OT - Buying a House

[ctchamps]

I’m only 25 and financially I hate the concept of renting.

Don’t like capes - they’re cramped. But I’ve been looking in Southington, Farmington, and WeHa and my price range has been forced towards $300 for anything that doesnt need a new kitchen or significant work.

Do you see the value of Bristol and Meriden properties going down?

I wouldn’t be afraid of remodeling a kitchen.

 

[whaler11]

I looked at Rocky Hill, Cromwell, and Wethersfield almost primarily early on and didn’t see anything I liked.

Portland might not be a horrible place to look.

 

[ConnHuskBask]

A friend recently was talking to me about the idea of being "house poor", where essentially all of your money goes into the mortgage, taxes, utilities, insurance and upkeep. But, obviously the trade off is equity in a home.

I've read a line of thought that advocates to renting and put the difference in expenditures (between home owning costs and rent) straight into the market and that at the end of the day the market return would be comparable to what your houses value would end up being. I haven't ran all the numbers, but I intend to take a look into this.

While I completely understand the idea of home ownership, I think the idea that you are completely wasting money renting isn't entirely true; if you're making sound decisions with your cash.

Any thoughts?

 

[TRest]

A friend recently was talking to me about the idea of being "house poor", where essentially all of your money goes into the mortgage, taxes, utilities, insurance and upkeep. But, obviously the trade off is equity in a home.

I've read a line of thought that advocates to renting and put the difference in expenditures (between home owning costs and rent) straight into the market and that at the end of the day the market return would be comparable to what your houses value would end up being. I haven't ran all the numbers, but I intend to take a look into this.

While I completely understand the idea of home ownership, I think the idea that you are completely wasting money renting isn't entirely true; if you're making sound decisions with your cash.

Any thoughts?

Sometimes it's about whether you can stand other people. I have never enjoyed having strangers above, below, and to the side of me in an apartment building. I agree the days of just buying any property and watching it double (or more) in value over time seems to have ended in CT.

 

[Excalibur]

A friend recently was talking to me about the idea of being "house poor", where essentially all of your money goes into the mortgage, taxes, utilities, insurance and upkeep. But, obviously the trade off is equity in a home.

I've read a line of thought that advocates to renting and put the difference in expenditures (between home owning costs and rent) straight into the market and that at the end of the day the market return would be comparable to what your houses value would end up being. I haven't ran all the numbers, but I intend to take a look into this.

While I completely understand the idea of home ownership, I think the idea that you are completely wasting money renting isn't entirely true; if you're making sound decisions with your cash.

Any thoughts?

Easily solved by not buying more house than you can afford to start with. I don't think the difference in cost between renting and homeownership (at the appropriate price) is that large. Realtors love to convince buyers that they can afford more, and they're not doing buyers any favors.

 

[ctchamps]

Sometimes it's about whether you can stand other people. I have never enjoyed having strangers above, below, and to the side of me in an apartment building. I agree the days of just buying any property and watching it double (or more) in value over time seems to have ended in CT.

And this should be the primary focus for @CTBasketball - his happiness. Whatever choice he makes he should consider the possibility that market conditions may not be favorable at the time he wants to sell. His purchase should consider the possibility he would have to live in his home a lot longer than he projects.

 

[Palatine]

You buy a house. You fight with the house. And because it's much bigger than you, it wins.

The best advice I received for my first place was, buy something where you want to live. I ended up in a condo a block from work. If you choose a neighborhood for any other reason then you want to live there, you will never be happy. It's much more important to like the location than the place. Remember this is a starter home not a lifestyle choice.

As you pay your mortgage you will build a fund that can be used as a down payment when you begin to move up. You are unlikely to save as much renting and stashing cash away. If you can pay a little extra on your mortgage payment each month, that goes straight off the principle and and reduces your interest. So you will save even more.

Do not buy more house or condo than you need. There will surprise bills that you never anticipated. I never regretted my first small condo and in a few years I was in a position to find a place I really liked (about five years later).

 

[MattMang23]

My (very) wealthy sister and banker husband bought and sold several houses during their economic ascension. His theory was this - always buy the crappiest house in the neighborhood. Then fix it up while you are there. When you sell, you get the best value back. Also, by buying the crappiest house in the neighborhood, you end up in the best neighborhood you can afford.
I do a lot of real estate work and I've moved enough to have purchased four houses for myself.
General thoughts:
Neighborhood/school is most important if you have kids. Care less about how pretty your kitchen is or what needs a remodel and care more about who the neighbors are and how good the school is.
Commute to work/school is important, but for me - and it's personal - I'd spend 10 extra minutes in the car each day for a significantly better place. I don't really mind car time, however.
Realtors, with few exceptions, work for the deal, not the client (save your breath BY realtors - I'm impervious to your mind tricks). Remember that. You have to be your own best advocate, for all aspects of the deal, from offer price, to down payment, to negotiations. When I sold a place in DC in 05, my Realtor wanted to start at a price 80k below my price. I insisted on my price. Got two full price offers on the 1st day on the market.
That written, a realtor doesn't cost you anything as the buyer - use them to unlock doors at your whim. Any contract you sign with a realtor you should keep to a minimum duration. Very easy to find another if need be if the 1st doesn't want to re-up.
Use your own independent inspector. They are out there. If you use the one that your Buyer's realtor suggests, you will likely be getting a rubber-stamper that will flag a few minor issues but will not flag anything substantial, because as soon as he gets the reputation as a deal-killer, he gets no more calls.
Put as little down as possible. If the real estate market is hot, you may have to put down more "good faith" money. In reality, standard Realtor contracts are garbage, and easily gotten out of by either side, so there is not much risk, as long as you follow the timelines in the contract for getting out.
Be careful of "liquidated damages" provisions in the contract. Feel free to send me a contract BEFORE you sign - I'll review it for free. That goes for any BY regulars buying a house (except for CL - for him, mostly free).
Keep us updated and good luck.
BTW - lived in Newington and Simsbury. Newington was nice. Down to earth, decent school, regular folk. Good location. Bit cramped. Simsbury was richer, idyllic, good school, with rich kid problems. Bit out of the way. Lived in Newington in the late 90s and in Simsbury in the mid 2000s, so not really current.
Good luck.

I'll be in the market as a buyer again soon. Thanks for all the tips. Very good insight. I'm going to bookmark this post.

 

[CL82]

@Deepster

Goal is to stay there for 4-5 years minimum. The hard part is finding a house that needs a little bit of work (floors, paint, roof), but not too much to where they price it outrageously high.

When I was in your position I asked my realtor to show me houses that were structurally sound but had presentation issues like tacky paint job or bad or overgrown landscaping. Those are easy fixes. FWIW my price range was pretty much the same as yours and that was nearly 30 years ago. I have no idea about CT prices though.

 

[MattMang23]

Portland might not be a horrible place to look.

Ringing endorsement!

 

[CL82]

Be careful of "liquidated damages" provisions in the contract. Feel free to send me a contract BEFORE you sign - I'll review it for free. That goes for any BY regulars buying a house (except for CL - for him, mostly free).

Lol, so I'm reading through this thinking this is pretty good stuff, until I got to this. Really Frank? Really? And here I thought that I take it pretty easy on you.

Thanks for the laugh.

 

[geohusky]

Look at these two listings on Realtor.com new construction

170042589 & 170042599

 

[CL82]

I looked at Rocky Hill, Cromwell, and Wethersfield almost primarily early on and didn’t see anything I liked.

@whaler11 posted a picture a while back of a listing of a house that was just under $500k but was a lot of house (at least on a square footage basis) for the money. I think it may have been Hamden. That might not be a bad place to look.

Also @August_West is looking to sell his house in a few months. He loathes the place and may actually be willing to pay you to take it.

 

[CTBasketball]

The only reason I can justify buying a condo is it is easy to rent it out after I move on to a bigger house after 4-6 years.

It is difficult to rent out a house. Selling before 5 years is not financially smart.

 

[whaler11]

A friend recently was talking to me about the idea of being "house poor", where essentially all of your money goes into the mortgage, taxes, utilities, insurance and upkeep. But, obviously the trade off is equity in a home.

I've read a line of thought that advocates to renting and put the difference in expenditures (between home owning costs and rent) straight into the market and that at the end of the day the market return would be comparable to what your houses value would end up being. I haven't ran all the numbers, but I intend to take a look into this.

While I completely understand the idea of home ownership, I think the idea that you are completely wasting money renting isn't entirely true; if you're making sound decisions with your cash.

Any thoughts?

Owning a house is the most overrated concept on the planet.

Expecting to grow equity in Connecticut at this point is a fool’s errand for anything that isn’t in a handful of towns with top school systems.

I bought my house ten years ago, have upgraded floors, propane fireplace, pool, second deck in a town where the schools are good enough that our hs population is one of the few growing...

Did a refi last year. The appraiser bent over backwards to come up with a number that was 65k less than I paid after sinking 50k in improvements. Granted I bought at the worst time in 07 - but almost nothing is appreciating anywhere around here.

Even the weathly beach communities can’t move homes in places like Old Lyme. There are prices you never thought you’d see again and still nobody buys.

In short anyone telling you that homeownership is a window to wealth development is living in the past. Maybe it’s true in some places - but it ain’t true here.

 

[August_West]

He loathes the place and may actually be willing to pay you to take it.

1/2 right.

 

[CTBasketball]

Owning a house is the most overrated concept on the planet.

Expecting to grow equity in Connecticut at this point is a fool’s errand for anything that isn’t in a handful of towns with top school systems.

I bought my house ten years ago, have upgraded floors, propane fireplace, pool, second deck in a town where the schools are good enough that our hs population is one of the few growing...

Did a refi last year. The appraiser bent over backwards to come up with a number that was 65k less than I paid after sinking 50k in improvements. Granted I bought at the worst time in 07 - but almost nothing is appreciating anywhere around here.

Even the weathly beach communities can’t move homes in places like Old Lyme. There are prices you never thought you’d see again and still nobody buys.

In short anyone telling you that homeownership is a window to wealth development is living in the past. Maybe it’s true in some places - but it ain’t true here.

This is my dilemma and I agree. That’s why I think renting it out after moving on to a better house is essential because you will find it difficult to make your money back.

 

[whaler11]

Ringing endorsement!

Dude asked about Bristol and Meriden. They make Portland look like Utopia.

 

[the Q]

Condo seems to be your friend in this case. If you're gonna work in East Hartford you could actually get a pretty nice condo in like a Tolland if you wanted to for that price.

 

[August_West]

In short anyone telling you that homeownership is a window to wealth development is living in the past. Maybe it’s true in some places - but it ain’t true here.

shhhhh

Im out. And you are going to keep driving rentals up.


Dont listen to Whaler, people. Buy property. God aint making more of it.

 

[MattMang23]

Dude asked about Bristol and Meriden. They make Portland look like Utopia.

Yeah. The only conclusion I could draw from him mentioning those towns was that he's not from around here...

 

[auror]

A friend recently was talking to me about the idea of being "house poor", where essentially all of your money goes into the mortgage, taxes, utilities, insurance and upkeep. But, obviously the trade off is equity in a home.

I've read a line of thought that advocates to renting and put the difference in expenditures (between home owning costs and rent) straight into the market and that at the end of the day the market return would be comparable to what your houses value would end up being. I haven't ran all the numbers, but I intend to take a look into this.

While I completely understand the idea of home ownership, I think the idea that you are completely wasting money renting isn't entirely true; if you're making sound decisions with your cash.

Any thoughts?

NYT/Upshot has a very good calculator for that. Usually, the variable is how long you intend to stay in the place (and obviously the market's potential appreciation)

Is It Better to Rent or Buy?

 

[CL82]

Yeah. The only conclusion I could draw from him mentioning those towns was that he's not from around here...

I remember Meridan as being a nice middle class suburb but that was 40 years ago and from a very small sample. What changed or was I just not paying attention back then.

 

[CTBasketball]

I remember Meridan as being a nice middle class suburb but that was 40 years ago and from a very small sample. What changed or was I just not paying attention back then.

I’m from Southington. Southington residents tend to think this town is amazing. Everyone’s cousin and brother and grandpa lives here - it’s incessed no one ever leaves. Not that there’s anything wrong with that, the town is nice. I like it. But we tend to talk down on neighboring towns. See what I did here?

So everyone I’ve talked to back home says Meriden, PVille, Bristol, and Wolcott are all dumps and not to buy there. That’s why I asked I wanted an outsider opinion.

 

[Dream Jobbed 2.0]

I think the Rocky Hill-Cromwell-Newington-Berlin run of CT is one of my least favorite places on earth. The Berlin Tpke spooks the hell out of me and feels like New Jersey.

 

[ctchamps]

I’m from Southington. Southington residents tend to think this town is amazing. Everyone’s cousin and brother and grandpa lives here - it’s incessed no one ever leaves. Not that there’s anything wrong with that, the town is nice. I like it. But we tend to talk down on neighboring towns. See what I did here?

So everyone I’ve talked to says Meriden, PVille, Bristol, and Wolcott are all dumps and not to buy there. That’s why I asked I wanted an outsider opinion.

You're right. My brother lives there.

 

[Robertelamin]

I think the Rocky Hill-Cromwell-Newington-Berlin run of CT is one of my least favorite places on earth. The Berlin Tpke spooks the hell out of me and feels like New Jersey.

Turnpike Trash.

Also outside of the cities, Florida seems like one enormous Berlin Turnpike.

 

[HooperScooper]

Where do you work? Hartford? Noticed you aren’t looking east of the river. Commute to Hartford is miserable from any direction.

Try a commute in Boston these days. Miserable is a relative term. I'd kill for the worst commute in the Hartford area!

 

[TRest]

I’m from Southington. Southington residents tend to think this town is amazing. Everyone’s cousin and brother and grandpa lives here - it’s incessed no one ever leaves. Not that there’s anything wrong with that, the town is nice. I like it. But we tend to talk down on neighboring towns. See what I did here?

So everyone I’ve talked to back home says Meriden, PVille, Bristol, and Wolcott are all dumps and not to buy there. That’s why I asked I wanted an outsider opinion.

I'm from Plainville originally. It's a smaller Southington with no McMansions. My brother stayed there and raised his family, no issues. You couldn't pay me to stay there because of the local's weird loyalty to a mediocre place.

 

[DaveHuskiesFan]

I think the Rocky Hill-Cromwell-Newington-Berlin run of CT is one of my least favorite places on earth. The Berlin Tpke spooks the hell out of me and feels like New Jersey.

Interestingly enough. The biggest and most expensive homes in Newington/Rocky Hill are right along the turnpike.