involved. Check the CC&Rs to see what provisions there may be related to maintaining the yards.
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The Laughlin…, , Dallas, TX
Wed Apr 23, 2008
I agree, replacing the A/C is not an improvement--it is a necessity. Have you negotiated a residential service contract with the seller? If so, be careful to pick one that will not exclude replacing your A/C. The contracts usually state a time period after the contract goes into effect that they will do such work. If the A/C is working now, you may be able to make it through the initial time period. Also, no agent can tell you what the market will be like in your neighborhood in 7 years! Luckily, the DFW area has a history of stability in the market place with few very highs and few extreme lows. Based on that history, you will probably be OK.
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Dallas Texas, Agent, Dallas, TN
Thu Apr 17, 2008
a) Where is your realtor to answer your question(s)? I am hopeful you are not purchasing this home for sale by owner. RULE OF THUMB never purchase a home without a real estate agent representing you from either a builder, "flipper", or for sale by owner, or seller with their own agents. Therefore if you don't have a realtor you can fall under their E & O insurance policy
b) There are many foreclosures in Cedar Hill that are recently built with wonderful floor plans you may want to consider those homes
c) Appraisal will never come in more than the contract amount I am a loan officer and real estate agent the reason why it can raise "red flags" to the lender impede your success in obtaining the house.
e) Do you have the cash to replace an A/C system $10K is allot of money for too spend
f) You can purchase other homes below market value with equity.
g) If the seller is not willing to replace the A/C then pull the contract if that is an issue for you $10K cash for most people is allot of money

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T.E. & Naima…, Agent, Dallas, TX
Thu Apr 17, 2008
Etta, upgrading the AC does not make your property value go up, sorry. It is supposed to be working when the first valuation was done. It seems that you are having buyers remorse and you haven't closed yet. Appraisers are very conservative these days, if they felt the house wasn't worth the 136,500, they wouldn't have appraised it at such amount but if they felt that it was worth more, they would still appraise it only for the amount required for you to get the loan.

About the home warranty, shop around and see if you can buy a pre-existing condition coverage for only $79. You don't have to change the units now, wait until they die.

The neighborhood appearance is a major thing when it comes to resale. Do you have an HOA? may be get the city code enforcement to force the people to mow their lawns and remove junky cars off the street.

Good luck,
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