OT - Buying a House | Page 7 | The Boneyard

OT - Buying a House

When you lock in on some target properties go to Town Hall and peruse the property file:

Banks/insurers hate financing noncompliance and may require sellers to show permits for various work done. So, if a seller is hyping a major kitchen remodel and a screened in porch there better be some approvals. Roofing requires a building permit and an unpermitted roof job can stall a closing. Windows and siding are maybes.

Get a Schedule A and any other deed that may show there are easements or right of ways on a property. Would hate to see you a property to find out old man Green can let his goats cross the rear 40 foot strip every day. Or a property you're looking at has a view easement granted to a neighbor.

Some subdivisions may have Home Associations. Some people are oblivious to this and learn the hard way.

If you look at a property on septic know what how a system works and review that property file.

Ask about obscure taxes. Middletown has a fire tax. What's a view tax?

Finally...observe the neighbors. Would hate to see you move next door to an alchie or barking dog owner guy.

***Our first house was a great little cape in Meriden. Excellent bang for our buck at $130k. At $240k you should find something in a nicer neighborhood. Taxes were a bear but all cities kind suck.
 
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Interesting responses so far regarding rent/own.

Basically seems like if you want to buy a home to have a bigger space to raise a family, then go for it. Just don't expect it to be an investment, but rather an expense, particularly in the northeast.
 
jleves said:
I'm certainly not a financial adviser and I have no idea about the conditions in CT, but I'm really surprised that your house has only appreciated 5% in 15 years. I know there was the bubble burst in that time but I thought most places had increased significantly since the bottom. I was fortunate that I got my home in 2010 and it's appreciated 80% since then. Even if I go back to the price it sold at in 2006 before the bubble, it's still up 30% since then. Add in the tax benefits of interest and property tax (which may be more limited in 2018) and the fact that when you sell, most or all of the profit isn't taxed and I can't see a reason not to buy a house if you can afford it.

My advice for a 25 year old person with the means to buy a house:
1) Get rid of all debt - particularly credit card debt. There's no reason to pay double digit interest on money you don't have. Low interest car or student loan debt is more tolerable but you still want to get rid of it as fast a possible. Pay off the higher interest debt first while maintaining the lower interest debt. Eat raman, get rid of as much of luxury things you can live without, put on a sweatshirt and turn down the heat and pay off as much debt as you can. You have your 40s and beyond to be comfortable.
2) As to the 50/30/20 rule, there's no reason to spend 30% on things you want at that age - lower it. Your late 20s early 30s will still be amazing without spending 30%.
3) Don't get married or have kids until you can afford it. You're going to live longer than you parents and way longer than your grandparents. 40 plus years with a spouse is more than enough - wait until you're 35 or so. Your kids will be out of the house when your 60-65 - that's good enough.
4) Go ahead and live with someone who can do 1) and 2) above until you're ready to have kids and can afford it.
5) If you can do 1) and 2) go ahead and buy a house as soon as you can. Buy the worst house you can afford and can fix up in the best neighborhood you can find. If you are handy, you can create at ton of equity/worth in a fixer - particularly if you don't have kids to deal with. Know your limits. It's stupid expensive to find contractors for things you can't handle.
6) Sell your first house in 2 to 5 years depending on market conditions. If you can get 250k in profit, it's not taxable. That profit is in your pocket tax free.
7) Take the profit and equity and buy the next worst house you can fix in the best neighborhood you can find. You have 5 years this time because you can only take the free tax from profit once every 5 years.
8) Rinse repeat buy, fix, sell every 5 years until you have enough money to buy the house you want to spend the rest of your life in. You can turn about 5 houses over between 25 and 47 or so. If you get married in that time frame, you take 500k in profit without taxes. If you do it right, by your late 40s, you can buy a great house with no mortgage.
9) Make sure you never get emotionally attached to a house so that you can't do the 5 year turn over. It's all a means to an end.

Good luck!
Expand ...

Dude should be pumped his house is worth more than he paid for it. This isn’t Cal-if-ornia sunshine.

Everyone be sure not to make more than 250k in 2 years. You’ll have to tread softly.
 
CTBasketball said:
In CT. I want to stay under $250 because I want this to be more of a starter home...taxes scare me.

So far I’ve been looking in Newington, West Hartford, Southington, Farmingtom, and Berlin. Wanna stay close but the market has been dry.

Does anyone live in Wolcott, Plainville, Meriden, or Bristol? What’s it like there I may expand my search by a few more towns.
Expand ...


Wallingfod has a good mill rate and school system, plus the cheapest electric in the state.
 
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whaler11 said:
Oh god never buy a house with well/septic.

Unless you’d like to buy mine in like 15 years. Otherwise. Good lord it’s 2018 - have sewers.
Expand ...
Just imagine living on public water knowing this water was sand-filtered over and over, laden with flouride and probably is purified gray water.

It is nice to know one can flush anything into a sewer system and somewhere down the line there is a crew that cleans up eveyone's waste. Septic systems have shelf life and can hinder house expansion. Nervous to own but it is nice to be self-reliant.
 
Dove said:
Just imagine living on public water knowing this water was sand-filtered over and over, laden with flouride and probably is purified gray water.

It is nice to know one can flush anything into a sewer system and somewhere down the line there is a crew that cleans up eveyone's waste. Septic systems have shelf life and can hinder house expansion. Nervous to own but it is nice to be self-reliant.
Expand ...
Need to check the leech fields proximity to the well. The condition of the septic tank, the well, etc.
 
uconnbill said:
Wallingfod has a good mill rate and school system, plus the cheapest electric in the state.
Expand ...
At $250k in Wallingford you get a 80-year old ranch or cape on a slab where your back yard is someone's rear yard.

At $350k in Wallingford you get better construction but your rear yard is someone's side yard and another's rear yard.

The town is totally built out.
 
whaler11 said:
Oh god never buy a house with well/septic.

Unless you’d like to buy mine in like 15 years. Otherwise. Good lord it’s 2018 - have sewers.
Expand ...

A lot of the nice towns worth living in are still septic and wells. Just have to understand what it's about if you are coming from sewer/ city water
 
Dove said:
Just imagine living on public water knowing this water was sand-filtered over and over, laden with flouride and probably is purified gray water.

It is nice to know one can flush anything into a sewer system and somewhere down the line there is a crew that cleans up eveyone's waste. Septic systems have shelf life and can hinder house expansion. Nervous to own but it is nice to be self-reliant.
Expand ...

Maybe you have the knowledge and equipment to be self-reliant with a septic system.

I’m sort of stuck with professionals that can install water systems and pump septic tanks and replace well motors. I had my yard dug up to find out the women of my house get a lot of hair in the drain. When there is actual
human waste in your back yard on a hot Saturday afternoon it’s tremendous.

Nothing beats hauling 40lb bags of salt all over the place. It’s like being Davy Crockett.
 
methodology said:
A lot of the nice towns worth living in are still septic and wells. Just have to understand what it's about if you are coming from sewer/ city water
Expand ...

Agreed you want to understand it’s an absolute constant pain in the rear and is expensive as hell.
 
.-.
whaler11 said:
Dude should be pumped his house is worth more than he paid for it. This isn’t Cal-if-ornia sunshine.

Everyone be sure not to make more than 250k in 2 years. You’ll have to tread softly.
Expand ...
I usually don't bother to respond to people making idiotic comments on my posts, but really? That's what you have from my post? This isn't California and don't make over 250k in 2 years? Try harder. Or don't. Go find something else to do.
 
My parents moved from West Hartford to East Granby last year, trading town water for septic. Upon home inspection found out the entire septic had to be replaced. The seller footed much of the bill but the entire thing was 25K to replace. No thank you. City water for my next place.
 
nomar said:
I'm mostly pro Bono in that I only like U2's albums through Achtung Baby.
Expand ...
I might be a little more pro Bono because I love "The Beat Goes On."
 
MattMang23 said:
My parents moved from West Hartford to East Granby last year, trading town water for septic. Upon home inspection found out the entire septic had to be replaced. The seller footed much of the bill but the entire thing was 25K to replace. No thank you. City water for my next place.
Expand ...
Septic tank sizes also should be looked at. If you have a smaller sized tank, with 4 people in your house, you might want to consider a larger tank. Or have the tank pumped out 2x a year to be safe. If the tank fails you might as well light yourself on fire.

I’ve been staying towards sewer - grew up with a septic tank and I’m well aware of their issues.
 
jleves said:
I'm certainly not a financial adviser and I have no idea about the conditions in CT, but I'm really surprised that your house has only appreciated 5% in 15 years. I know there was the bubble burst in that time but I thought most places had increased significantly since the bottom. I was fortunate that I got my home in 2010 and it's appreciated 80% since then. Even if I go back to the price it sold at in 2006 before the bubble, it's still up 30% since then. Add in the tax benefits of interest and property tax (which may be more limited in 2018) and the fact that when you sell, most or all of the profit isn't taxed and I can't see a reason not to buy a house if you can afford it.

My advice for a 25 year old person with the means to buy a house:
1) Get rid of all debt - particularly credit card debt. There's no reason to pay double digit interest on money you don't have. Low interest car or student loan debt is more tolerable but you still want to get rid of it as fast a possible. Pay off the higher interest debt first while maintaining the lower interest debt. Eat raman, get rid of as much of luxury things you can live without, put on a sweatshirt and turn down the heat and pay off as much debt as you can. You have your 40s and beyond to be comfortable.
2) As to the 50/30/20 rule, there's no reason to spend 30% on things you want at that age - lower it. Your late 20s early 30s will still be amazing without spending 30%.
3) Don't get married or have kids until you can afford it. You're going to live longer than you parents and way longer than your grandparents. 40 plus years with a spouse is more than enough - wait until you're 35 or so. Your kids will be out of the house when your 60-65 - that's good enough.
4) Go ahead and live with someone who can do 1) and 2) above until you're ready to have kids and can afford it.
5) If you can do 1) and 2) go ahead and buy a house as soon as you can. Buy the worst house you can afford and can fix up in the best neighborhood you can find. If you are handy, you can create at ton of equity/worth in a fixer - particularly if you don't have kids to deal with. Know your limits. It's stupid expensive to find contractors for things you can't handle.
6) Sell your first house in 2 to 5 years depending on market conditions. If you can get 250k in profit, it's not taxable. That profit is in your pocket tax free.
7) Take the profit and equity and buy the next worst house you can fix in the best neighborhood you can find. You have 5 years this time because you can only take the free tax from profit once every 5 years.
8) Rinse repeat buy, fix, sell every 5 years until you have enough money to buy the house you want to spend the rest of your life in. You can turn about 5 houses over between 25 and 47 or so. If you get married in that time frame, you take 500k in profit without taxes. If you do it right, by your late 40s, you can buy a great house with no mortgage.
9) Make sure you never get emotionally attached to a house so that you can't do the 5 year turn over. It's all a means to an end.

Good luck!
Expand ...
My house is estimated at about what I paid 18 years ago... if I’m lucky. The market in my area is through the floor. And I’ve put $1000s into it. The houses for sale around me have been like that for months.
 
whaler11 said:
Maybe you have the knowledge and equipment to be self-reliant with a septic system.

I’m sort of stuck with professionals that can install water systems and pump septic tanks and replace well motors. I had my yard dug up to find out the women of my house get a lot of hair in the drain. When there is actual
human waste in your back yard on a hot Saturday afternoon it’s tremendous.

Nothing beats hauling 40lb bags of salt all over the place. It’s like being Davy Crockett.
Expand ...
Oh, we experienced a well pump fail 2 years ago. I enjoyed helping the well guy pull it up 240 fee of well column! (Thank God for Rhodes Pump Service!!). And pouring salt into the water system is no big deal.

But whe a toilet flush sounds like a 'gurgle gurgle' instead of a whoosh des make me cringe sometimes. And the methanic smell out front I blame on the wetlands across the street. Yeah, it's the wetlands!
 
.-.
uconnfan68 said:
My house is estimated at about what I paid 18 years ago... if I’m lucky. The market in my area is through the floor. And I’ve put $1000s into it. The houses for sale around me have been like that for months.
Expand ...
I'm guessing you are in/around CT. I had no idea value was that flat. That does suck as your home should be an investment. Sorry to hear that.
 
jleves said:
I usually don't bother to respond to people making idiotic comments on my posts, but really? That's what you have from my post? This isn't California and don't make over 250k in 2 years? Try harder. Or don't. Go find something else to do.
Expand ...

I was being kind only gently mocking your post.

Maybe advice like this is useful in California but this has no bearing on the reality of Connecticut:

Sell your first house in 2 to 5 years depending on market conditions. If you can get 250k in profit, it's not taxable. That profit is in your pocket tax free.

Spoiler alert: Here, if your house appreciates enough in 2-5 years to pay the realtor’s commissions you got lucky.

I guess you can ignore the dozens of people posting about the reality of real estate values in Connecticut and tell us about the benefits of tax free profits up to a quarter of a million dollars. Just like people all over the country get to tell us about attendance and UConn. Super accurate.
 
Funny part is throughout this whole thread no one has even mentioned how much of a pain in the ass it is buying a house with erything they ask of you/ ask to see non stop through the process up to closing. They need the stuff over and over again immediately and then take forever getting back to you on their end.
 
Dove said:
Septic systems have shelf life and can hinder house expansion. Nervous to own but it is nice to be self-reliant.
Expand ...
But really, with today's tech, septic systems are much more reliable, if you're reasonable about it.
Modern HE washers, flow restricted showers, low flush toilets. Really, even a septic field on its last legs should be able to be nursed along for a very long time. Rip out the food grinder in the sink and get a composter! I'm being serious.
If it's any consolation, every new install out here is either a sand mound (14k and hideous) or a chlorine treatment (20k and ridiculous). In grounds are being hounded out of existence by the .gov.
 
.-.
polycom said:
This thread has solidify my thoughts on renting for the foreseeable future.
Expand ...

As an old person I feel some responsibility to your generation.

Buying a house in Connecticut in 2018 comes with a negative expected value.

Unless you’ve got a spouse and kids combined with two solid well paying jobs do not invest in a house in Connecticut.

If you’ve got a spouse and children buy in a top 15 school system, that will limit your losses and you’ll get some ROI from the schools.

If you aren’t married and aren’t making incredible money get the hell out of here.
 
jleves said:
I'm certainly not a financial adviser and I have no idea about the conditions in CT, but I'm really surprised that your house has only appreciated 5% in 15 years. I know there was the bubble burst in that time but I thought most places had increased significantly since the bottom. I was fortunate that I got my home in 2010 and it's appreciated 80% since then. Even if I go back to the price it sold at in 2006 before the bubble, it's still up 30% since then. Add in the tax benefits of interest and property tax (which may be more limited in 2018) and the fact that when you sell, most or all of the profit isn't taxed and I can't see a reason not to buy a house if you can afford it.

My advice for a 25 year old person with the means to buy a house:
1) Get rid of all debt - particularly credit card debt. There's no reason to pay double digit interest on money you don't have. Low interest car or student loan debt is more tolerable but you still want to get rid of it as fast a possible. Pay off the higher interest debt first while maintaining the lower interest debt. Eat raman, get rid of as much of luxury things you can live without, put on a sweatshirt and turn down the heat and pay off as much debt as you can. You have your 40s and beyond to be comfortable.
2) As to the 50/30/20 rule, there's no reason to spend 30% on things you want at that age - lower it. Your late 20s early 30s will still be amazing without spending 30%.
3) Don't get married or have kids until you can afford it. You're going to live longer than you parents and way longer than your grandparents. 40 plus years with a spouse is more than enough - wait until you're 35 or so. Your kids will be out of the house when your 60-65 - that's good enough.
4) Go ahead and live with someone who can do 1) and 2) above until you're ready to have kids and can afford it.
5) If you can do 1) and 2) go ahead and buy a house as soon as you can. Buy the worst house you can afford and can fix up in the best neighborhood you can find. If you are handy, you can create at ton of equity/worth in a fixer - particularly if you don't have kids to deal with. Know your limits. It's stupid expensive to find contractors for things you can't handle.
6) Sell your first house in 2 to 5 years depending on market conditions. If you can get 250k in profit, it's not taxable. That profit is in your pocket tax free.
7) Take the profit and equity and buy the next worst house you can fix in the best neighborhood you can find. You have 5 years this time because you can only take the free tax from profit once every 5 years.
8) Rinse repeat buy, fix, sell every 5 years until you have enough money to buy the house you want to spend the rest of your life in. You can turn about 5 houses over between 25 and 47 or so. If you get married in that time frame, you take 500k in profit without taxes. If you do it right, by your late 40s, you can buy a great house with no mortgage.
9) Make sure you never get emotionally attached to a house so that you can't do the 5 year turn over. It's all a means to an end.

Good luck!
Expand ...
I know the market has been terrible for sellers in Northwest Connecticut for a longtime. New Yorkers aren't going up there to buy second homes like they used to and there is zero economy up that way, no young familes moving in. From all these posts it sounds like the whole state is dead which makes sense with all the economic problems and jobs leaving.
 
Condo's are ok until some major defect is uncovered and the entire community gets stuck with a huge assestment to make repairs.
 
This is one of the more interesting OT threads on here. Some great advice. There is a lot to consider. I've been through 2 home purchases and one vacation home, dealt with septic issues, major addition, learned about the reality of dealing with contractors, and expanded my expertise in numerous trades. Keep in mind your house will always have things to maintain, fix, and upgrade. One thing to point out is current interest rates are still historically low. This can make a big difference in affordability now and in the future. You will learn so much from this process and home ownership. Good luck.
 
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