Only the most addicted to home shopping should venture here

Arghhh!!

So, I’ve been home shopping of late. Quite an experience for the first time buyer, and I’m in the odd position of being such as well as contemplating this venture in the light that whatever I buy may well be where I live the rest of my life.

Whoohoo! Sticker shock! I started with the idea that I wanted a free standing home (no shared walls), but I’ve had to scale that back to a townhome if I want to stay anywhere near my preferred areas.

It’s been an interesting experience so far. One odd sensation has been that of going through absolute strangers’ homes while they’re not there and looking at their bathrooms and in their closets. And meeting their dogs (What’re you doin’ here? Are you tasty? I think I’ll find out!)

The epochs of home building in the area have become clear to me. The Neartown/Montrose/Museum District areas of Houston in which I’m shopping were, for the most part, originally developed between about 1918 and 1936. Many of those homes are still here, although they’re being or have been displaced by the, as I’ve identified them, four major waves of regentrification/redevelopment.

Many of the originals have been updated, but the Gulf Coast’s persistent slide towards the sea is relentless and, in comparison to the newer development, they’re, well, old. The first wave of regentrification began about 1970 and concentrated mostly on updating existing homes. Development of townhomes began in the 1970s, and most of those efforts consisted of putting two homes on one lot. There was a spate of cheap condo building in the mid-80s that ended abruptly with the oil crash of '86 and development/redevelopment was rather quiet until the townhouse boom began in about 1994-95. These recent efforts almost always consist of knocking down a single family dwelling and putting up 4 to 6 townhomes on the same lot.

Now I can usually date something on my first pass. The '70s efforts were swankier than the originals and often include tell-tale time stamps such as the always dysfunctional intercom. Projects from the 1980s almost universally use cheap construction, but do include what I’d guess you’d call amenities. Anything built after 1992, even the cheapest townhome, has features, such as granite countertops and marble foyers or fireplaces, that you just don’t see in the preserved homes of the '20s and '30s. Unless, of course, they’ve been updated.

One place I looked at this past weekend, in an historic district, was built in 1890. While I’d never live there, I must admit the visit had me channeling Grandma. Only place I’ve seen with transoms.

The most valued lesson I’ve taken home so far is that I’m not likely to find the perfect place. There’re so many variables. One place has a wonderful gutted and reconstructed set of bathrooms and kitchen, but no pool.

And I’ve fixated on a pool.

With regard to the just mentioned place, it is beautiful, and I liked it as soon as I walked in. On the seller’s disclosure I noted that there is a place for the seller to disclose any death of a person on the premises, and such was noted. My realty agent advised me that natural deaths are not required to be reported so I researched it and, sure enough, the previous resident was bludgeoned to death in the bathroom a little over a year ago. The current seller never lived there - he just bought it to upgrade for sale.

Apparently some people will just not buy a place where there’s been a murder. And a seller must disclose that. That doesn’t bother me. A ghost? Eh, someone to talk to (no, I don’t believe in ghosts).

So, I’ve fixated on a pool.

The only other three places I’ve found with pools also have their warts, and they’re both at the upper end of my budget.

I don’t want to shop for a year - I’m ready to go now.

Which brings up another subject.

After noting that very few offerings seemed to really fit what my agent seemed to percieve as my wants and needs for a lifetime retreat, I broached the subject, both here and IRL, of a transitional place. My agent and the TM fired back the general perception that, unless you were willing to stay in a place for at least five years, you’d likely lose on the overall financing.

But what if one were to buy at the extreme low end with no mortgage involved?

Well, anyway, what’s your experience?

Things to keep in mind about a transition home. You will still pay commission when you sell the house. Usually about 6%. You will have closing costs on both your purchase and your sale. 1% range, I’d guess, if you don’t have mortgage costs. You will be paying taxes and maintainence on the house during the transition time.

Add those up and compare to what you would be paying to rent for that time.

I don’t know if this is the same in the States as here, but a quick turnover in property that includes a profit can trigger Revenue Canada to hit you with a Capital Gains tax, even on a primary residence. Well, I guess Revenue Canada wouldn’t be too interested. Unless they have a much longer reach than I think they do.

ANYway, I don’t think there’s anything wrong with a transitional place, if you’re willing to move twice and the real estate market is firm enough that you’re not likely to lose money on the sale. And what Tastes of Chocolate said.

Oh, decide what your non-negotiables are and stick to those. You don’t want to regret compromising on something you really didn’t want to compromise on.

Am I the only one that read the title and thought this would be about QVC and its ilk? I was expecting a discussion of Diamondfaux jewelry and overpriced sweaters.

Well brianjedi, you got me. I suppose I am a little bit to the side of the cultural mainstream - I missed your reference.

While I appreciate that there are costs associated with any sale of a home, those coming both with the acquisition as well as the disposition, what I’m wondering about is whether or not a transitional home purchase without a loan weighted on the front end towards interest might be economically feasible. The sale costs come whether it’s financed or not, as do the taxes and maintenance.

The only other three places I’ve found with pools also have their warts, and they’re both at the upper end of my budget.

Want me to balance your checkbook?

Are you considering the potential state of the real estate market in a couple of years? Even if you’re able to buy without financing now, will that property be worth as much in two or three years when you want to sell? I’m just pulling numbers out of my head, but if you pay $200K tomorrow, it might be worth either $150K or $300K by the time you wish to sell. Short-term real estate investment is a gamble (and by “short-term,” I mean less than 10 years or so, especially in today’s market). That’s been my experience, although I know nothing about the the area in which you want to buy. So take my $0.02 for what it’s worth.

“Seemed to perceive”? This set off alarm bells. If your agent is trying to tell you what he or she “perceives” as your wants and needs, then go find an agent who will actually listen to you. Or, if you can find one, go to a buyer/broker. That’s what I did, when I bought my first home. Basically, a real estate agent works for the seller, no matter what. Even though you’re the buyer, your agent is still splitting commission with the selling (listing) agent, and that commission is based on the selling price. So it’s in the best interests of both agents to get the highest price, for their commissions, obviously.