A Good Buy?

[brian.wolfe86]

Hi,

My fiancee and I are first-time homebuyers and we were hoping to get some advice on whether this community we're looking at building a home in is a good idea or not.

Here are some of the particulars about us:

-Our total monthly income is ~2600 after taxes

-We have no current debt other than my student loans (which I will not have to begin repaying until November at a rate of ~180 month)

-We are looking to close before December 1st (to take advantage of the $8k tax credit)

-After approximating finances, we will have ~14-15k to bring to the table when we close in November (including the tax credit...we have an arrangement with a friend to use it as part of our down payment)


Now, for some details about the house we're looking at:

-Located in the neighborhood of Waterleaf Dr in Avon, Indiana

-Here are the basics on the house:

-1725 sq. ft.

-3 BR/2 Bath

-Builder: Arbor Homes

-Lot size ~10500 sq. ft.

-Sod in the front/side, hydroseeding in the back

-Backs up to an open field (3-5 years, will be another set of houses from the same builder)

Options selected:
-Brick front
-Wood-burning fireplace (family-room)
-Garden tub and deluxe walk-in shower in master bath (increases total length of house by 2 ft.)
-Dual sinks in master bath
-Upgraded maple cabinets
-Vaulted 9ft. ceilings
-10' x 12' concrete patio in back
-Wiring drops for fans/lights in each BR
-Window grills all around the house
-Built-in microwave
-Smooth walls
-(No bonus room)

-Price with options: $140,000


Now, for my questions...

-All things considered, is this a good buy? (Please, ask questions if more detail is needed to make this a determination)

-Is Avon a good place to be buying a house? I've been looking at stats on it and it seems like a nice town, but I'm not sure...6k people isn't very large.

-We are planning on putting a 6 ft privacy fence around our backyard...when we move in 6-7 years and there are neighbors behind us, will this be enough privacy to still keep them interested in buying?

-This neighborhood is within 2-3 miles of a train station and within 5 miles of the Indianapolis International Airport...should I be concerned about noise from either of these?

Any other questions I should be asking?


Thanks a lot,

Brian

[Tim Shepard Destin]

You did a good job of outlining your specifics. However, the question is still too vague for most of us to answer since we don't have specific knowledge of your real estate market.

These are my comments/suggestions to help you figure out if this is a good deal.

1. Call a realtor in the area and tell them that you want to view 15-20 of the best homes on the market priced below $150k. This will help you confirm that this home stacks up well against the competition. Specify that the majority of these homes be outside of this specific neighborhood.

2. Ask the realtor to pull a list of all homes in this specific neighborhood that are currently for sale (already built homes) and another list of the homes that have sold in the past 6 months. I absolutely mean homes that have sold and closed. Do not let anyone use pending or "under contract" homes as a comparable. This will allow you to determine if this home is priced right. Make sure to consider sf, number bedrooms, baths, and other key features. Your realtor should also be able to find out if there were "hidden" incentives involved with the sales of the other homes. By "hidden", I mean closing costs, freebies, etc. that were provided but not reflected in the purchase price.

3. Ask the realtor for the number of homes in the general area that are priced below $150k and that are currently for sale. Then ask for the total number of homes sold in the same area for the past six months. This will tell you the inventory overhang in your market. If there are less than 8-9 months of inventory, then your market is still fairly strong. If there is 2-5 years of inventory, then you can expect prices to fall even more.

4. You mentioned that there is an adjacent developable tract owned by the builder. In a town of 6000, the absorption capacity can't be that great. If the builder can build 10 more homes then you are probably ok. However, if he has the ability to build 1000 more homes, then you better think twice. At some point, you may need to sell. In a buyers market, most neighborhoods struggle to appreciate while the builder is still building.

5. Spend some time in the neighborhood in the afternoons and on the weekends talking to current homeowners. Get their feedback on their experiences with the neighborhood and builder. You'd be surprised what you can find out by doing this one thing.

Good Luck!

[FrankN]

It certainly seems like a good buy from what you are describing. What I would do is have your agent do a CMA or (competitive market analysis) on the property. This will give you an idea of what the market is demanding for the home. But the main thing is don't focus so much on the price. Now a day everyone wants a good idea. If you found the home of your dreams, then you should put a competitive offer on the home. Finding what you want is better then just finding a good deal.

[Dallas Broker]

seems like a great buy, regardless of list price, I would negotiate down to the bone...there are some great deals out there right now, don't just settle for something you are emotionally involved with...look for a great deal and jump on it.