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-1

Due to climate change I would stay away from coastal markets. I would assume that more and more people are becoming reluctant to buy in a location that might not exist in a couple decades.


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 ...


0

It's an Options agreement to buy the property at the agreed price. You are basically giving them the first and exclusive chance to buy the property. The developer will invest time and money to get planning, designs and legals completed without having to own the property. Once they get the approval they can exercise the option and exchange contracts to ...


4

According to https://finance.zacks.com/transfer-capital-gains-new-property-8920.html You can use Section 1031 to transfer all capital gains to a new property if the exchange is pure and money does not change hands. Or, you can transfer a portion of capital gains to new property if, in addition to an exchange of property, you also receive a sum of money. ...


7

To expand on comments I made critiquing @JoeTaxpayer 's answer: Compound interest is a very specific method of calculating interest that produces a specific family of curves of returns, equivalent to exponential or geometric growth. It does not simply mean a really awesome rate of return. If all you consider is your starting investment and your endpoint, ...


1

This is just a matter of perspective, isn't it? Say you bought a house for 100,000, in 1990 in London. And you just sold it for 1,000,000, today. Usually people say, "I made $900,000 on the house" They rarely say.. 900%. Even more rarely do they say: up 8% compounded every year. But mathematically it identical. It is just how you look at it. If you ...


2

As others have noted, compound interest "works" because you collect interest, then reinvest it, then collect interest on the interest. If you withdrew the interest every year, you would not get compound interest. That is, if, say, you had a $100,000 investment that grows at 5% a year, then in the first year you make $5,000. If you reinvest that, you now have ...


8

I own a stock. Bought 10 years ago, for $1000, and after 10 years it's worth $2000. No dividends, no interest, just growth in value. The increase over 10 years was 100%, and one might say the average increase was 10% per year. But, the true CAGR (compound annual growth rate) was 7.18%. While I respect the others' answers, there's a similar math that ...


25

Compound interest is only relevant when you get paid interest and you reinvest it. In cases where you buy, hold and sell, with no income generated during the holding period, there isn’t any income from the investment to reinvest. There’s no interest, and hence no compound interest. The ‘growth’ of home values is just a ‘paper’ (re)valuation. If you paid $...


4

There is no compound interest on a home value. Here are a few examples: The First place I owned the value went up 10% in the first two years, then 20% the next year. Then it fell back to almost the original price, which made it impossible to sell, there were 10+ sellers for every buyer. So I was a landlord for almost 10 years and the price bounced around a ...


4

You probably can do it, but there are some important considerations: Mortgage rates are typically lower than other types of loans, including business loans. This alone may be reason enough to avoid it. Mortgage application documents usually ask you the source of your down payment. This includes other loans and even gifts, in which case you may have to ...


3

Much like the question asked previously, the two most important things in obtaining a mortgage is debt-to-income ratio and income. Equity in the house being purchased is important but that can be nearly zero if one is using some kind of "mortgage insurance". PMI (private mortgage insurance), VA, and FHA are kinds of mortgage insurance which make down ...


1

So there does exist The Financial Literacy and Education Commission at the U.S. Treasury And the document: Promoting Financial Success In The United States: A National Strategy for Financial Literacy 2016 Update covers a number of sources regarding the financial literacy of the population. The best source for the state level regarding formal education ...


1

There isn't much. I know that FDIC has developed a basic training program for kids. https://www.fdic.gov/consumers/consumer/moneysmart/ Junior Achievement is a nationwide non-profit that teaches those life skills. The group came for like an afternoon one time and I never saw them again. Some schools partner with banks to create a savings program for kids,...


2

While other answers indicate why this might be something a 'rational' buyer might do, I will focus on another common scenario: why this might be something an 'irrational' buyer might do. There are some areas in Canada [I note this because of where you source your question from] which have had incredibly hot property markets over much of the past 5-10 years. ...


0

Why would a rational buyer offer to buy with no conditions precedent? If the buyer planned to knock the house down, and build a new one. Then no issues matter, as the house will be destroyed.


4

It's obviously cockamamie to complete and pay these condition precedents before you submit the offer, because all that money and time will be wasted if the seller rejects your offer. Thus what am I overlooking? In a hot market, people do do what you reject as cockamamie: They pay for a pre-inspection so they don't need an inspection contingency They ...


13

It doesn't feel savvy to offer without Conditions Precedent like Financing Condition, Subject to Appraisal Inspection, Legal Review, Survey. Because skill-wise, you're not ready to do that. You can skip financing condition if your financing is lined up and secure. You can skip appraisal if you are experienced at pricing homes in the area. You can ...


4

mhoran_psprep gave a great answer, I just want to address one part of the question: If they were working for the seller, they would go for the higher option at the risk of having it fall through, spend more on advertising and open houses. This part could be true in some situations, but most sellers also prefer a deal that is less likely to fall ...


38

It doesn't feel savvy to offer without Conditions Precedent like Financing Condition, Subject to Appraisal Inspection, Legal Review, Survey. For the average buyer, those typical conditions are very important. But for a team of investors, they are handling many of these internally. The purpose of visiting the house before making the offer is to do an ...


16

Perhaps the commenter is paying cash and is a qualified surveyor who can do their own appraisal and survey at no cost, and has purchased enough properties that they can spot obvious pitfalls in the contract. And then the risk of something going wrong is small enough that the $5K saving more than outweighs it. If you only buy a couple of houses in your life ...


4

What do we know (not surmise) about elementary financial education at the pre-college and early college levels in the US for institutions that otherwise are recognized as providing good educations ? How rare is such financial education? High schools are measured by how well their students meet or exceed the graduation requirements. Even private ...


3

As a currently enrolled student in higher education (3rd year) and having lived in the united states for my entire life in a middle class household whilst going through the public school education system for my entirety of grade school years (graduated HS in 2016), I can respond to your question with a clear 'NO'. There is no personal financial ...


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