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the time has come to consider a change
children of dune - leto 1
seperis
So for the first time seriously, I'm thinking of buying a house. By house, I mean, condo, townhome, residence not requiring me to know how to handle a yard and/or drainage. I am doing this under teh assumption certain family-related events occur as they should, but whatever, no matter how I do the math, my better choice is a mortgage over rent, as Austin rent is ridiculous. Scary, but true.

I've worked out three separate budgets, all of which include the slush fund, which is my term for all teh stuff I know I will forget really need to be in a budget, and under the assumption that bills are easy to underestimate. I've also increased my contributions to my stock account, since my one savant quality with finances seems to be choosing decent stocks at a low price. Ive' also started to make allownaces for things that will make my future abode look less serial killer like maybe a table of some kind, but that's under Furniture and in my family, we tend to exchange that a lot, so no worries, and I'll be honest, Child and I are tech; tables mean less than making sure we have enough routers to get wireless in every corner of the place and the place makes adding ethernet hookups easy.

Allowing for that, what precisely should I be looking for as reasonable in things like HOA fees and what they are supposed to accomplish, and for that matter, energy efficiency and what that actually means. In Austin, you can assume it's a good thing, mostly, but good doesn't tell me how I should balance that to mortgage payment.

These things are immutable: property taxes here range from disturbingly low to wtf; you would think there would be like, a reason for that, but sometimes, it really makes no sense. This is actually becoming a breakpoint for me; up to a certain point, all the mortgage payments themselves are within a few hundred dollars of each other, which is fine and well below my cutoff; the property tax issue is a huge problem, because that can be--and is--sometimes more than the mortgage payment itself. And I'm not actually joking about the randomness; even downtown it varies by how the bird flies.

I'm finding it most annoying that the most interesting places are south of the river; for those in Austin, I work just north of Manor Road and Child goes to school in Pflugerville. The odds of either of us not becoming sociopaths due to sleep dep is very high and I'm trying to be realistic about our chances of pulling this off, and its' best to upfront state our known weaknesses.

The one very nice thing is in Austin, Child and I jsut barely make the 80% median income (and I mean, I'm wondering if my next mandatory twenty dollars a month retentition raise will kick us over), so we qualify for at least one or two useful-looking programs for first time homebuyers. And I assume I should take the homebuyer classes.

But. Any advice, in general or in specific? In return, I hereby promise that should any fan-run convention make its home in Austin (HINT), I will totally open my kitchen to all baking and pre-con partying and I promise regular fan gatherings. It's kind of a dream of mine to host a premiere party, to be honest. Traditionally in my family, we also tend to have people come to live with us for months on end, but keep in mind unless there is a miracle in housing here, it'll be on a couch that I will presumably own at some point.

(I actually have a spreadsheet for this right now to work out estimates on everything, and realized that while I consider cable an 'eh', I consider broadband a requirement for survival, as does Child. We're currently debating whether we really need food as much as 50G broadband. We're both downloaders and box-set buyers of television. It's hard, yo.)

Posted at Dreamwidth: http://seperis.dreamwidth.org/922063.html. | You can reply here or there. | comment count unavailable comments

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Y'all may qualify for some of the affordable housing set-asides in the Mueller development on 51st and I-35, though at just over 80%, you may make juuuuust too much (ain't it always the way). My friend just bought a fantastic little row-house condo up in Cedar Park (183 and Lakeline, basically) - it sounds like it would be pretty out of the way for y'all with school and work, but since Child goes to school up north anyway, it might be worth looking in to.

We should be just under the 80% (hopefully, the state's freeze on raises just became my new favorite thing!) and I think I was looking at Mueller but there wasn't anything available. I'll have to check again and see.

Having done this, I'm totally happy to talk about it.

You have two things:

1. Condo fees vary. Mine went from $345 to $750 in four years. Cost depends on what they cover and the maintence needs for the building/development- see roofs, elevators etc.

And when somebody gets forclosed and quits paying, everyone else has to pay more to make up the difference.

2. What ever you have saved? Child's university will try to take it. So better to spend it on a down payment now, because in a couple of years it will greatly affect his financial aid.

I've been thinking about that with college. He has a custodial account that he gets access to when he has his license to make it easier to get him a car (and because sharebuilder's random giving away of money for having accounts means having a few of them is nice free money to invest), but that's not a bad idea.

The HOA fees are annoying me, but property taxes are ridiculous. If I could work out the pattern, at least I'd know which areas to avoid, but no. They'll jump from 1K to 5K in the same neighborhood with no rhyme or reason. Gah.

Sorry to comment jump, but check the public HS boundary lines. Sometimes that can affect the taxes. People will pay way more to be just over the line into a specific public HS's boundary. I mean, being you you probably already checked that <3 but just in case. Also are you sure they aren't in a different, idk, utility district or county?

p.s. and remember even if those lines don't affect your son, they DO affect potential buyers. Sometimes people know the lines are going to change in the future and start devaluing an area just because of that, too, astoundingly.

Edited at 2012-01-07 10:30 pm (UTC)

Yes, the condo fees are important. Ours doubled in a five year span. We have heard rumors that about half the complex isn't paying them currently, and that's why.

Location is key. Also a good school district since people will pay more for houses that are in them. Make sure you look for water damage. Nothing worse than a leaking roof. Look in corners, in attics for any kind of mold/wet patches. Also mice/rodent problems. If you have a basement, hopefully it's water-tight but you never know. Look for mold there, too.
Also asbestos around pipes, on tiles, etc. Lead in the paint if it's older than the 60s.

Find out how old the roof is. Go around and test the electrical. Make sure it has the correct wiring. Energy efficiency will greatly reduce your electric/cooling bills.

norabombay is right about the college fund. I'm facing that now. Bastards want to take everything so hide it while you can.

LOCATION LOCATION AND LOCATION and this means macro, medium and micro (TM me lol not a realtor). So basically, pick the best micro location unit -- I'm assuming corner but don't ask me, ones with views, away from noise and streets and dumpters etc. -- as far as resale/value within the best little area within the best general area you can afford/makes sense for you with where you work and go to school.

Condos/townhouses lose their value faster in down markets than single family homes but if they are in a great location the difference is far less.

Also, does your son's school go through HS? I can't remember... If not, I'd plan around the HS choice along with your work location, narrow down to "best" areas within a reasonable commute. Property taxes being high COULD be a sign that certain areas hold their value over time whereas others don't (but that can change). Don't forget also that property taxes are deductible on your income taxes, so depending on your bracket the difference between property tax amounts isn't as much in after tax dollars as it appears.

Also as we have recently experienced during refinancing, you want a unit that's ~typical of the surrounding development/area. Like, no A-frame ski chalets in the middle of adobe/white area.

Carefully read all legal documents about condo/townhome ownership, associations etc. You may even want to hire a local lawyer who specializes in them... they are a weird breed of ownership that has features unique to themselves and the laws vary state by state. What exactly are your rights and responsibilities? How much can they jack fees within what period of time? If there aren't limits on things spelled out in the agreements, be very careful. You literally might end up spending less on a small modest single family (not advocating that because believe me, I hear you on the maintenance/upkeep crap omgggg).

Also, SQUEEE and yay for you! \o/

Child just started HS, and there's a bus that goes from the local branch to that one, so I have a decent range to work in, and my dad will still (probably) be willing to drop him off in the mornings if it would be more convenient.

Hm, I need to check on the property tax issue. That's really a breakpoint for a lot of places I like; some of these nearly double the price.

Property taxes are deductible from income tax, as is the interest you pay on your mortgage. So you want to factor that into your calculations as to the actual net cost of the property tax to you. Still, double is a lot regardless!

I have nothing helpful to day here at ALL, but eeek! Good luck!

Being a condo owner with home owners dues, I'll break down ours for you. For $255 a month we get basic cable, water, sewer, trash and garden/leaf/general clean up maintenance. We have to pay extra for extended cable and internet, etc, of course, and power. As for the determinations between the home owners dues, I'd really make a spread sheet of how much they are against what you get for them. Some places have pools and work out rooms, etc, and you'll probably have to pay some sort of dues for their upkeep as well.

Another thing to look at, in terms of condos and townhouses, is to look at the other units in the lot and see how many are in current foreclosure proceedings. If there are a certain amount, at least in WA state, then getting certain kinds of loans to be able to buy in said complex can be a real bitch.

As for hidden money drains, I'd also ask about the roofs of any units you look at, as well as if they have decks. If the roofs are in need of repair, or their decks are, I wouldn't advise you to buy, unless the place is so dirt cheap you can spend ten grand on your portion of the new roof and another two to five grand on a new deck. So. There are those things to consider. Also check out the age of the condo - in our unit, it was built in the 1980's. It has a concrete frame. We don't HEAR a lot from our neighbors but Jesus fucking christ if they stomp around in their units all the shit on my shelves rattle. So. Do consider the age and composition of the place you buy as well.

My only insight on the property taxes is the surrounding neighborhoods. As in our property taxes are somewhat cheap - however, we live right on the edge of Holy Shit Redneck Area where there are rundown apartments and trailers. But that's over the hill and you can't quite see it from our nice little complex. But in the other direction we have lovely homes in good condition. So. Just be aware that if the property values are low, the area might not be such a great place to live in. As for the downtown weird pricing, I'm betting a lot of places are grandfathered into the new tax brackets. Like with my parents' house they sold - they paid MAYBE a thousand dollars a year in property taxes, but when they sold the place, it was no longer grandfathered in under the old tax laws, and the new family had to pay upwards of six thousand dollars a year in property taxes.

Hope that helps!

I don't know much about buying a condo, but lots of people up above seem to know an incredible amount. My main comment would be that if you are using a real estate agent, try to get one that is a Buyers Only agent, which means s/he only works for buyers and therefore has no personal interest in trying to push you toward any particular properties. Regular agents often are buying and selling and if they can double their commission by doing both for the same property, well, they might be more likely to tell you all the good/none of the bad of their selling properties. There are websites that can help you find Buyers Only agents:

http://www.exclusivebuyersagents.com/
http://www.naeba.org/

You should also feel very comfortable with your agent and feel s/he is trustworthy, so if you can agent shop that's good.

Once you've found a place, make sure you use an agency that checks to make sure there are no liens on the home. You'd be surprised (and appalled) how often people take out home ownership loans and "forget" to mention it. Once a home becomes yours, if it has a lien on it it somehow becomes your problem. Lawyers usually take care of hiring such an agency (but the buyer pays of course).

Oh, and I'd echo the fact that higher taxes aren't necessarily a horrible thing if it means the neighborhood is better/safer/has a better school system - basically it could be a sign of resale value. It may not be, of course, but it's something to discuss with someone who knows the real estate market well.

Good luck!


I'll talk about buying a home, not a condo.

1) I am not certain whether Texas has a property tax cap (for instance like California), but likely the variances are because of the 'value' of the house from when it last sold. Many states base the tax on the sale price of the home, not the value of the home, so some of the homes that last sold in the boom time are going to be figured significantly higher than the homes previously dumped during the bust. Your real estate agent will be able to confirm this for you. Also, most states do not charge the property tax as a single annual payment (California did it in two; Nevada splits it into four).

Some mortgages require you to pay as part of the mortgage, your home insurance and your property taxes. Try not to get one of these as they are less flexible if you end up changing your insurance or your property taxes change and you can end up being at the banks whim instead of making your own decisions.

2) HOA fees for homes are generally for a 'planned' community, and pay for basic neighborhood amenities and requirements. If you are looking at a gated community, often times they are considered private property, so things like street surfacing, stop signs and curb painting are the responsibility of the HOA, not the city. Otherwise, you are looking at paying your share for landscaping (service, water and electric), exterior 'common' area fencing, any greenbelt parks or playgrounds, street lighting, clubhouse maintenance if applicable, insurance for all of the above, loan payments, plus general liability, extra $ for occasional things like street resurfacing, and an emergency fund whose % total is required under state law. (There are probably more items I'm not remembering, but I haven't looked at the budget of ours in months.) Most will have a cap on how much the fees can increase in any given year, but extraordinary expenses can be required for emergency act of god/legal compliance things, and that usually requires a lump sum from every homeowner outside your fees. The smaller your community, the more of a hit that can be to an individual, but hopefully you're offset by lower overall common area expenses. The other problem can come when other homeowners do not pay their dues and the HOA runs into a capital deficit which, in turn, will cause your due to increase as often as they can legal due so to (in a vicious cycle since higher fees often mean more people flake).

HOAs (at least in Nevada) can actually foreclose on a member's home for not paying their dues, but they can only place liens on the homeowner for infraction fees (like not maintaining your lawn to standards, sometimes for parking inappropriately, or doing work to the home without going through the architectural committee). Definitely ask to read the CC&Rs, plus any additional rules in a community before you buy. We've had recent homeowners buying foreclosed/ auction properties where the banks never told them there *were* CC&Rs, and so don't know they can't park on the street overnight, can't paint the exterior or do any visible exterior work to home or lawn without committee approval until they get a letter and possibly a fine -- and if the previous owner was in violation for something they did and didn't correct, the new homeowner is often on the hook for making the changes at their own expense.

Older neighborhoods often no longer have HOAs, but ...

I'm so embarrassed, I exceeded the comment limit and you don't even know me ...

Anyway:

Other things that might come up to plan for beyond the stuff folks have already mentioned like roofs and foundations --

get a thorough, comprehensive home inspection done before you sign any deal on the home you're looking to buy. Most sales are "as is" and while the existing home owner is obligated to let you know of any *known* defects, they don't always no about them (or comply) and the banks definitely don't know). Suing them afterward won't get you anything if the seller has no money to pay the judgement.

if you have neighbors and common fencing, you will be required to pay for half the cost of replacement when the time comes (sometimes even when the damage is the other homeowner's 'fault')

if a neighbor has trees that impact your yard, you can't just cut them back -- and while you can sue them for their roots damaging something, if they don't have the money, you get stuck with the repair bills anyway

homes should have the exterior painted every 8-10 years; not only to keep up the looks, but for soundness too; while the temp's not quite as high in Texas as Nevada, you've got the storms and humidity, and rot happens if you don't protect it

Some architectural committees are downright pissy about things they can see on your property -- they can limit basketball hoops, number of cars in the driveway, colors, number of bushes and/or trees (and the sizes), ornamentation, whether you can leave your garden hose visible, where you can place your trash cans. Try to find out if there is a HOA website for your area and see what the common complaints are (on both sides, the homeowners and the HOA; homeowners can create their own problems for everyone else too).

I've listed most of the doom and gloom I can think of, but really, most of it doesn't come up if you're careful where you buy and how you live. I've owned homes for almost 30 years, and would never rent again. The tax benefits are definitely worth it (at least until Congress takes them away), the rates and prices will probably never be lower, and the home market will turn around, so it is an investment for your retirement or child's future. While I'm not fond of HOAs, I can appreciate what they are trying to do and if you are going to live in a 'community' it's better the homeowners are in charge than the local government or an outside (sometimes out of state) agency. (My husband and I have stayed active on the board or at least on a committee over the last ten years, to try and make sure the stupid is controlled -- the meeting can also be entertaining).

Buy the Far West area (78731), near Murchinson.

If he's smart, he can go to the magnet school at LBJ (cross town), otherwise Anderson is fine

Some practical stuff not covered above:

Check the outside environment. Trees dying/close enough to the house to provide a tree roach highway? Any signs of subsidence under the garage/walkway/driveway? Any major cracks in concrete patios or decks? Neighbors have pest problems? Before buying, go there at varying times of the day/week to get a feel for the activity/noise level of the neighborhood.

Check the foundations and any signs of foundation trouble such as uneven floors, doors that don't fit their frames, or cracks in walls and ceilings. The basement of a house I looked at was buckling in: not good. Also check the basements for any signs of water damage; if it's newly finished, try to check under carpeting and panelling for (possibly purposefully) hidden damage.

Budget for appliances. I bought a house with washer/dryer/range/fridge included; they all had to be replaced in under a year.

Expect to pay double homeowners insurance for the first year. One for that year, one for the next year.

Check attic ventilation; you should have vents at front, back, and sides, not just front and back.

Start asking NOW for good handymen/plumbers/electricians. Nothing sucks like a busted toilet at 11 pm on a Friday night and not knowing which plumber isn't going to gouge you or frack it up.

If any additions have been made to the house, make sure that they secured all permits and all of the work done is up to code. The city will make you tear it out if not.

Check the wiring. If the house was built around the 70's, chances are it has aluminum running through it. Fire hazard.

Watch HGTV. Seriously, before me and hubby bought a house we watched lots of 'Property Virgins' and 'House Hunters.'

These two shows actually helped us when it came time to start and go through the process. Realtors? Know everybody. Our Realtor was great and even helped us get a better mortgage loan.

Also any show with Mike Holmes, as he will explain where contractors and home inspectors tend to cut corners, and will explain what to look for. Holmes Inspection is a gold mine of things to be aware of when you get an inspection: did the inspector have an IR camera? Check the roof/venting/electrical/plumbing? Did they look for mold or water damage? Did they check crawl spaces/attic? Did they check insulation, especially around exterior walls and in the garage (both to prevent energy loss and prevent CO poisoning)?

I don't know much about buying a condo, but I do know that you need to make certain that the association has a reserve fund set up and see how well it is funded. The reserve fund is supposed to cover emergencies or rare occurrences that the association is responsible for, like replacing the roof or fixing the community pool or any other expense that affects the community. If they have a reserve fund and the roof or whatever needs to be replaced, you won't get hit as hard for the cost of repairs.

This is exciting! Do you think you'll be staying in northern Austin or are you also looking up further north? I'm in an apartment complex in Round Rock but it seems like a nice place to live and not that far away from your work. (35 is very close to a large chunk of it, as is the tollway.) I don't know what it would mean for transportation for Child though.

It's not a huge tip but: bring a largish marble with you. Put it in the center of the room and let go; put it along the walls in a couple of locations and let go. Does it move a lot? Does it roll in straight lines or does it go all over the place? Rent or own, people do really strange things to their floors (especially by layering things) and it's a pain in the ass to be screwing furniture to the wall or using shims every where just to make sure stuff doesn't tip over.

Make sure to test water pressure by turning on the sink and the shower then flushing the toilet. Close the tub drain, fill with a few inches of water, then return at end of tour to see if it's still there. Turn on oven and check for heat. Turn on heat and check for air flow out of each vent. And even though it's tedious, open and close every window, open every drawer, slide all closet doors. You'd be surprised how much money goes down the tube just fixing little things just because you're distracted at how cute the place is.

Good luck!

If you are going the condo route -

Make certain that the HOA rules are something you can live with, and enough to enforce a living situation that you can endure.

We didn't realize that smoke could come up through cracks in the flooring.

I am highly allergic to cigarette smoke.

One year after a trio of smokers moved in below us, our house now reeks of smoke, and my asthma has gotten worse.

There is no legal action we can take.

We are stuck, due to the housing market having fallen since we bought the condo - it's worth about 1/3 of it's inital price.

If we had known about the fact that smoke doesn't stay in the unit that causes it, we wouldn't have gotten a condo without a HOA that forbid smoking.

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