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106

If you're moving up in house in the same area, it's better to wait until the alleged bubble bursts, since bubbles affect higher-prices homes more than lower-priced homes. You could also sell now and rent until the market bottoms out. There is no shame in renting, especially if you don't plan to stay in the house for more than a few years. If you're ...


37

There are often taxes (by whatever name) that scale with the property price. Agents’ fees are also often a percentage of the property price. These costs are usually a small but noticeable percentage of the total price. Aside from this, you’re mainly looking at the difference between what you get and what you pay. If you are buying and selling properties at ...


29

If you sell and buy around the same time, the market situation (hot, cold, before, after, or no crash) is of little relevance - it just affects the size of the numbers on both contracts, and about the same, so it's mostly a wash. If you want to take advantage of your prediction, you have to split the selling and the buying in time - several months at least -...


22

Tricky choice, but there's a couple of things to consider. You said you plan on upgrading to a more expensive house, so you might save more on the new house post-bubble than you'd lose on your current house. Suppose you want to move from a $1M house to a $1.5M house - you'll need $0.5M. The bubble bursts, and housing prices fall 20% across the board. Now you ...


12

You care if you’re trading up or down, which is very common. The amount that you have to pay to trade up, or receive when trading down, shrinks and grows with the average house price. You also care about the effect on the ease of buying and selling. Generally speaking, in a booming market it is easy to sell but hard to buy, while in a declining market it’s ...


8

Yes, self-employment income is the net (income - expenses) from the self-employed activity. Note that "from the self-employed activity" is important here. When you're self-employed, you need to separate expenses between business expenses and personal expenses and you'd only deduct business expenses from business income. You don't deduct personal expenses....


7

If you think you can actually pull this off, the best move is to detect bubble, sell, rent, wait for crash, buy. But you probably can't. Let's put it this way. I detected the 2008 bubble in 2004. For this scheme to work you would have to have been able to say beforehand when the bubble would burst and sell close to the burst. My detection in 2004 was too ...


6

From the FHA documentation you link to, there are specific types of discrimination that are not allowed Who Is Protected? The Fair Housing Act prohibits discrimination in housing because of: Race Color National Origin Religion Sex Familial Status Disability You are perfectly free to negotiate harder with someone you ...


6

Houses don't all appreciate at the same rate. You'd care a LOT if, for example, the house you're selling appreciated 30% in the time you've lived there, but the house you're buying has appreciated 60% and happened to by 3x as expensive when you bought the first house. £100,000 x 1.30 = £130,000 £300,000 x 1.30 = £390,000 £300,000 x 1.60 = £480,000 What ...


4

I don't think people actually having these discussions are ignoring any of the alternatives to houses and apartments. What you might see are attempts to reduce a multivariate issue down to just two variables that you can nest the more complex issues in. We do that a lot in data analysis, with (pick your flavor) MDS/PCA/tSNE/SOM and so forth. No one is going ...


4

Depends on what the original price for the house you're moving to was compared to your previous house. Suppose that you own a $500,000 house, and were looking at buying an $800,000 house. While you're considering your decision, both houses go up 10%. The price difference is (800,000 * 1.1) - (500,000 * 1.1) = 330,000 rather than the original $300,000 ...


4

You're correct that in theory it should't matter; "sell low + buy low" is effectively a "wash sale" in terms of your equity. But you bet you care. If you are trading a house when the market is soft... You may not be able to get financing The reason prices went up in the first place is that you had many people bidding on the available housing stock, and ...


4

yes, you do. Its an ironic situation where people with housing think they're getting richer when house prices go up. But consider this: years ago, you might have bought a flat in London for £100k (yeah, 20 years ago!) and moving to another one would set you back, say 1% estate agent fee and no stamp duty - or £1000. Imagine that flat doubles in price, now ...


3

One reason you might care about whether the housing market has gone up or down is your own financial situation. If you are tight on cash but not cash flow, you might want to use the equity in your existing property to roll into the down payment on a new property. Let's say you bought for £100k, you put £20k down, and the property is now worth £120k. ...


3

Ask any buyer if he/she would like the price to be cheaper and they'll say yes. It's not really a negotiation. The bank sets a price and you can put in a higher or a lower bid. Some set a base price and will not deviate from that. I don't know if this will be helpful but my first home was a cannibalized repossession that was foreclosed by an out of ...


3

Prices are not the only issue. After a bubble bursts, it can be very difficult to sell at any realistic price, and so you can be stuck where you are while watching lots of affordable properties that you would like to buy come and go on the market. But also remember that bubbles can only be detected in retrospect. Asset price rises that seem irrational are ...


3

One way or another, you are going to experience the difficulty of the market. When a market is up, there are usually more buyers than sellers. That's what's driving the price up. This shows in how quickly a fairly priced property will sell. As a seller, this is fun. You often get the price you ask for, sometimes even more, and you sell quickly. But if you ...


3

I'm no financial expert, but one other thing I'd think deserves a bit of consideration is which end of the process that will be tough. When the market is high, you'd expect ease at selling and challenge at buying. When the market is low, you'd expect ease at buying, but challenge at selling. So the period in the bubble would seem more rough if you need to ...


2

For posterity, here's what happened: Short version A family member offered to co-sign. We found a different bank which offered a (smaller) mortgage. We did that. I later refinanced to free the family member. Long version A family member offered to co-sign for a mortgage, if it would help. The original bank (Chase) said that their underwriters would ...


2

Renting a house is generally discarded out of hand because it rarely makes sense long term. Very few people are going to be renting out a single family home for less than what you'd pay on a mortgage for that home plus whatever the landlord expects to pay for maintenance. And very few people that want a single family home are particularly mobile-- they're ...


2

For most people, most of the time, the issue is qualifying for the mortgage, not the price differential between the old house and the new house. The problems is that periods when prices go down are often times when interest rates go up, like now. It tends to be a wash, since you wind up with the same monthly payment. You have a particular situation which ...


1

House price fluctuations are going to affect your loan-to-value (LTV) ratio when you move. That can dictate the amount you're eligible to borrow and the rate offered. Simple example: You have a £25k deposit which you use to buy a £100k house (clearly not an example tailored to your location). Your LTV is 75%. If house prices in your region have risen by an ...


1

Since the '08 Crisis, after the initial (hard) drop prices are continuously going up, therefore such a question is meritable. Will there be a downturn/correction? Most definitely yes, to which severity and how much will it affect popular areas like the one you 're looking at no one knows. Its usually never a good thing to try to time the market. That ...


1

(therefore, they will only "allow" you to select a half-decent investment) This doesn't hold up in actual analysis. Look at the 2007 housing crisis (United States and other countries; perhaps not Australia). Banks loaned too much money because they did market analysis. Market analysis looks at comparables. So if the market starts drifting and ...


1

Even assuming your statement to be completely true, I'm not sure what the benefit is of discussing WHY people gloss over these other distinctions. Who cares why? How does it change your analysis and decision making? That said, to the extent that this is true, I'd guess that it is because those are the most common options. Many more people rent apartments ...


1

If the argument is "stability vs mobility" then you are right that multi-family vs single family is not the right way to think about it. However, this is a financial Q&A site, and financially there should be no distinction between single- and multi-family when asking about "rent-vs-buy". The financial variables for renting are cost of rent, utilities, ...


1

With a foreclosure or with a short-sale, the bank is just taking offers and probably looking for offers above the listed price. A real-estate short-sale situation is interesting as the owner just wants to sell the property for less than the pay-off. But the bank would have to agree to the sale so that the property sells without any lien on it.


1

Do some research on the previous bubbles and see which areas recovered faster Some of the things that prevent a market from dropping too much is the school district. More recently is the walkability and general feel of the neighborhood. As the population gets older, more people want to downsize, and if your current home is in a desirable area for folks ...


1

The trick is start renting before the bubble bursts, then move into a house afterwards. Both of my parents did that and it worked out quite well for them!


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