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Advice for a newbie.
Hi everyone, I'm new to the Nest Boards (been on TK and TB a lot, but not really The Nest). I have a question for you all, if you'd be so kind as to offer input.
My husband and I are looking to sell our house and find a less expensive property. We have had our house on the market for about 3 or 4 weeks, have had 4 showings, an open house, and one offer, with another one potentially coming in.
We have 2 houses that we have found that we really like. One is a short sale, a detached bungalow with a huge, open floor plan, that we could see ourselves calling home forever, potentially. It would need a new roof in the next 2 years, and we'd need to add a dishwasher (though there is space for it and my DH thinks he could do the work easily). We would also need to convert it from oil to electric heat, but the ductwork for the forced air is already in place. The house sits on a pretty busy road, but has a great back yard that would be safe for our son to play in. It would just be a pain pulling in to and backing out of the driveway, and it could potentially be noisy (though at our walk through, we couldn't hear much traffic.)
The other house is an end-unit of a townhouse. It's a HUD property, and it would need new paint in every room, new flooring in every room, the basement would need to be finished, it would need new interior doors, exterior doors, new dishwasher and oven, new bath tub, sinks, vanities, toilets, kitchen countertops, new shutters, and probably a new HVAC unit in the next year. There are walking paths, tot lots, basketball and tennis courts, and a baseball field in the development, with NO Association fees. The house also has a fenced-in back yard and is just as close to all the places we frequent, but is not on the major road (the houses are literally 3 minutes from each other.)
We've figured that the cost to repair the HUD house is about $15,000, but it would still bring that to a lower price than the detached house. And we'd hopefully be saving enough that in 4 or 5 years we could move into our dream house.
Which house do you think you'd take? The more expensive one that still needs 2 big projects done to it, but has the better floor plan but worse location? Or the dirt-cheap house that requires a lot of start-up money before moving in (which we'd need to figure out how to get, BTW) but has so much potential?
My husband and I are so torn because we really like both places for different reasons, and we are looking for an outsider's perspective.
Thanks!
Re: Advice for a newbie.
With the purchase price + the money you would have to put into it, is the hud house currently priced lower than comps in the area? That would be a big concern for me with a town house because they can only appreciate in value so much. If you could sell it for more than you paid plus the repairs, then it might be worth it since you'd be selling something with a lot of updates, which makes things easier.
Personally, I like the idea of buying something that we can stay in forever (which is what we're doing) since there really isn't any way to know what the market will do and I'd rather not have to pay commission and closing costs in a few years.
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1) How do you plan to get money for either renovation? My only thought would be a 203k loan and you have to use licensed contractors throughout the process and complete everything within a time frame.
2) Sometimes short sales are long processes. Do you have some temporary hosing after you leave your current house?
3) re House 1: what kind of loan do you plan to get? I'm not sure a roof with less than 2 years life will pass FHA standards (not sure about conventional mortgages) but the sellers probably won't be able to fix it for you of they are already doing a short sale.
4) Are townhomes popular where you live? In my area resale on that would be difficult because most of the homes are single family. And does your realtor think association fees could come up while you live there? It seems odd to offer all that for "free".
Neither of those options would be right for me - I couldn't live on a busy road - it would annoy me too much. And I want a house that doesn't require a ton of work. Is there anyway you can hold out for something better, or do you need to move quickly?
Edited: I reread your post and see that you might really need to move fast due to your current expensive house. I guess I might go with the first option in that case if there is nothing else you can find that looks right. That is, if you're not bothered with living on a busy road long term.
We could technically stay in our house, but our budge would be stretched tighter than spandex on a whale. And I know things will go wrong, because every year it's like something new happens, or breaks, etc, like us replacing our HVAC here 2 years ago because it randomly broke.
We are keeping our options open, and I know we don't have to take any offer that comes our way, but we are really handy people and can totally transform a property. We did it with our current place and can do it again.
DH does all the money/loan stuff, so I'm bypassing 1 and 3. 2: Yes, we have an offer from my cousin and his wife (our son's godparents) to stay with them if we need a temporary place. This would be rent-free, though we'd pay them a few hundred bucks as a thank you and to cover the extra water/electric/etc.
4: Townhomes are VERY popular here. There are new ones going up for $300,000, and people are snatching them up. In this particular development, the walking path, park, etc, is actually a community park, so it's paid for by the local taxes. So yeah, we're paying for it, but it's not an extra monthly thing and never would become one.
I really like the idea of staying in something "forever" as well. There are a lot of great houses in our area that we want to move to (a new community that is a "custom build" area with a few lots left!), but they are too expensive. And I don't see how we can save money if we stay in our house, since after all our bills we have $60 a week for clothing, eating out, shoes, and anything else we want to do (gas and groceries are covered in the bills, but the "fun stuff" and little necessary purchases aren't).
If we can put a low bid in for the HUD house, it would be about 1/2 the asking price for our house, and that includes the repairs. When we'd be ready to sell it, I think we could get an extra $40,000 for it, so we would, in the long run, be making a profit, to help with money down for the dream house and to put money in savings.
We are going to look at 2 more places today, so I'm hopeful that we'll find something. But these 2 places would work for us if they had to.