I am terrified of getting a mortgage

[UnrealizedPotential]

I'm thinking sell the condo, get the best price you can. Take out a mortgage for the difference. My reasoning is rates are low and you never want to take money out of investments that are compounding if you can help it. It's just too hard to make it back. Just my thoughts.

 

[HawkeyeNFO]

If I was buying a condo, what would lead me to believe that yours was a good deal?

Not trying to be an ass, but a serious potential buyer would look into the status of the condo association, and will certainly find out about elevators that don't work as well as the stench of uncollected garbage. Since you can't control those without a massive investment of your time or money, the only real lever you can pull to sell your condo is to decrease the price.

Then consider that the low rates on mortgages today mean that you can very cheaply get a lot of money to your new house. If you can get a mortgage rate of 3.5% from a bank, and expect 7% back on your investments, then it's a no brainer.

 

[COcheesehead]

If I was buying a condo, what would lead me to believe that yours was a good deal?

Not trying to be an ass, but a serious potential buyer would look into the status of the condo association, and will certainly find out about elevators that don't work as well as the stench of uncollected garbage. Since you can't control those without a massive investment of your time or money, the only real lever you can pull to sell your condo is to decrease the price.

Then consider that the low rates on mortgages today mean that you can very cheaply get a lot of money to your new house. If you can get a mortgage rate of 3.5% from a bank, and expect 7% back on your investments, then it's a no brainer.

So you're saying we should all go borrow money and put it into the market?

 

[HawkeyeNFO]

So you're saying we should all go borrow money and put it into the market?

Your words. Not mine. Nice try.

 

[Karloff]

Thank you all for your feedback! Please do keep it coming. A lot of food for thought.

Some key notes from my end:

- Renting the condo is not an option. As many of you said, I am not the landlord type.

- Selling, putting the cash in the bank and renting in the meantime is also not an option, since I work from home and do need my own office space. This is one of the main reasons why we want to buy a house. Plus, I do not think we can take the stress of moving twice in a short period of time.

- The price of the condo is right. As far as I can tell, the external factors that are working against us are the fact that the building is getting a bad name, the huge condo oversupply in the area, and the fact that it attracts mainly Russian and Canadian investors who are only interested in dirt cheap units that are not well maintained but that they can still rent for $3K+ a month. We started listing ours at $450K+ and it is now at $385K. It is a very large corner unit (1600 sq/f) with huge rooms (bigger than those in most homes today) with ZERO wrong or in need of fixing. The unit has new impact windows and new kitchen that, by themselves, cost us $60K+. It is by far the cheapest and best deal in the entire building. A similar unit sold earlier last year for $399K. When I mention our asking price to the neighbors, they can not believe it. Most think we should ask at least $50K more. So there you go. I am not greedy and want out as well. But I can also not afford to give it away. Still, if we get no action in a month or so, we will discount the price further and just bite the bullet.

 

[COcheesehead]

Your words. Not mine. Nice try.

Same difference, no?

 

[ivinsfan]

So you're saying we should all go borrow money and put it into the market?

Thread drift huh, of course the poster didn't say that.. the OP has a pretty major concern here and I would agree they need to get rid of their condo ASAP. From what the OP says there is no upside in the price and maybe a lot of downside.

 

[COcheesehead]

Thread drift huh, of course the poster didn't say that.. the OP has a pretty major concern here and I would agree they need to get rid of their condo ASAP. From what the OP says there is no upside in the price and maybe a lot of downside.

But the poster suggesting that the OP borrow money DID say that, just not directly. See the original quote below.

"Then consider that the low rates on mortgages today mean that you can very cheaply get a lot of money to your new house. If you can get a mortgage rate of 3.5% from a bank, and expect 7% back on your investments, then it's a no brainer. "

 

[ivinsfan]

Thank you all for your feedback! Please do keep it coming. A lot of food for thought.

Some key notes from my end:

- Renting the condo is not an option. As many of you said, I am not the landlord type.

- Selling, putting the cash in the bank and renting in the meantime is also not an option, since I work from home and do need my own office space. This is one of the main reasons why we want to buy a house. Plus, I do not think we can take the stress of moving twice in a short period of time.

- The price of the condo is right. As far as I can tell, the external factors that are working against us are the fact that the building is getting a bad name, the huge condo oversupply in the area, and the fact that it attracts mainly Russian and Canadian investors who are only interested in dirt cheap units that are not well maintained but that they can still rent for $3K+ a month. We started listing ours at $450K+ and it is now at $385K. It is a very large corner unit (1600 sq/f) with huge rooms (bigger than those in most homes today) with ZERO wrong or in need of fixing. The unit has new impact windows and new kitchen that, by themselves, cost us $60K+. It is by far the cheapest and best deal in the entire building. A similar unit sold earlier last year for $399K. When I mention our asking price to the neighbors, they can not believe it. Most think we should ask at least $50K more. So there you go. I am not greedy and want out as well. But I can also not afford to give it away. Still, if we get no action in a month or so, we will discount the price further and just bite the bullet.

I was with you until the last comment..it might be the cheapest and best deal in the entire building, but it's not cheap enough or it would be sold. If you think you are giving it away, you can stay there. None of the factors you mentioned will be fixed in 30 days..your neighbors don't want to believe their place is going down in value either.

Why don't you make Feb 1 the price drop day....I'd drop the price today in your shoes.

 

[braumeister]

if we get no action in a month or so, we will discount the price further and just bite the bullet.

Typically, in most areas the Spring sees much more home buying activity than the winter. So you might consider just holding the current asking price for a few more months. Then drop the price if you want. That's what I would do.

 

[ivinsfan]

But the poster suggesting that the OP borrow money DID say that, just not directly. See the original quote below.

"Then consider that the low rates on mortgages today mean that you can very cheaply get a lot of money to your new house. If you can get a mortgage rate of 3.5% from a bank, and expect 7% back on your investments, then it's a no brainer. "

Once again, nice try but no cigar..

 

[ivinsfan]

Typically, in most areas the Spring sees much more home buying activity than the winter. So you might consider just holding the current asking price for a few more months. Then drop the price if you want. That's what I would do.

The OP is in Florida so not really sure if that's a factor..school year end can make a difference but doesn't sound like a family type building.

 

[Karloff]

Typically, in most areas the Spring sees much more home buying activity than the winter. So you might consider just holding the current asking price for a few more months. Then drop the price if you want. That's what I would do.

This was our reasoning as well. We are waiting another month or so. In the meantime, we keep saving for the house. If in a month we do not receive an offer, then, yes, we will have to become aggressive and either make do with less house than we dreamed of, or take a small mortgage, hoping to pay it of in 3 to 5 years. It is frustrating, since the building next door gets a lot of action. Condos there are selling, on average, for $200K more for a comparable unit, and with much higher HOA's... The difference is that this other building (which is also poorly maintained) allows single-day rentals, so it is a magnet for investors, whereas ours requires a 30-day minimum.

 

[ziggy29]

Living in a condo with zero in reserves that is not being maintained is a lot scarier than a mortgage.

Very good point. Can you say "special assessment", boys and girls? (I knew you could.) It could be anywhere from hundreds to tens of thousands (unless state laws and/or the CC&Rs specify a lower maximum).

 

[ivinsfan]

This was our reasoning as well. We are waiting another month or so. In the meantime, we keep saving for the house. If in a month we do not receive an offer, then, yes, we will have to become aggressive and either make do with less house than we dreamed of, or take a small mortgage, hoping to pay it of in 3 to 5 years. It is frustrating, since the building next door gets a lot of action. Condos there are selling, on average, for $200K more for a comparable unit, and with much higher HOA's... The difference is that this other building (which is also poorly maintained) allows single-day rentals, so it is a magnet for investors, whereas ours requires a 30-day minimum.

In the next month if you get an offer lower then your ask are you willing to take it? How big of drop are you considering for your condo?

Oddly enough the town where we usually go to escape from winter has this issue going on right now. It's building entire projects that are zoned for nightly rental and yes it is bringing "investors". The downside is comparable units with 30 days minimums are not holding firm in price. Is there any chance your building might be rezoned? This is worth thinking about...if the values in your building are dropping like a rock the owners might press for this, I guess it depending on the mix of owners in your building.

 

[RunningBum]

But the poster suggesting that the OP borrow money DID say that, just not directly. See the original quote below.

"Then consider that the low rates on mortgages today mean that you can very cheaply get a lot of money to your new house. If you can get a mortgage rate of 3.5% from a bank, and expect 7% back on your investments, then it's a no brainer. "

Not the one who said that, but I think the point is, the OP is in a condo they want out of, and they are short the cash to buy the house they want. IN THAT CASE, "Then consider that the low rates on mortgages today mean that you can very cheaply get a lot of money to your new house. If you can get a mortgage rate of 3.5% from a bank, and expect 7% back on your investments, then it's a no brainer. "

So if others are in the same situation as the OP, yes, they should take out a mortgage to buy the house they want/need.

If you aren't in the same situation, the words don't apply.

 

[Another Reader]

This was our reasoning as well. We are waiting another month or so. In the meantime, we keep saving for the house. If in a month we do not receive an offer, then, yes, we will have to become aggressive and either make do with less house than we dreamed of, or take a small mortgage, hoping to pay it of in 3 to 5 years. It is frustrating, since the building next door gets a lot of action. Condos there are selling, on average, for $200K more for a comparable unit, and with much higher HOA's... The difference is that this other building (which is also poorly maintained) allows single-day rentals, so it is a magnet for investors, whereas ours requires a 30-day minimum.

Time to talk to the other rental owners and sellers in the building and go for a rule change to allow short term rentals. Circulate the comparable sales to every unit owner in the building and get whatever percentage you need to support a change in occupancy rules. Recall the existing board if you have a lot of support and the current board won't act.

 

[Karloff]

In the next month if you get an offer lower then your ask are you willing to take it? How big of drop are you considering for your condo?

Oddly enough the town where we usually go to escape from winter has this issue going on right now. It's building entire projects that are zoned for nightly rental and yes it is bringing "investors". The downside is comparable units with 30 days minimums are not holding firm in price. Is there any chance your building might be rezoned? This is worth thinking about...if the values in your building are dropping like a rock the owners might press for this, I guess it depending on the mix of owners in your building.

This has been in my mind lately as well. The fact is that the area could not be more desirable. But there are simply way too many condos in SE FL.

In our building the mix of owners is, essentially, 20% retired folks who just want peace and quiet and moved here 30 or more years ago, when the landscape was dramatically different, and 80% investors (mainly folks from other states, and Canadians) who just want to park their money outside of their countries and make a quick buck on airbnb. This was more like 50-50% until very recently, when things started to quickly change for the worse. There is a *lot* of anchor baby activity as well. Mainly Russian folks. In fact, all we see now are very young pregnant Russian ladies enjoying themselves by the beach while they wait for the US passports to arrive for their children. Many have 3 or 5 children back-to back. I see this every single day and it is not subtle. It was even featured on national news. Some neighbors with a flair for conspiracy theories tell me that this is the whole plan all along: to devalue the building so that it can then be purchased on the cheap and serve as Anchor baby Central. Don't shoot the messenger. But then again, stranger things...

My take? Some giant corporation or neighboring hotel will eventually buy the whole place out, and nobody on his/her right mind will want to actually "live" here. The whole area will be one hotel after another, which is not that far from today's reality.

 

[Karloff]

Time to talk to the other rental owners and sellers in the building and go for a rule change to allow short term rentals. Circulate the comparable sales to every unit owner in the building and get whatever percentage you need to support a change in occupancy rules. Recall the existing board if you have a lot of support and the current board won't act.

This is actually a catch 22 for us. I do believe that if we allow daily rentals the property values would go up, but as full time residents and owners who enjoy peace and quiet we also do not want this place to become a hotel. As things stand now, the quality of the people has been on a steady downhill trend, and this would only get worse with revolving doors...

 

[Aerides]

- The price of the condo is right. As far as I can tell, the external factors that are working against us are the fact that the building is getting a bad name, the huge condo oversupply in the area, and the fact that it attracts mainly Russian and Canadian investors who are only interested in dirt cheap units that are not well maintained but that they can still rent for $3K+ a month. We started listing ours at $450K+ and it is now at $385K. It is a very large corner unit (1600 sq/f) with huge rooms (bigger than those in most homes today) with ZERO wrong or in need of fixing. The unit has new impact windows and new kitchen that, by themselves, cost us $60K+. It is by far the cheapest and best deal in the entire building. A similar unit sold earlier last year for $399K. When I mention our asking price to the neighbors, they can not believe it. Most think we should ask at least $50K more. So there you go. I am not greedy and want out as well. But I can also not afford to give it away. Still, if we get no action in a month or so, we will discount the price further and just bite the bullet.

Are you happy with your realtor? If all the above is accurate, maybe your agent is the problem.

 

[Karloff]

Are you happy with your realtor? If all the above is accurate, maybe your agent is the problem.

Yes. This is our second agent. We used the first one for two contracts. So far, I think this new agent is more in-tune with today's market.

 

[Arizona1]

It doesn’t matter how much you have in it. Drop the price ten thousand a month until it sells and that’s what the current value is. Take the cash and have your wife get a mortgage under her name and buy what you need.
If you have a loss figure it as the price of beach living.

 

[ivinsfan]

This has been in my mind lately as well. The fact is that the area could not be more desirable. But there are simply way too many condos in SE FL.

In our building the mix of owners is, essentially, 20% retired folks who just want peace and quiet and moved here 30 or more years ago, when the landscape was dramatically different, and 80% investors (mainly Russian and Canadian) who just want to park their money outside of their countries and make a quick buck on airbnb. This was more like 50-50% until very recently, when things started to quickly change for the worse. There is a *lot* of anchor baby activity as well. In fact, all we see now are very young pregnant Russian ladies enjoying themselves by the beach while they wait for the US passports to arrive for their children. Many have 3 or 5 children back-to back. I see this every single day and it is not subtle. Some neighbors with a flair for conspiracy theories tell me that this is the whole plan all along: to devalue the building so that it can then be purchased on the cheap and serve as Anchor baby Central. Don't shoot the messenger. But then again, stranger things...

My take? Some giant corporation or neighboring hotel will eventually buy the whole place out, and nobody on his/her right mind will want to actually "live" here. The whole area will be one hotel after another, which is not that far from today's reality.

This thread is giving you some good feedback, comments like this will get it closed down in a New York minute. The whys don't matter, you by your own admission are in a rapidly declining neighborhood. Get out yesterday and you rationally know that your condo is not worth near what you are asking for it and in fact is doing down in value as I type.

 

[rk911]

Your words. Not mine. Nice try.

it's the same thing. the math looks attractive until something goes 'bump' in the night....risk. market drops, major emergency pops ups outta nowhere, etc. with no debt all things become possible. no, thanks. the OP can easily afford the 150k difference or simply aim a bit lower.

 

[ziggy29]

This is actually a catch 22 for us. I do believe that if we allow daily rentals the property values would go up, but as full time residents and owners who enjoy peace and quiet we also do not want this place to become a hotel. As things stand now, the quality of the people has been on a steady downhill trend, and this would only get worse with revolving doors...

Understood. Here on the northern coast of Oregon we have a horrible shortage of long term rental housing because so many owners are preferring to set up short term vacation rentals rather than long term residential rentals. And that is having a ripple effect because many businesses are having trouble hiring because people can't move here and find a place to live. Part of the reason we wanted to buy east of Highway 101 is because most of the housing is owner-occupied with full-time residents farther away from the beaches. (That and being up on the hill, outside of the tsunami danger if the Cascadia Subduction Zone lets 'er rip.)