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#873976 - 12/16/07 12:16 AM I'm buying a townhome!
Dip Offline
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Dip
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San Diego, CA
Well, hopefully. My R/E agent is running the preapproval right now.

It's a 2 bedroom, 2.5 bathroom, 3-story unit (bottom story is an oversized 1 car garage. It needs a lot of cosmetic work, but I wanted that (so I can customize it myself and build equity).

Anyway, does anyone have any advice? No one I know has really gone through this yet (2 friends of mine did but I didn't really hear about it).
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#873977 - 12/16/07 12:29 AM Re: I'm buying a townhome! Dip
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Who have you talked to besides the realtor? Is the realtor working for you as a buyer's agent or the seller? It makes a difference in their attitude and whether they're looking out for you or the seller's interests.

Have you talked to a loan officer at your bank? Why is the realtor getting a pre-approval for you when you work at a bank? You don't need/want anyone inbetween you and the lender.

Have you seen and read the condo by-laws and association rules? You need to know what you can and can't do BEFORE you buy. If you buy and can't remodel the way you want to because the by-laws prohibit certain things, you'll be stuck and unhappy too.

Lots more info and advice if you want it. I've bought a condo and a few homes in my time.

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#873979 - 12/16/07 01:21 AM Re: I'm buying a townhome! Truffle Royale
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I guess he's a buyer's agent in this case...I've been working with him for a while now. Even when I wasn't ready to buy, he was sending me listings so I would get a feel for the market and what I liked and didn't like in the units that fit my criteria.

I had him to the pre-approval cuz it's Saturday. But also, the bank I work for doesn't have a very good deal for employees. From what I understand, since it is a Fannie Mae approval, I can pretty much go wherever I want once I know I am pre-approved. The pre-approval is so the seller will take me seriously.

Also, it's a probate sale, so I know I won't get any disclosures and will have to pay for an inspection out of pocket. My realtor owns a probate company too, so he's well versed in the whole process.

I do want to get the stuff on the HOA. We have to figure out who the president is first though. It's only a 16-unit complex and one of the residents is president. I do know the HOA only covers common area maintenance. I think maintenance to your unit, even if structural, is your responsibility. We saw some wood rot on one of the balconies and some termite damage on the patio entrance...

I met a couple of the residents-- my potential neighbor has been there for 8 years, renting from a friend. And I met a little old lady who has been there 26 years and she said she loves the place and used to be the HOA president.
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#873980 - 12/16/07 01:51 AM Re: I'm buying a townhome! Dip
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Dip

I lived in San Diego for many years. You must have the plumbing checked, odds are its very corroded. You may think you can just change some faucets.Check the caulking around the shower and tub and sinks. If its cracked odds are water has gotten into the floor and walls.

Expect to pay a minium of 15,000 up to have each bathroom redone if they have to replace floor or wall damage. The kitchen appliance and cabinets are also expensive to put in, if you want to upgrade.

Dry rot and termite is not good. It can go deep into the structure. The HOA may not be reponsible.

If the HOA is professionally managed you should be able to get copies of budgets and minutes of HOA meetings from them. If the HOA is not professionally managed and only residents have been voteing on preventative maintenance there may be lots of deferred maintenance.

What is the roof constructed of? Cedar shingles requires a lot of maintenance. When was it last redone? If there is a leak you will be responsible to fix the damage in your unit not the HOA

How old is the water heater? The water in San Diego causes corrosion and shortens their life span.

Doing cosmetic rehab is one thing but a condo unit with plumbing termite and dry rot is not a task to take on as an individual
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#873985 - 12/16/07 01:27 PM Re: I'm buying a townhome! Don_Narup
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Just a word of caution. In most States, just because you have been working with a realtor, does not mean he is a buyer's agent. You would have specifically signed a buyer's agent agreement - otherwise, the realtor is always working for the seller and technically is not representing your interests.

Get a really good inspector that has the means to pay for errors and omissions - and one not recommended by the realtor. I would also make sure that I had an real estate attorney on board also.
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#873994 - 12/16/07 06:50 PM Re: I'm buying a townhome! Truffle Royale
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Originally Posted By: Truffle Royale

Have you seen and read the condo by-laws and association rules?


Reading and understanding the bylaws is incredibly important. Find out if they have identified any major improvements to the association that may result in a special assessment that you'd have to pay. I've gotten hit with them at times and they can be quite painful

Visit the townhome at various times of the day and night, including weekends, before buying. Since you share walls with your neighbors it's a good way to determine the noise factor you'll be dealing with for the next few years.

Congrats to you - it's both exciting and scary to buy your first home but it's absolutely worth it!!
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#873996 - 12/16/07 07:02 PM Re: I'm buying a townhome! rlcarey
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Originally Posted By: rlcarey
Just a word of caution. In most States, just because you have been working with a realtor, does not mean he is a buyer's agent. You would have specifically signed a buyer's agent agreement - otherwise, the realtor is always working for the seller and technically is not representing your interests.


In my opinion, there's no such thing as a buyer's agent, regardless of the terminology. So long as they are compensated based on your purchase price, and not until you buy, they are always going to be incented to get you to buy as soon as possible, and not for the lowest price possible.

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#874015 - 12/16/07 10:16 PM Re: I'm buying a townhome! Dip
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WOOHOO
PUT DOWN THE CHECKBOOK, BACK AWAY FROM THE TOWNHOUSE!

The market has not hit bottom, you are more than likely, in fact there is a 100% chance that you are paying too much - you will lose money PLUS there will be apprecisation for the next 5-7 years, perhaps things will turn around after that period.

Smart people that have not purchased are renting and will not be buying for 1-2 years. We could be a 20-30% drop in prices during that period.

On the other hand, I'm happy for the seller - they will be very happy to close a deal on a piece of overpriced property.

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#874016 - 12/16/07 10:21 PM Re: I'm buying a townhome! Jokerman
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Originally Posted By: Jokerman
Originally Posted By: rlcarey
Just a word of caution. In most States, just because you have been working with a realtor, does not mean he is a buyer's agent. You would have specifically signed a buyer's agent agreement - otherwise, the realtor is always working for the seller and technically is not representing your interests.


In my opinion, there's no such thing as a buyer's agent, regardless of the terminology. So long as they are compensated based on your purchase price, and not until you buy, they are always going to be incented to get you to buy as soon as possible, and not for the lowest price possible.


You are correct, Jokerman - no RE agent is working for anyone except themselves - their goal is the 6% commission with the sale way more important than the price of the house - that's what is strange about that industry, there is no incentive to secure the best price for the seller or the buyer, it's all about the sale itself. I'd like to see a lower commission if they don't get what is viewed a market price. Of course, with no market, market price is whatever a fool wants to pay at this time.

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#874018 - 12/16/07 10:25 PM Re: I'm buying a townhome! °X°
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Ask about the condo reserves.

If is is only a 16 unit complex, that means you will pay 1/16th of any cost associated with the building...those cost become much more significant/painful on smaller complexes like this one.

If their reserve is only at $5k, (and the building is approcahing 30 years at least it sounds like) it will not go far to replace a roof! If the reserve is pushing $50k, much better position. Also, know what percentage of the monthly HOA due is being set aside into the resevere...if little or nothing, run!

You make no move until you have the most current set of condo docs, you know and understand what they mean and what you are and are not responsible for, and you have seen the budget and know the reserves. If the HOA or seller put up any roadblocks to this...walk away, fast. A condo/HOA that is in a good financial position will have no concerns about sharing this information with you.

Also have been in several condos and HOA boards, so more info if you want it.
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#874020 - 12/16/07 11:25 PM Re: I'm buying a townhome! #Just Jay
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Dip,

Congrats!

Sorry in advance if this isn't the answer you wanted...

My SO and I pulled out 90 percent of the carpet at our townhouse (two story, three BR 1 1/2 bath and 2 carport spots) and replaced the flooring with floating laminate floors [termites are crazy mad in Central Phx]. I sanded and stained the stairs, and scraped off the popcorn ceiling and smoothed that out, put up crown molding and all rooms and new baseboard. It was a lot of work, but worth it all, plus I was able to to buy a new miter saw and table saw to complete these projects.

BTW, how does your mom feel about your move?
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#874023 - 12/17/07 01:03 AM Re: I'm buying a townhome! Bacon Boy
Dip Offline
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Thanks all for the advice...it all sounds really good and I will def make sure I understand all the HOA stuff.

My mom's ok with the move...it's only 3.5 miles away from her house, and she'd be lending me a huge sum of money to get the place, which I'd pay back later when I have equity and refinance.

To be honest, I'm not ready to buy now. Ideally, the soonest I'd want to buy is in about 6 months, but this unit just happened to come up and it is every thing I want. So, I have some people saying, if it's everything you want, then jump on it. I guess if it's meant to be, it's meant to be. I'll make sure I get the HOA stuff and figure out how that all works. I also plan to offer less because of all the deferred maintenance the HOA apparently does no cover.

So, if it goes through, great! I have a home! If not, great! I can finish paying off my car and save some emergency money

But seriously, you have all given me a lot of great info that I really appreciate...Thanks again!
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#874026 - 12/17/07 02:31 AM Re: I'm buying a townhome! °X°
rlcarey Online
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Originally Posted By: _X_
Originally Posted By: Jokerman
Originally Posted By: rlcarey
Just a word of caution. In most States, just because you have been working with a realtor, does not mean he is a buyer's agent. You would have specifically signed a buyer's agent agreement - otherwise, the realtor is always working for the seller and technically is not representing your interests.


In my opinion, there's no such thing as a buyer's agent, regardless of the terminology. So long as they are compensated based on your purchase price, and not until you buy, they are always going to be incented to get you to buy as soon as possible, and not for the lowest price possible.


You are correct, Jokerman - no RE agent is working for anyone except themselves - their goal is the 6% commission with the sale way more important than the price of the house - that's what is strange about that industry, there is no incentive to secure the best price for the seller or the buyer, it's all about the sale itself. I'd like to see a lower commission if they don't get what is viewed a market price. Of course, with no market, market price is whatever a fool wants to pay at this time.


In most States, under State law, signing a buyer's agent agreement imposes a fiduciary responsibility on the agent. Thus, it allows lawsuit for breach of fiduciary responsibility. This includes a duty of loyalty; obedience; confidence to the buyer. It also includes confidentiality, which prevents disclosure that the buyer will pay a price greater than the price submitted in a written offer, the motivation of the party for buying the property, that a buyer will agree to financing terms other than those offered, or of any other information requested to remain confidential and any additional duties that are mutually agreed to with the buyer.

So, while you may feel that only the commission is important, in States that accommodate buyer's agents, it does offer you a little more protection than relying on representation of a seller's agent or a co-commision seller agent relationship.
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#874033 - 12/17/07 02:48 AM Re: I'm buying a townhome! rlcarey
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I understand that it imposes a duty. I just question whether that is worth anything in the real world, given that the compensation is still based on how much the buyer winds up paying. Just my opinion.

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#874035 - 12/17/07 02:54 AM Re: I'm buying a townhome! Jokerman
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The compensation within the buyers agreement does not have to be based on the sales price. It is a contract between the buyer and the agent.
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#874036 - 12/17/07 02:55 AM Re: I'm buying a townhome! Dip
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Quote:
I also plan to offer less because of all the deferred maintenance the HOA apparently does no cover.
deffered maintenance??? BIG WARNING SIGN! What's been deferred and why? If it's something like the roof and it's valued at a $5,000 deferrment now, keep it mind that it's going to raise exponentially as the roof gets worse and will cost more to fix later than it would now.

Quote:
I do know the HOA only covers common area maintenance. I think maintenance to your unit, even if structural, is your responsibility. We saw some wood rot on one of the balconies and some termite damage on the patio entrance...
This scares me big time. Rot and termites are a terrible combination.

In a condo situation, you are responsible 'from the inside of the outside walls in'. That means, if the termites are in the outside walls, the association has a responsibility to have that taken care of. If the termites are only in the wall that seperates the living room of the unit from the kitchen of the unit, then it would be your problem, not the HOA's.

My daddy always used to say 'if it looks too good to be true, it probably is.' If you're not ready to buy now, don't. Something else will come up when you're ready. And buying is just the beginning. Ask anyone who has and they'll tell you that the sale is the easiest part. Then you get into all the things you have to buy for the house and to repair the house, etc.

From what you're describing both with the realtor not being your agent to the termites and rot, it sounds like maybe this isn't such a good deal and you should look further...after you sign a buyer's agreement or at least get an attorney to help you. Rates are already heading down and, imo, will go even lower next year because it's an election year.

Good luck, Dip. I'm sure you'll find the home of your dreams.

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#874037 - 12/17/07 03:07 AM Re: I'm buying a townhome! rlcarey
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Originally Posted By: rlcarey
The compensation within the buyers agreement does not have to be based on the sales price. It is a contract between the buyer and the agent.


And what percentage of those contracts, in your estimation, are based on something other than the sales price?

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#874040 - 12/17/07 05:17 AM Re: I'm buying a townhome! Jokerman
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#874041 - 12/17/07 05:46 AM Re: I'm buying a townhome! rlcarey
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I think most people would have a hard time finding a realtor who would agree to it. Besides that, wouldn't the listing contract have something to say about all this - if it's a 3+3 contract, how are you going to try to get your 3% back to pay your agent according to your agreement?


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#874050 - 12/17/07 12:15 PM Re: I'm buying a townhome! Jokerman
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Everything is negotiable. As long as the seller's agent receives their 3% or whatever contracted amount they agreed to except, they don't care what the buyer's agent receives.

Additionally, while 6% is the norm for real estate commissions - it is negotiable and I have been very successful in negotiating lesser amounts on several of my house sales.
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#874058 - 12/17/07 01:37 PM Re: I'm buying a townhome! rlcarey
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I agree with _X_ and Jokerman (a sign of the apocalypse??). In my area I think a lot of homes sell for less than they could have with a little more time on the market. There's a few big selling agents who, in my opinion, intimidate sellers into settling so they can score a quick sale. The difference between a $400,000 and $450,000 price doesn't amount to much in the agent's pocket vs. moving on to more sales.

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#874121 - 12/17/07 02:44 PM Re: I'm buying a townhome! rlcarey
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Originally Posted By: rlcarey
Everything is negotiable.


Undoubtedly. It's just not a very practical solution at this point, with homes priced to reflect the seller paying the commission.

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#874134 - 12/17/07 02:59 PM Re: I'm buying a townhome! °X°
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Originally Posted By: _X_
PUT DOWN THE CHECKBOOK, BACK AWAY FROM THE TOWNHOUSE!

The market has not hit bottom, you are more than likely, in fact there is a 100% chance that you are paying too much - you will lose money PLUS there will be apprecisation for the next 5-7 years, perhaps things will turn around after that period.

Smart people that have not purchased are renting and will not be buying for 1-2 years. We could be a 20-30% drop in prices during that period.

On the other hand, I'm happy for the seller - they will be very happy to close a deal on a piece of overpriced property.


It's funny you say that...I just accepted a job offer that I have to relocate for. The house prices where I'm moving are riDIPulous!! Every one I've looked at I might buy if the price was about 30% less.

At least where I'm going, there are a lot of houses for sale. When making any offer in this climate, I'd definitely low ball and ask for everything: seller's help, all repairs, everything. X is right (yes, I'm shocked at agreeing with him too! ;D ), the market hasn't bottomed yet, and I think the real good deals haven't appeared yet.

Play hardball Dip - Home buyers have all the power right now. No one is buying.
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#874137 - 12/17/07 03:01 PM Re: I'm buying a townhome! FBH
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Im going to have to agree with J on this one. I don't think that many agents ever work for the buyer. I have heard too many promises and too many lies. Did you guys know its a buyers market, always has been according to RE agents. Sorry, I don't think an Agent ever really works for the buyer unless the agent knows that the house is going to be $1,000,0000 so the agent knows the commissions will be nice.
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#874286 - 12/17/07 05:43 PM Re: I'm buying a townhome! Sound Tactic
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My pre-approval went through, all on my own!

I am def going to low-ball the offer by about $30-40k, pending getting the HOA stuff so I can straighten out what the HOA is and isn't doing for the tenants. I'm nto empotionally attached...if I can get it for cheap, then great. If not, I can wait.

As far as my agent goes, I have never signed any agreements with him... this is him: http://yourrealestatedude.blogspot.com/2007/12/east-san-diego-county-realtor-launches.html
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