Am I being ripped off on this house?

[jpg7n16]

Originally Posted by jimmyrules712

I make 75k and I'm paying 20% down on the house and I have no other debt and I'm doing a 15 yr loan. My fiance makes 35k. I've run the budget numbers shouldn't have problems paying it.

I like the idea of a second appraisal, I might do that. Although to be honest the lowest I could imagine it appraising for is $160k because I know of houses in town that have sold in the 130 to 150k range that are older and not even updated. If the worst happens and the market only values it at 160k or 170k when we try to sell down the road it isn't the end of the world, I'll still be above water on it and we aren't buying it as an investment.

yeah your income can def afford the place then. no issues there


and my 2nd appraiser comment was because I didn't notice you already purchased the home.

The title of the thread seems as though you're considering purchasing but haven't yet. "Am I being ripped off" = still looking to buy, "was I ripped off?" = already bought.

I did go back and see that you had it listed in your first post that you 'settled at $189k', but I must have just missed it. oops!


Somewhere I heard that you know it was a fair value, if the buyer wanted to pay a little less, and the seller wanted to get a little more. Usually if you're in the middle, the price is pretty fair. Seems like that's where you are at, so my guess (without specific knowledge) is that the $189k deal was a fair price. (you wanted a little less, they wanted a little more)

[MonkeyMama]

@ jpg7n16 - I think he is in escrow - sale is not final.

[jimmyrules712]

Originally Posted by jpg7n16

yeah your income can def afford the place then. no issues there


and my 2nd appraiser comment was because I didn't notice you already purchased the home.

The title of the thread seems as though you're considering purchasing but haven't yet. "Am I being ripped off" = still looking to buy, "was I ripped off?" = already bought.

I did go back and see that you had it listed in your first post that you 'settled at $189k', but I must have just missed it. oops!


Somewhere I heard that you know it was a fair value, if the buyer wanted to pay a little less, and the seller wanted to get a little more. Usually if you're in the middle, the price is pretty fair. Seems like that's where you are at, so my guess (without specific knowledge) is that the $189k deal was a fair price. (you wanted a little less, they wanted a little more)

I'm under contract but I haven't closed yet.

Your comment about fair value makes a lot of sense and that makes me feel better. I would have been very happy if I had gotten it for $10k less and the seller originally wanted $20k more. Assuming we don't try to move within 3 years it won't matter in the long run if we overpayed by $10k or not.

[zetta]

Like I said it's hard to do a comparison. All the homes in the same neighborhood are half the size and for the most part have not been updated since 1960. This house was practically gutted and renovated. The closest neighborhoods with new houses have the houses going for anywhere from $150,000 to $300,000 with sq footage ranging from 2,000 to 3,000. The only houses I've found that have anywhere close to my sq footage are brand new and thus not an apples to apples comparison. The only homes that are older are not as big and not renovated.

What the sellers paid for the house, and how much they paid for the renovations have little to do with what the house is currently worth. Today it's worth what a buyer (you) is willing to pay for it. Tomorrow it will be worth what the next buyer will pay.

There's a rule of thumb that says don't buy the biggest/most expensive house in the neighborhood. It's harder to sell, and you will get less for that house than you would if it were in a neighborhood of comparable houses. Second opinions from an independent appraiser and an honest real estate agent should be able to give you an idea of where you stand.

Is this your "forever" house that you plan to live in until retirement and beyond? Or is it likely you will be moving within 10 years for a better school district, career opportunities, etc.?

[jimmyrules712]

Originally Posted by zetta

There's a rule of thumb that says don't buy the biggest/most expensive house in the neighborhood. It's harder to sell, and you will get less for that house than you would if it were in a neighborhood of comparable houses. Second opinions from an independent appraiser and an honest real estate agent should be able to give you an idea of where you stand.

Is this your "forever" house that you plan to live in until retirement and beyond? Or is it likely you will be moving within 10 years for a better school district, career opportunities, etc.?

This is one of the most expensive houses in the neighborhood, and several others have told me the same rule of thumb, but I'm not sure it makes sense to me. Wouldn't the same rule of thumb of thumb be resulting in me getting a better house for the price than if i bought in a more expensive neighborhood?

[cschin4]

They did not make significant renovations and double the sq ft of the house for $25-50K!! LOL!

[WISEWOMAN]

Maybe the anxiety of purchasing your first home is overwhelming you. It's classic to second guess yourself. All you can do is rely on the home inspection, your realtor and the comps and your gut feeling about the house. I do recommend you double check the permits. I purchased my first home with the impression the addition to the garage was permitted. My realtor pulled the permits but when I went to sell, I found the city had pulled the permits for a home down the street with similar address (eg. 3320 instead of 3220) and my addition was not permitted.

Good luck!

[zetta]

Originally Posted by jimmyrules712

This is one of the most expensive houses in the neighborhood, and several others have told me the same rule of thumb, but I'm not sure it makes sense to me. Wouldn't the same rule of thumb of thumb be resulting in me getting a better house for the price than if i bought in a more expensive neighborhood?

Yes, you are getting a better house for the price. The trouble comes when you go to sell -- the next buyer will also expect a discount. You may have more difficulty finding a buyer, and may not get as much as you'd like for the house. If you love the house and plan to stay for awhile, I wouldn't worry about it.