Hi. We live in a very expensive area with great schools. Our house is small & we need more. We have three

Asked by Trish, Scarsdale, NY Sat Mar 8, 2008

options for our current situation:
a. Stay put and add on. Our layout is bad and the cost is a lot. We live in the least expensive part of Scarsdale, but it's still Scarsdale schools & sought after.
b. Buy up in Scarsdale. We're still limited on what we'll get for our money.
c. Move to a less sought after area like Mount Pleasant, which is still kind of nice, but where we will get much more for our $$. The taxes are still high there & the commute is longer, but not terrible.
d. Keep our house and buy a second and rent one for income-doesn't meet all our needs, but was a thought.
Now, we can afford any of the options, and we have to ultimately decide on our own based on needs & personal factors, but does anyone out there have feedback to throw out here from a real estate/economic point of view?
Although living in Scarsdale in sought after, I feel like we're living below our means.

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Khazeem Asad…, , Dallas, TX
Sat Mar 22, 2008
Yes, people do usually by homes that are on the market already, but the problem with that is they are all overpriced! In a market that has made everyone believe that their home has increased in value over the years it will nearly impossible to get an actual "fair price" for a home. I mean.... why pay more for an old home than you would pay for a new home? I'm a numbers man. Everything with me must add up, and buying an old home at the same price (or higher) than a new home does not add up. And renovating an old home is good, but what about the foundation? What about the in-ground plumbing? Did they change all the wiring? These things must be considered.

Allow me a second to explain something. The whole thing of "home appreciation" was based on the value of undeveloped land versus developed land. Of course once you take raw land and make it ready for use it is worth more after being developed than it was when you purchased it. However, the term has been misapplied to homes because of the business of credit which benefits no one except the lenders. And don't let that surprise you because politicians and business men "misapply" terms all the time when its to their benefit.

Anyway... a home is a "product". And like any other product it looses value with time, UNLESS someone is willing to pay more for it. You could make the claim that the value has increased but if no one is willing to pay the asking price, the price naturally must come down to a point in which someone is willing to pay. Therefore, it has no real value other than the "perceived value" of the buyer and/or seller. And this is the stalemate that you will find with older homes.... the buyers "believe" that the homes are worth more than they actually are. And the inflated appraisal rates and greedy agents, brokers, and lenders that depend on percentages for profits don't help this none.

I'm sorry, but it is just my belief, naive as it may seem, that at this time in our human mental evolution we should be aware that there are other options to nearly all things. And the ways that we were TOLD to do things may NOT have been correct or the most efficient, and in some cases, the things that we were told may have been deliberately misleading. Because if this were true, that the older a home is the more it is worth, then every home built in the 70's should be worth a fortune right now.

Just think about it.

Khazeem Asadullah
0 votes
Mikem, , 01803
Sat Mar 8, 2008
The choice is of course yours. However, keep in mind that to do option b or c you'll have to sell your house first (unless you can afford to keep paying for both old and new house while you try to sell.)
And for option D to be worthwhile the rent needs to cover the mortgage/taxes etc. and preferably be a bit higher to cover repair costs you'll have to do at some point (also consider vacancy rate when calculating how much money you'd get from renting it out)
2 votes
RE/MAX Empire…, , Texas
Tue Apr 15, 2008
If you can afford to hang on to your home and keep it as a rental that is a very good position to be in. In most markets it is not a good time to sell. You could rent it out. As the previous agent said, lease amount should be higher than mortgage, taxes, and insurance combined. You probably will not have a problem finding a renter these days... Contact me if you need more specific advice.
1 vote
Khazeem Asad…, , Dallas, TX
Sat Mar 22, 2008
I would like to comment here if its not too late. I understand that you don't need to sell your current home if you do decide to buy a new home. Thats good. Therefore the only thing that is left is my golden rule of any business transaction - "always buy low". If you buy a pre-existing home, or purchase a home from a developer, you will pay between 20% - 60% more than you have to. This becomes more of an issue if the home is old.

You can get your money's worth in the area of your choice if you avoid pre-existing homes, owner builder programs that force you to take out a LTV loan or what they call "permanent financing", developers, and buy at the right price.

If you need more information please contact me at - info@serapisdebtservices.com

I hope I said something to trigger a different thought pattern.

Khazeem Asadullah
1 vote
Trish, Home Buyer, Scarsdale, NY
Sun Dec 27, 2009
Thank you for answering, Melody. I just read your reply now.
We would profit from renting out our current, as we have no mortgage (we're savers who live with a cruddy kitchen but paid our mortgage off in 11 years). But I'm not thrilled w/the idea of being a landlord.
We still have done nothing, just save & live in a nice but small house with few updates. We are in a prime condition to buy, I realize, but are afraid of the high taxes on moving u (remember-we're conservative squirrel savers!).
0 votes
Trish, Home Buyer, Scarsdale, NY
Sat Mar 22, 2008
Thank you very much for replying! I don't fully understand everything you wrote, but it has indeed triggered another thought pattern because I will research a bit.
What do you mean by a "pre-existing" home? Don't most people go out "house-hunting" and look at/purchase homes already there that are being sold?
One house we've looked at was built years ago, but all but torn down and renovated/built onto a couple of years ago. We'd love to buy it since it's essentially new. The biggest problem is that the taxes are high (and it's not in the highly desirable area, just okay.
Thank you very much for your feedback!
0 votes
Trish, Home Buyer, Scarsdale, NY
Sat Mar 8, 2008
Thank you so much for answering, Mikem! I thought I'd never get a reply.
We don't, fortunately, need to sell our house to buy.
I know that it is a decision we ultimately have to make, but just wanted to search for some cold, hard economic facts to back up or to consider in our decision.
Thank you!
0 votes
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