Just added a new category, house hunting, since that is currently one of my biggest PF-related projects.
DH & I spent all afternoon yesterday visiting some new developments in the area, just starting to get a feel for the market. We noticed that some builders were offering pretty significant discounts for 30-day closes which means they are hungry to get cash in their pockets. Since we don't need financing (something we of course will not reveal to any seller's agent until an actual offer is made) and can close any time (we do not care if it is 7 days or 3 years from now) this seems to be a moderately good time to be a buyer.
This afternoon we are going to hit one particular city in the greater Austin area and visit as many open houses as we can.
At this moment, we are not looking for a house to buy, just getting a feel for the local real estate market.
We will probably change this strategy several times before we actually purchase, but as of today, this is our buying plan: If we find a house we like, we would be willing to buy it if we could get it for 25% less than current market price. [That is based on our thinking of how much, given the worst case scenario, prices could drop over the next few years.] So, we will need to find a buyer who is in a bit of a hurry to sell for whatever reason. If they won't sell for that price (25% below what we think is fair market price), we'll just move on to the next house. It's not like there is only one good house out there; there are tons and tons and we can be perfectly happy in many of them. We most definitely won't be buying a house because we fall in love with it! We'll be buying a house that we like and can get a great deal on.
The trick for us will be to figure out what that current market price is!
House Hunting
October 7th, 2007 at 04:52 pm
October 7th, 2007 at 07:08 pm 1191784080
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October 10th, 2007 at 02:37 am 1191983862
baselle - You're right about the property taxes. We've heard everything from 2.3 to 3% depending on the location, and some places are tax-exempt for property that qualifies as agricultural land.
fern - The Austin area isn't depressed yet. It never experienced a real estate bubble and has seen slow-steady to moderate growth, and just now seems to be showing signs of slowing, so we think it likely will go down. However, 25% is just our current idea and we'll probably adjust that several times in the coming months.
Last time we bought a house we actually looked for TWO years before we found what we thought was the right deal; I certainly hope it won't take that long this time (I think we've gotten better at finding deals), but we're willing to wait. This is why we don't use a buyer's agent --- We wouldn't want to subject a real estate agent to us!
October 11th, 2007 at 01:40 am 1192066855
May 26th, 2008 at 05:21 pm 1211822473
May 26th, 2008 at 08:02 pm 1211832130
For example, when we sold our previous house, we gave 3% to the buyer's agent and 2% to our selling agent. If our selling agent had found a buyer himself (with no buyer's agent), he would have made 4%. That would have meant 1% less for us but 2% more for him.