Downsizing

[grumpy]

- Have our current home equity line limit increased to 200k and just right a check when we find the house we want, then sell existing house.

That's the way we did it. We settled on our new home on 1/25/05 and paid cash at settlement using a HELOC on our old home. We then settled on our old house a few days later. The second settlement paid off the outstanding HELOC balance (including a few days interest). It all went smoothly and cost was very low.

Grumpy

 

[P.S.]

sell FSBO (be honest, no caveat emptors), buy FSBO, pay cash.

 

[wabmester]

- Have our current home equity line limit increased to 200k and just right a check when we find the house we want, then sell existing house.

Probably not a big concern, but keep in mind that interest deductability only applies to the first $100K.

- Prequalify for interest only mortgage and use that to buy new townhome, then sell existing home and use proceeds to pay it off.

Loan closing costs could bite you.

- Make an offer on new townhome with qualifier that we'll pay for it as soon as existing home sells.

That's the traditional approach, but if the market you're buying in is "hot" then such a contingency could kill the deal.

 

[laurence]

Loan closing costs could bite you.

You can get a higher interest rate loan to make sure you have no closing costs. 2 months of an extra $40 bucks until you pay it off is nothing compared to 3 grand out of pocket. In fact, Etrade will actually pay you (give you credit) for taking a higher rate, You could get a check from them for 3 grand, agree to 3/4 point increase for a whole 2 months, pay off, and go on a vacation!

 

[TromboneAl]

For those of you who have a house larger than 3000 sq ft -- do you clean it yourself, or have someone come in?

 

[SteveR]

For those of you who have a house larger than 3000 sq ft -- do you clean it yourself, or have someone come in?

We both work and don't have time to do the major stuff so we have a lady who comes in once every two weeks for the heavy cleaning. I also have a crew that cuts the grass during the growing season that way I don't have to try to fit it into my schedule. After RE I will cut my own grass and we may reduce the housekeeping to once a month. We both have bad backs so paying someone to do the heavy stuff is more than worth it to us.

 

[renferme]

potential problem with a townhouse; see what kind of people are living next to you.
Young families with loud kids, or, are most of the other units rentals ?
What about the potential for big increases in the condo fee ?

 

[Sundance Kid]

I have lived in a townhouse complex, for ten years. Unless you spend a ton of money for attorneys to keep the by-laws up to date and have people that actually want to be involved in the operation, it can be a less than happy experience.

Everyone, eventually, will expect someone else to take care of all the little and big problems, while they sit on their collective butts!

Things wear out or get broken. Homeowner dues have to be increased, to offset normal cost increases and unplanned emergencies. No one expects to pay for any of that, from their own pocket. They expect the Townhome Association, to pick up the tab. But they do whine, when you raise their dues!!

You can't even get people to attend a homeowners meeting, to discuss anything, because they are afraid they'll be thrust into a position of some responsibility. It's just easier, to let someone else do it

Sorry this turned into a rant.

 

[Mr._johngalt]

potential problem with a townhouse;  see what kind of people are living next to you.
Young families with loud kids,  or,  are most of the other units rentals ?
What about the potential for big increases in the condo fee ?

Having bought my first condo, I was not familiar with "normal" condo fees.
We have good cash flow, even though the fee seems pretty high to me.
The association
is awash in cash. OTOH, they are quick to handle needed
improvements. Overall, I don't mind paying a bit more as long as I can see
the results.

JG

 

[HFWR]

See my post about "teams" in another thread...  

I like the idea of duplex/townhome/condo for retirement abode, for no/low maintenance, making life and travel easier. But the thought of someone living immediately underfoot/overhead/on the other side of the wall, gives me pause. Not to mention the association fees...

Hmmmmmmmmm??

 

[Mr._johngalt]

See my post about "teams" in another thread...  

I like the idea of duplex/townhome/condo for retirement abode, for no/low maintenance, making life and travel easier. But the thought of someone living immediately underfoot/overhead/on the other side of the wall, gives me pause. Not to mention the association fees...

Hmmmmmmmmm??

I know what you mean. In our case, we are on the 3rd floor of a 3 story condo.
Also, the front balcony wraps around 3/4 of our place. Thus, the only common wall is in the back. Plus, we have the best lake view in the building.
Some of this was just luck. Anyway, most units are owned by
"weekenders", so it's pretty quiet during the week.

JG

 

[HFWR]

Just love carrying groceries to the third floor. Once lived on the third floor of an apartment complex...and I was young, and in shape!

 

[Jarhead*]

Having bought my first condo, I was not familiar with "normal" condo fees.
We have good cash flow, even though the fee seems pretty high to me.
The association
is awash in cash.  OTOH, they are quick to handle needed
improvements.  Overall, I don't mind paying a bit more as long as I can see
the results.

JG

JG: What do your monthly fees run per month?

I assume they cover the exterior of the unit, etc. etc.

 

[Sundance Kid]

My problem with townhomes, is that after a few years; things that were absolute, in the bylaws and restrictions,when you purchased, are allowed to slide and no one seems to have the backbone to enforce anything anymore. Homeowner Directors change, develop different philosophys of what they will or not allow. Next thing you know, you're back in the projects again, where it's every homeowner for himself.

Homeowner dues, that you pay each month, for lawn maintenance, trash pickup, repairs of maintenance; will eventually increase, that's a given. So don't be taken in, by what they quote you today. If a major disaster occurs, even though you're not affected, you may be assessed a sizeable fee, to assist the Homeowners association, in paying the bill.

Things that look good today; low maintenance, nice new neighborhood, may change, in a few years, when owners start renting out their properties. It just takes one, to get it started. Daddy still owns the place, next to you, but he lets his college age son live there rent free. Think there might be a few parties?

Or Daddy's single daughter, with the three kids, moving in next to you. You can't make em move, Daddy owns it!!

What we should all have, in our desire for a perfect retirement home, is to have a neighbor, as nice and considerate as I am! :laugh Wish you all could be my neighbor!

 

[Cut-Throat]

Having bought my first condo, I was not familiar with "normal" condo fees.
We have good cash flow, even though the fee seems pretty high to me.
The association
is awash in cash.  OTOH, they are quick to handle needed
improvements.  Overall, I don't mind paying a bit more as long as I can see
the results.

JG

I am the President of our 14 unit Townhome Association. It is good to be awash in cash, as there are expenses down the road that Include New Roofs, New exterior siding, painting - Driveway repair and Landscaping.

You don't want a meager cash balance, requiring assements as needs come due!  - Try to collect then - What a pain in the ass!

 

[Sundance Kid]

Cut-Throat:

I am the President, of a 11 unit Townhome complex. Not President by design, I just can't get anyone to take the job! Can't get people to come to meetings, to discuss anything, can't get people out of their houses, don't respond to directions, don't offer suggestions. Just wanna be left alone and let somebody else do it!

Alot of things have been neglected here, over the years. The only way I've found to get it done, Is Just Do It. So far we've been lucky, that we've had enough in the "kitty." to cover the surprise expenses. Now. If we have another ice storm, like last year, or our property insurance takes another huge leap, don't know what will happen.

When I came into this community, 10 years ago,; our monthly dues were $47.50, per month. They are now $85.00 and we are putting some money into our reserve. We are a long way, from being able to pay for the things that need be done!

I'd be interested in knowing more about you're situation. Feel free to contact me and let's discuss!

 

[Mr._johngalt]

JG:  What do your monthly fees run per month?

I assume they cover the exterior of the unit, etc. etc.

Condo is 1000 SF, monthly dues $210. A large swimming pool runs it up a bit.
Covers all common areas, exterior, insurance, landscaping, trash hauling,
etc.

JG

 

[Nords]

Our first Hawaii home's HOA had raised dues to $90/year just before we bought the place. That pays for gardening the common areas (mostly medians & sidewalk landscaping) and the walking trail.

16 years later the dues are still at $90/year. The state condemned some common property for a road expansion about 10 years ago (big payoff) and the reserves for a planned recreation center were absorbed back into the budget when the state built a huge park across the street. So all of the projected improvements have been taken care of by our local govt.

Homeowner voting, let alone meeting participation or board service, is so low that a couple years ago the CC&Rs were modified to allow a 35% vote to be the majority. The board had already sewn up the proxies when one meeting attendee asked what would happen if there were 36% "Yes" votes but 37% "No" votes. After a little modification to the original proposal to handle that "oops", it still passed. So our majority vote is only 35%.

And in case you're wondering, no, I don't serve on that homeowner's board. It's a thankless task, I've served my time, I have better ways to spend it from now on.