Priced right REOs are moving fast

Shelly are you Dave Ramsey ?

No, but I agree that for the most part he makes sense (it's not new stuff that he's putting out there, it's just that it's the first time this generation has ever heard about the concept of being financially responsible by "saving money and paying off debt" :shock.

.

What does 5 out of 10 get me? 6 if I just resolve to let my mom fend for herself.

Which 4 are you missing on?

Still, I don't think you're factoring in the mental anquish of moving, the expense of boxes and tissue paper as the homes are foreclosed on in succession, or my need to plant a garden and have a place to bury my dogs.

.....neither did the folks who've overextended themselves on the "must have NOW(!) American Dream" home they're upside down on and have been trying to unload for the past 425 days. Now they're reduced to exhuming Spot and Puff and burying St Joseph statues in their place.

...and they're needing to buy boxes and tissue paper too!

.

.

Shelly, I wish you would teach a class at South Walton High. It would be great for our kids to have a better grasp of fiscal responsibility.

Shelly, I wish you would teach a class at South Walton High. It would be great for our kids to have a better grasp of fiscal responsibility.

First one must teach the parents. :roll:

.

Correctamumdo! Maybe I'll audit the class.

Correctamumdo! Maybe I'll audit the class.

Don't use the "a" word in the real estate forum. Makes some of the realtors nervous. ;-)

Which 4 are you missing on?



.....neither did the folks who've overextended themselves on the "must have NOW(!) American Dream" home they're upside down on and have been trying to unload for the past 425 days. Now they're reduced to exhuming Spot and Puff and burying St Joseph statues in their place.

...and they're needing to buy boxes and tissue paper too!

.

.

You are completely wicked. Maybe you should design a portable pet mausoleum and capitalize on the situation! ;-)

The problem at this point is not so much not being able to swing the house...there are houses out there that would work. The problem is not wanting to see the house across the street that's bigger and has better countertops sell for a year's salary less in a year or so. It's the fear of being trapped if some unexpected thing we can't predict happens, I mean, there's being cautious, and then there's being paralyzed with fear of the unknown. Just trying to figure out where we are on that spectrum...

You are completely wicked. Maybe you should design a portable pet mausoleum and capitalize on the situation! ;-)

The problem at this point is not so much not being able to swing the house...there are houses out there that would work. The problem is not wanting to see the house across the street that's bigger and has better countertops sell for a year's salary less in a year or so. It's the fear of being trapped if some unexpected thing we can't predict happens, I mean, there's being cautious, and then there's being paralyzed with fear of the unknown. Just trying to figure out where we are on that spectrum...

Good grief, have I taught you nothing about deceased pets? There are options to burying. Just be glad the little boxes are no longer in my kitchen cupboard.;-) They now oversee my laundry problem in the closet. My little laundry angels.

You are completely wicked. Maybe you should design a portable pet mausoleum and capitalize on the situation! ;-)

The problem at this point is not so much not being able to swing the house...there are houses out there that would work. The problem is not wanting to see the house across the street that's bigger and has better countertops sell for a year's salary less in a year or so. It's the fear of being trapped if some unexpected thing we can't predict happens, I mean, there's being cautious, and then there's being paralyzed with fear of the unknown. Just trying to figure out where we are on that spectrum...

Funny how the mind works isn't it? Before I bought I was worried about the market rebounding and pricing me out of buying. Now that I have bought I am petrified that the market will continue to fall locking me into a lemon. I guess thats where the "5 year stay" comes in and actually living in the residence as opposed to being an investment.

Good grief, have I taught you nothing about deceased pets? There are options to burying. Just be glad the little boxes are no longer in my kitchen cupboard.;-) They now oversee my laundry problem in the closet. My little laundry angels.

I shan't burn the beloved Baby Prince Patrick nor my Ellie Belly. I'm going to have to drive the freaking dog to freaking Columbus, and I am going to need Zoloft for years after that nightmare. My god, I'm going to have to have a dog coffin. I can't deal with rigor mortis in my babies. Not without electro-shock.

I'm making a joke here, but at the same time it's making me cry. This is all just insane. :roll:

It would be so much easier if houses really were just commodities.

You are completely wicked. Maybe you should design a portable pet mausoleum and capitalize on the situation! ;-)

The problem at this point is not so much not being able to swing the house...there are houses out there that would work. The problem is not wanting to see the house across the street that's bigger and has better countertops sell for a year's salary less in a year or so. It's the fear of being trapped if some unexpected thing we can't predict happens, I mean, there's being cautious, and then there's being paralyzed with fear of the unknown. Just trying to figure out where we are on that spectrum...

Once you make your decision and act on it... just stop shopping the "sale racks". You'll just make yourselves unnecessarily crazy (truly... you have to do this always... not just this market). And if you absolutely can't stop yourselves from shopping the sale racks & looking over your shoulders after the fact...
then vow to focus on all the good you will have experienced for that one year in the home of your choice... like gardening & planting your loved ones, painting the rooms the color of YOUR choice, tax deductions, etc.

Also if you can make the monthly debt ratio work, 15 year mortgages have some nice features like seeing a real reduction in principal from the first payment. 30 year notes frontload the interest so much that the balance barely goes down for the first 10+ years.

You can 'fix' #4 <Able to find a home that costs 2.5x but no more than 3x gross income> in a few ways:

(1) Make a bigger down payment and bring down the cost of the home (make sure you recalculate #2 (liquidity) accordingly if you're using reserves as your source.

(2) Keep low-balling the sellers until someone is desperate enough to bite on your offer.

(3) Increase your gross income by saying goodbye to "life as you know it" and increase work hours or get additional jobs.

(4) Decrease your debt ratio by selling off the leveraged "toys" and applying the resulting cash and any loan payments into the purchase of the house.

(5) Reprogram your brain to accept the fact that current local house prices or your "dream house" may be out of reach for the moment; keep saving and enjoying your life now as you work toward your goal.

My "fix" is to buy land and build my own home so I get the features and quality level I want instead of overpriced spec crapola!

As far as the others, I already work 2 jobs, have zero debt and my only "toys" are my 7 year old car and a secondhand bicycle!

It's the fear of being trapped if some unexpected thing we can't predict happens, I mean, there's being cautious, and then there's being paralyzed with fear of the unknown. Just trying to figure out where we are on that spectrum...

You are just uber-risk averse (which isn't entirely a bad thing); it means that it's more important to your well-being that you're confident with the financials before you make the leap.

Personally, I bought my home to 'live in'--imagine that! It wasn't until the RE frenzy that people started being fed the crappola that your primary residence is an "Investment." I can't tell you the number of times my home or homes around me have gone up and down in price--that's because I really don't give a damn. I've neither been overly excited nor heart-sick about the changing "value" of my primary home throughout the rise and fall of the RE bubble.

The market and the economy is in turmoil at the moment, so you are not alone in your feelings. Take this time to get educated on everything dealing with purchasing a home (Homebuying or Mortgages for Dummies might be a good start). That way, you'll build your confidence when the time comes to sign your name on the dotted line and you won't be vulnerable to the recommendations made by the market "experts."

Might I suggest another excellent book I'd recently read: "Save Now or Die Trying: Achieving Long-Term Wealth in Your 20s and 30s" by Mark Bruno. An easy enjoyable read about saving for retirement. http://www.sowal.com/bb/newreply.php?do=newreply&p=421774

In the meantime, pop a cold one and take a walk on the beach and count the blessings you've got.

Shel.

.

Also if you can make the monthly debt ratio work, 15 year mortgages have some nice features like seeing a real reduction in principal from the first payment. 30 year notes frontload the interest so much that the balance barely goes down for the first 10+ years.

The difference in rate between the 30 and 15 over the last years, has never been substantial enough to warrant taking a 15 yr. on a purchase, especially for first time home buyers. One never knows when illness, job loss, and change in family circumstances occur, and making that 30 year payment vs. the 15 is going to be a life saver. If you work out the numbers, the earlier payoff isn't substantial enough to warrant taking the chance. The only time it makes sense is on a refinance, in some cases, or, when the spread between the 30 and 15 is substantially wider.
I would rather see someone go into one of those accelerated bi-monthly programs on a 30 to pre-pay faster vs. taking a straight 15 yr., with no options but to make that payment or refinance. If personal catastrophe is involved, refinancing may not be an option.

My family typically gets a 30 year mortgage and then pays it off in 10 or 15.

The thinking is that you can always pay MORE, but it's better to be conservative in case of an emergency or change in circumstances.

You are completely wicked. Maybe you should design a portable pet mausoleum and capitalize on the situation! ;-)

The problem at this point is not so much not being able to swing the house...there are houses out there that would work. The problem is not wanting to see the house across the street that's bigger and has better countertops sell for a year's salary less in a year or so. It's the fear of being trapped if some unexpected thing we can't predict happens, I mean, there's being cautious, and then there's being paralyzed with fear of the unknown. Just trying to figure out where we are on that spectrum...

As far as seeing some uber deal at some point is going to happen after you buy. Guaranteed no questions ask it will happen. It's right up there with things like the first thing to break on a new car, the first scratch on new furniture, or, my all time favorite, pricing on the iPhone.

My family typically gets a 30 year mortgage and then pays it off in 10 or 15.

The thinking is that you can always pay MORE, but it's better to be conservative in case of an emergency or change in circumstances.

(Make sure you read the fine print to be sure your mortgage doesn't have penalties for early pay off. BofA currently has nice no fees, no early pay off penalty 15 or 30 years available for example.)

(Make sure you read the fine print to be sure your mortgage doesn't have penalties for early pay off. BofA currently has nice no fees, no early pay off penalty 15 or 30 years available for example.)

Definitely - also why we deal w/ local banks instead of giant corporations. I'm really bummed that my hometown bank can't do a lot loan or mortgage for me here, but their crazy policies like not lending outside the county, treating their clients well, and avoiding sub-prime are why they do so well.

Definitely - also why we deal w/ local banks instead of giant corporations. I'm really bummed that my hometown bank can't do a lot loan or mortgage for me here, but their crazy policies like not lending outside the county, treating their clients well, and avoiding sub-prime are why they do so well.

scooterbug - this is something I've been wondering about. I've always gone through BofA simply becuase they have been my bank for years. I get the good service argument, but are there also big financial advantages to local banks over a big bank like BofA?

All I know is that I've banked with them while living in 2 other states and a foreign country because their level of service is so great.

The fees, low interest, and lack of service I've experienced with other institutions would make Shylock proud. If my one branch bank doesn't have to charge me an ATM fee in Austria, I don't feel that I should pay for using one in a bank's own lobby because they also charge for a teller! The credit card which AUTOMATICALLY sets up your payment to be late and charge you a fee if you pay online was another shock.

I haven't paid a fee to them in over a decade for credit cards, ATMs, they pay my postage to bank by mail, get a great interest rate, and I can pick up a phone and immediately talk to a person!

They're in it for the long haul, not the quick fee that screws the customer. For example, one time I called to check an account balance and they told me I needed to put it in a different account so I'd get more interest. Mom got a call because her employer's automatic payment system was wrong and they didn't want her to have a bunch of overdraft fees or returned checks. They lost out on a couple fees but kept lifelong customers happy.

I hate this market. I really do.

Any serious buyer should be loving this market, not hating it.

First one must teach the parents. :roll:

.

We disagree so much on this idea. People get a little more than stuck in their own mental limitations and fear of change. If anyone can teach the parents, it is the children, but first, the children must me taught. ;-)

We also disagree about housing being an investment. I guess you just write it off as an expense? It is an expense, very much like rent, but it may also be an investment, as there is potential risk, up or down, involved, and rent doesn't have that risk.

When we refinanced from a 30 year note to a 15 year, we cut our rate from 7% to 4.8%, and the amount the monthly payment went up was pretty negligable in gross income terms.

As for local lenders, if you're part of a membership class for one of the local military credit unions, (and membership class has come to mean you live or work somewhere in all of Walton or Okaloosa County) then they're often very good with customer service because they had to build their business competing with USAA, who gets many a rave over customer service. We bank and borrow from Eglin FCU, and they were grayt to work with on our mortgage and do very well on the day to day stuff.

We also disagree about housing being an investment. I guess you just write it off as an expense? It is an expense, very much like rent, but it may also be an investment, as there is potential risk, up or down, involved, and rent doesn't have that risk.

An "investment" is using money for the purpose of making more money. An "investment RISK" is the potential of one's investment to go up or down.

Yes, I believe a primary home IS an expense...one must live somewhere. And unless one is a "investulator," and is leveraged to the eyebrows in a hot housing market, most folks who've been living in their homes a long time and then sell will find that when they add up ALL the costs of primary homeownership...not just Purchase Price - Selling Price = Profit, they've made only very modest returns vs. other asset classes.

<However, this does discount the satisfaction of having access to one's personal pet cemetary.>

.


.

An "investment" is using money for the purpose of making more money. An "investment RISK" is the potential of one's investment to go up or down.

.

So when you bought your house, you didn't care about the things which play into the resale factor?