Real estate General topic

[Sigarms]

Definitely. Paying off early is the best way to save, even if you're suffering the higher rates of a 30-year fixed mortgage.

Round numbers, borrow $500k at 3.5% for 30 years, you're looking at paying back $808k, so $308k in interest alone. Pay that off in just 15 years, and total cost drops to $643k... you just saved yourself $165k.

But if you believe you can swing 15 years, you can save even more by signing for a fixed 15-year mortgage, as their rates are lower. In that case, your total cost might be only $600k, or $208k saved over a regular 30-year fixed term.

The bigger part of the savings is what sigarms did, just paying early. But the additional $43k saved by dropping to a 15-year's rates isn't exactly throw-away money, either.

The numbers I'm using above are admittedly dated, but do well to demonstrate the point. I think I got my 15 year mortgage at 2.125% in 2012, and 30-year was running at least 1% higher, at the time. If the rates are higher today, then even more important.

We would have done a 15 year for the home and 6 acres. It was possibility of adding an additional 30 acres that had us scared. Reality is though we fell in the love the 37 or so acres more than the home.

Have to remember, we had to sell a house after we bought this house with 6 acres. Then, if we sold the house, we would buy the additional land.

Went to the doctor because I thought I was having a heart attack...

Did you change jobs in the recent past? YES
Did you have a life changing moment in the recent past? Getting married, YES. Buying a new home and having two mortgages, YES.

Doctor laughed. Still took the test, apparently wasn't a heart attack, but stress.

First 5 or 6 years, loved the land. Then for about 5 years after that, was regretting having that additional payment on the land. Now that everything is paid off, I am forever grateful the one word of advise people gave me... if you can afford it, they aren't making land anymore so buy it if it's with the home.

 

[ultrarunner]

My mortgage is 2.75 fixed and rule of 78,s 360 day yearly schedule where interest is front loaded and less as a percent as it winds down.

I’m getting 5% taxable from the bank on money I could use to pay off the mortgage which at this point in the loan is closer to 2%.

So keeping it for now.

 

[ericm979]

Paying off early is the best way to save

Unless your loan rate is well below the rate of return of your investments. Then it's better to invest the money instead of paying the loan down early. The long term average rate of return in the stock market is somewhere between 7 and 10% depending on how you count it. If your loan's 3% and you have a reasonably long time frame, its likely better to put that money in the market than into paying the loan off early.

Of course the market could go down, but so can the value of the house. Neither one is risk free.

It's probably not a common situation historically to have loan rates that low, but they were for a number of years not long ago.

 

[ning]

My mortgage is 2.75 fixed and rule of 78,s 360 day yearly schedule where interest is front loaded and less as a percent as it winds down.

I’m getting 5% taxable from the bank on money I could use to pay off the mortgage which at this point in the loan is closer to 2%.

So keeping it for now.

You may want to check the terms of that loan again - it's highly unlikely that you have a long-term loan that's rule of 78s as they've been illegal for loans over 5 years (actually 61 months) since '92 - so unless it was a 40-year mortgage you took out before 1992....

 

[ultrarunner]

You may want to check the terms of that loan again - it's highly unlikely that you have a long-term loan that's rule of 78s as they've been illegal for loans over 5 years (actually 61 months) since '92 - so unless it was a 40-year mortgage you took out before 1992....

No… it is my mortgage and it is 5 year term.

My monthly is $4500 with my last payment $4500.01 in 2026

I guess I have a 1 cent balloon on the last payment?

I was considering just paying it off this December but when I looked at the provided amortization table and what I was getting on the 12 month CD there really was not the incentive to retire it.

Dave Ramsey would not be happy but I am ok with having a single debt and it being a First Deed of Trust at 2.75 interest.

Is there something I am missing?

 

[paulsharvey]

Actually asked wife this afternoon, house tour 1, they have dropped the original asking by $60k (although they look the back 3.5 acres out of the offer), if they drop again, say another $20k, should we call and offer them our original offer again, with all 13.5. and no closing costs on them? She said, she was looking at it again, and kinda wondered the same thing.

Her turn off on that one, was, she didn't like the floors, in like 3 rooms, wanted to repaint through out, And no porches, no sheds, basically a home, a sand yard, and 13.0 acres of overgrown property. I kinda pointed out, if we save $50k on it, and spend $25k on whatever we want to do to it, we would still be money ahead.

If they keep dropping price, we might reoffer, BUT, only if we could get the whole 13.5.

At this point, they are asking $20k less for home and 10.0 acres than we offered for home and 13.5; and that 3.5 is just wet, overgrown, woods, backing upto a pine plantation.

 

[Sigarms]

Actually asked wife this afternoon, house tour 1, they have dropped the original asking by $60k (although they look the back 3.5 acres out of the offer), if they drop again, say another $20k, should we call and offer them our original offer again, with all 13.5. and no closing costs on them? She said, she was looking at it again, and kinda wondered the same thing.

Her turn off on that one, was, she didn't like the floors, in like 3 rooms, wanted to repaint through out, And no porches, no sheds, basically a home, a sand yard, and 13.0 acres of overgrown property. I kinda pointed out, if we save $50k on it, and spend $25k on whatever we want to do to it, we would still be money ahead.

If they keep dropping price, we might reoffer, BUT, only if we could get the whole 13.5.

At this point, they are asking $20k less for home and 10.0 acres than we offered for home and 13.5; and that 3.5 is just wet, overgrown, woods, backing upto a pine plantation.

Stick to your plan.

This was a modular correct? You might of mentioned it, but what is the asking price?

For all the looking around I've done, it seems like modulars are where the sellers are smoking the most dope because it has some land per asking price, at least in my area.

There was one in SC that had like 15 acres and they wanted 500k for the land with a modular on it. I looked at comparable land prices in the same town and would have been better off buying 5 acres and building...

 

[paulsharvey]

Stick to your plan.

This was a modular correct? You might of mentioned it, but what is the asking price?

For all the looking around I've done, it seems like modulars are where the sellers are smoking the most dope because it has some land per asking price, at least in my area.

There was one in SC that had like 15 acres and they wanted 500k for the land with a modular on it. I looked at comparable land prices in the same town and would have been better off buying 5 acres and building...

The original asking was $420k for the modular and 13.5; now they are asking $359 for the modular and 10.0.

I'm no expert, but I do try to follow manufactured home prices; and sure, there are some home by its self well over $300k; these we have looked at are available for $180-225k for the home.

I do get the convenience and all, and the easier fiancing; but I do have trouble understanding the Huge number of $40-60k 2 acres properties with a $150k manufactured, selling for $350+. I understand the added value of say a carport, or garage, or fencing; but that doesn't ads $50-100k of value to a package.

 

[ericm979]

Septic, well, driveway and foundation for the manufactured home all add to the value. Not needing to get a permit for putting in a new house can be valuable.

 

[2manyrocks]

The original asking was $420k for the modular and 13.5; now they are asking $359 for the modular and 10.0.

I'm no expert, but I do try to follow manufactured home prices; and sure, there are some home by its self well over $300k; these we have looked at are available for $180-225k for the home.

I do get the convenience and all, and the easier fiancing; but I do have trouble understanding the Huge number of $40-60k 2 acres properties with a $150k manufactured, selling for $350+. I understand the added value of say a carport, or garage, or fencing; but that doesn't ads $50-100k of value to a package.

It's problematic for any of us living elsewhere in the USA to really know what your local real estate market conditions are today. There are areas that are cooling off and some areas that maybe aren't, just yet. Whatever the local real estate market may be today, it could take a tumble if the economy falters and people in your area start losing their jobs.

I don't know how the seller set their original asking price or when they set it. Did they set it based on the top of the market when mortgage interest rates were 2%-4%? As for the 3.5 acres they've now decided to hold onto, how does that affect the use of the rest of the property? Is there a chance that the 3.5 acres could be sold to someone who will later do something that decreases the value of the 10 acre tract? Are these deed restrictions on how the 10 acres/3.5 acres can be used? (A local guy built a very nice brick house on his lot, but the lot right next door was sold to someone who put a house trailer on it).

 

[paulsharvey]

It's problematic for any of us living elsewhere in the USA to really know what your local real estate market conditions are today. There are areas that are cooling off and some areas that maybe aren't, just yet. Whatever the local real estate market may be today, it could take a tumble if the economy falters and people in your area start losing their jobs.

I don't know how the seller set their original asking price or when they set it. Did they set it based on the top of the market when mortgage interest rates were 2%-4%? As for the 3.5 acres they've now decided to hold onto, how does that affect the use of the rest of the property? Is there a chance that the 3.5 acres could be sold to someone who will later do something that decreases the value of the 10 acre tract? Are these deed restrictions on how the 10 acres/3.5 acres can be used? (A local guy built a very nice brick house on his lot, but the lot right next door was sold to someone who put a house trailer on it).

The bottom part, about the 3.5 acres; 100%. It's only access would be a recorded easement (existing) right across the center of the 10.0 acres, about 40 ft from the home. That's why we dug our heels in on him keeping the back 3.5, and ended up no excepting his counter offer.

Our local market is, hmm, odd? We have a mix of very very low end (sub $65,000 for a run down manufactured and 0.25 acres, on terrible roads, next to some crappy van with 13 people in it) too quite a few, $1.5m places that are general something like a 3500 sq ft semi custom on 5-50 acres. I dont see radical shifts in general pricing; However, it seems stuff is sitting for sale. IMO, sellers still have 2 years ago prices in their minds, and people aren't paying that right now. They still don't want to drop the price. All of this, often within a mile or two of each other.

My current neighborhood, we have multiple Home Depot Handi-house, with a conversion van and or old camper; to stuff that sells for well over $750k. Properties in current neighborhood run 1.5 acre to 5 acre (like 2 or 3 have combined 2-5 acre peices); and the raw, unimproved lots sell for between as low as $9k/acre to people asking $85k for 2 acres.

The place we just looked at Friday was in an ok area; mixed older manufactered that maybe where a bit run down, mixed in with some newer equestrian homes, site built or manufactured. But, 500-1000 ft through the woods, a rather distressed, much older subdivision of older and very run down places.

 

[paulsharvey]

Within 3 miles of me; I currently see a $155k double wide on 2.5 acres of sand yard, a $900k site built (less than 10 years old) on 20 acres, and a $1.15m site built on 5 acres. I also see 5.0 acres of vacant for $69k; within spitting distance of 2.0 acres for $75k. If I go out about 5 miles; I find 19.0 acres of pasture for $190k, across the street from a 3.59 acre piece for $160k.

 

[2manyrocks]

I think we are beginning to see the tipping point in middle Tennessee where homes are starting to sit on the market and sellers are having to make some modest price adjustments and/or concessions.

A large part of the problem is the Fed distorted the entire US residential real estate market in a way that there has been a disconnect between home prices versus what people can afford. If they try to print their way out of this, it will only make that disconnect bigger. If people can't afford to buy and sell homes, the market will stagnate until either wages catch up or prices/interest rates come down.

Considering that residential real estate prices increased about 50% between late 2019 and 2023 where wages certainly didn't, it seems to me that the fundamentals are saying things can't stay the way they are.

 

[Sigarms]

The bottom part, about the 3.5 acres; 100%. It's only access would be a recorded easement (existing) right across the center of the 10.0 acres, about 40 ft from the home. That's why we dug our heels in on him keeping the back 3.5, and ended up no excepting his counter offer.

Our local market is, hmm, odd? We have a mix of very very low end (sub $65,000 for a run down manufactured and 0.25 acres, on terrible roads, next to some crappy van with 13 people in it) too quite a few, $1.5m places that are general something like a 3500 sq ft semi custom on 5-50 acres. I dont see radical shifts in general pricing; However, it seems stuff is sitting for sale. IMO, sellers still have 2 years ago prices in their minds, and people aren't paying that right now. They still don't want to drop the price. All of this, often within a mile or two of each other.

Am I correct in assuming that the purple box represents the 3.5 acres and red arrow is point to the home on the land?

If that is the case, personally there is no way I would even consider the property given an access road is only 40' from the house.

Out of curiosity, assuming I'm correct about the location of the 3.5 acres, and I don't know the answer but assume it would be a yes, any chance of finding out when that 3.5 acres was drawn up and divided (or if it was bought that way).

We are officially on a 5 year plan to move, and part of one thing we have to do is figure out how we want to sell our house and perhaps subdivide the land for sale. Our issue is how we want to do that. The tract that the house sits on is around 6.5 acres, and the other tract around 31.5 acres. The issue is it makes the most sense to divide it into two tracts, one around 17 that the house sits on, then around 20 acres that is on the other side of the creek. Our hope would be to sell the house with 17 acres and build on the 20 acres or so, but given the layout of the land, seems to be to many potential issues building at the top of a hill and have the lower area get really wet in heavy rains (as far as building a road).

I'm just wondering if the homeowner whose house and property subdivided the land this way to create a bargaining chip? I could kind of do the same thing to an open field on the 17 acre tract we could create, but doing do would mean an easement to access that property, and even though I consider myself a ***** head at times, I wouldn't do it.

What if someone wants decides they want to build back there on those 3.5 acres, could they do it? Out of curiosity, where would the easement road lie?

Last night took my wife out for dinner. Have to spend money on a new electric stove countertop with exhaust as our current one if finally giving up the ghost. Fell over dead looking at pricing. Question becomes how much to spend on the house to sell over that 5 years. For the first time, we actually talked about just converting the garage to bedroom / bathroom combo so we only have to deal with the first floor. Only downside is what we spent on the master and guest bedroom on the second floor. That said, invest in a full bath and bedroom, add a detached 2 car garage from the house, and I'd guess we would get our investment back if we decide to die in the home. But 20 -30 years from now, who knows although it would seem like a good bet.

Sorry for rambling and taking away from your thread, but kind of in the same boat looking.

And you're correct, your area in Florida is kind of all over the place. Out of curiosity, decided to look for myself.

 

[WinterDeere]

A large part of the problem is the Fed distorted the entire US residential real estate market in a way that there has been a disconnect between home prices versus what people can afford. If they try to print their way out of this, it will only make that disconnect bigger.

I'm glad people are starting to get this. But let's face it, inflation really is the government's only way to pay down the massive relief bills passed over the last 4 years. And that's not politics, as we know the first of them were passed prior to the current administration. The fed is not a business, it makes no money, other than that they literally print.

In other words, "Owe a few $Trillion? Just devalue it."

 

[paulsharvey]

Am I correct in assuming that the purple box represents the 3.5 acres and red arrow is point to the home on the land?
View attachment 879110

If that is the case, personally there is no way I would even consider the property given an access road is only 40' from the house.

Out of curiosity, assuming I'm correct about the location of the 3.5 acres, and I don't know the answer but assume it would be a yes, any chance of finding out when that 3.5 acres was drawn up and divided (or if it was bought that way).

We are officially on a 5 year plan to move, and part of one thing we have to do is figure out how we want to sell our house and perhaps subdivide the land for sale. Our issue is how we want to do that. The tract that the house sits on is around 6.5 acres, and the other tract around 31.5 acres. The issue is it makes the most sense to divide it into two tracts, one around 17 that the house sits on, then around 20 acres that is on the other side of the creek. Our hope would be to sell the house with 17 acres and build on the 20 acres or so, but given the layout of the land, seems to be to many potential issues building at the top of a hill and have the lower area get really wet in heavy rains (as far as building a road).

I'm just wondering if the homeowner whose house and property subdivided the land this way to create a bargaining chip? I could kind of do the same thing to an open field on the 17 acre tract we could create, but doing do would mean an easement to access that property, and even though I consider myself a ***** head at times, I wouldn't do it.

What if someone wants decides they want to build back there on those 3.5 acres, could they do it? Out of curiosity, where would the easement road lie?

Last night took my wife out for dinner. Have to spend money on a new electric stove countertop with exhaust as our current one if finally giving up the ghost. Fell over dead looking at pricing. Question becomes how much to spend on the house to sell over that 5 years. For the first time, we actually talked about just converting the garage to bedroom / bathroom combo so we only have to deal with the first floor. Only downside is what we spent on the master and guest bedroom on the second floor. That said, invest in a full bath and bedroom, add a detached 2 car garage from the house, and I'd guess we would get our investment back if we decide to die in the home. But 20 -30 years from now, who knows although it would seem like a good bet.

Sorry for rambling and taking away from your thread, but kind of in the same boat looking.

And you're correct, your area in Florida is kind of all over the place. Out of curiosity, decided to look for myself.

Actually, the purple box is like a 1.5 acre unaffiliated parcel owned by someone in Philly. The entire back "L" is the 3.5 acres; the main Square of the property is the 10 acres, and yes, that is the home. As to when it was subdivided, something like 20 years ago. The current owner owns both parcel A (10.0) and Parcel B (3.5). That Parcel C in purple was once part of the parent propety, and the plan would be eventually to purchase it, just to eliminate the possibly of future extra neighbors

 

[dmccarty]

I'm glad people are starting to get this. But let's face it, inflation really is the government's only way to pay down the massive relief bills passed over the last 4 years. And that's not politics, as we know the first of them were passed prior to the current administration. The fed is not a business, it makes no money, other than that they literally print.

In other words, "Owe a few $Trillion? Just devalue it."

Years ago, maybe decades at this point, I read an article from Warren Buffet about how the US would pay down the national debt. The answer was inflation which allows the US paying off old debt bought with expensive dollars with a cheaper dollar.

We have a huge debt issue, that along with other issues, have never happened in history. Other countries are doing the same thing, and how this works out is anyone's guess, but it is not going to be pretty when the party ends.

 

[Jstpssng]

What I don't understand; every week we get an industry newsletter which includes wholesale lumber prices on the Boston Market. Since the end of last year these have been hovering around what they were 4 years ago. Right now they are lower than they've been since April 2019, and are still dropping.

 

[2manyrocks]

I don't know the lumber market well enough to say, but when I sold a walnut log about two years ago I didn't think I got much for it considering it took 40 years to grow it.

 

[WinterDeere]

What I don't understand; every week we get an industry newsletter which includes wholesale lumber prices on the Boston Market. Since the end of last year these have been hovering around what they were 4 years ago. Right now they are lower than they've been since April 2019, and are still dropping.

I'll try and steer this as far from politics as I can, while explaining that situation:

1. USA and Europe support Ukraine's defense against Russia
2. Russia cuts off oil supply to Europe
3. Europe gloms onto sources traditionally supporting USA fuel consumption, and our prices spike
4. Inflation already high, with potential for fuel price surge to make it much worse
5. Current administration responds by selling off strategic oil reserve (40% in 2023 alone!)
6. New oil flooding into market from strategic reserve keep gasoline prices below expectation
7. Fuel-intensive commodities (eg. lumber) benefit

But what happens when it's time to replenish the strategic oil reserve? Will it ever happen?