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any advice on a fair price for this house in fremont

By peninsulabuyer   Follow   Mon, 8 Oct 2012, 8:58pm   2,696 views   26 comments
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http://www.redfin.com/CA/FREMONT/4077-FENNEL-TER-94538/home/28555628

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1. E-man Follow Befriend (31) 34 threads 2,612 comments San Jose, CA Premium

   1   9:17pm Mon 8 Oct 2012   Share   Quote   Permalink   Like (1)   Dislike   Protected   Nice almost new house. It looks like a zero lot line SFH. So someone bought it brand new 2 years ago for $673k, now marked it up 10% and try to sell it? Not bad. My fancy calculator says with 20% down @ 3.5% interest rate, your monthly payment is approx. PITI + HOA = $3,700/month Principal paydown (forced savings) = $950/month. Say 28% tax bracket = $770/month saving. 3% loss of opportunity cost on down payment = $375/month. Net carrying cost = $2,350/month. If, that's a big IF, housing appreciates at an annual pace of 3.75%, you're living there for free. How much can that house rent for? Good luck.

2. Raw Follow Befriend 10 threads 694 comments

   2   9:37pm Mon 8 Oct 2012   Share   Quote   Permalink   Like   Dislike   $3,000 per month

3. robertoaribas Follow Befriend (23) 56 threads 4,081 comments Scottsdale, AZ robertoaribas's website

   3   9:44pm Mon 8 Oct 2012   Share   Quote   Permalink   Like   Dislike   E-man says Say 28% tax bracket = $770/month saving. BS unless you have a lot of other deductions...

4. E-man Follow Befriend (31) 34 threads 2,612 comments San Jose, CA Premium

   4   9:59pm Mon 8 Oct 2012   Share   Quote   Permalink   Like (1)   Dislike   Protected   robertoaribas says E-man says Say 28% tax bracket = $770/month saving. BS unless you have a lot of other deductions... :) You forgot we pay almost 10% on State Income Tax. :)

5. peninsulabuyer Follow Befriend 7 threads 11 comments

   5   10:05pm Mon 8 Oct 2012   Share   Quote   Permalink   Like   Dislike   Thanks everyone! As E-man pointed out, it all depends on what is the future appreciation of this house. It is indeed a big IF. Irvington is an okay area.

6. peninsulabuyer Follow Befriend 7 threads 11 comments

   6   10:25pm Mon 8 Oct 2012   Share   Quote   Permalink   Like   Dislike   e-man, The seller probably will pay 6% as commission. So I do not think he is going to get a 10% return unless I am missing something.

7. thomaswong.1986 Follow Befriend 15 threads 3,107 comments

   7   10:26pm Mon 8 Oct 2012   Share   Quote   Permalink   Like   Dislike   peninsulabuyer says Thanks everyone! As E-man pointed out, it all depends on what is the future appreciation of this house. It is indeed a big IF. Irvington is an okay area. future appreciation as researched out by robert shilling comes out to rate of inflation. any excessive appreciation will eventually correct downwards.. so like its been said many times.. 30-40% above 1996-97 prices gets you to riskless "fair price".

8. E-man Follow Befriend (31) 34 threads 2,612 comments San Jose, CA Premium

   8   10:55pm Mon 8 Oct 2012   Share   Quote   Permalink   Like (1)   Dislike   Protected   peninsulabuyer says e-man, The seller probably will pay 6% as commission. So I do not think he is going to get a 10% return unless I am missing something. Yes, but 10% appreciation in 2 years is pretty sweet assuming the seller would get the asking price wouldn't say? Historically speaking, the Bay Area has been appreciating on an average of 5% annually. Pretty crazy I know. This is the reason why I believe this is an opportunity once in a lifetime for investors. The acquisition cost NOW is even cheaper than the 90's cycle. My partner and I did some fancy calculations today. If history is any indication, we will turn our $200k investment in real estate today to $1.2M -$1.4M in 10 years. Although our model is relatively conservative, there were a couple of ASSumptions that went into the calculations. We'll find out in 10. :)

9. E-man Follow Befriend (31) 34 threads 2,612 comments San Jose, CA Premium

   9   10:58pm Mon 8 Oct 2012   Share   Quote   Permalink   Like (1)   Dislike   Protected   robertoaribas says E-man says Say 28% tax bracket = $770/month saving. BS unless you have a lot of other deductions... $21k in interest. $9k in property tax. $3.7k/person for exemption. Not including state income tax and local taxes, etc. That's over $37k for deductions for a couple with no kids.

10. thomaswong.1986 Follow Befriend 15 threads 3,107 comments

    10   11:07pm Mon 8 Oct 2012   Share   Quote   Permalink   Like   Dislike   E-man says If history is any indication, we will turn our $200k investment in real estate today to $1.2M -$1.4M in 10 years. doubtful... we have been bleeding both growth in new business and jobs. Frankly its far better for employers to move jobs elsewhere. You would have a better chance you made the $200K investment in 1970 and waited, and we are not going to have the same pre-year 2000 economy.

11. robertoaribas Follow Befriend (23) 56 threads 4,081 comments Scottsdale, AZ robertoaribas's website

    11   11:24pm Mon 8 Oct 2012   Share   Quote   Permalink   Like   Dislike   you don't deduct interest, unless you itemize... If you don't have any other deductions you LOSE your standard deduction to itemize... that reduces the actual savings a big big amount...5950 single, 11090 couple... + dependts... so 21k in interest - Couple 11090 = approx 10K... 40% total rate, saves about 4K in taxes a year. Not insignificant amount but not as big as usually advertised. I just looked at 10 realtor sites, and they all screwed up their advice on this.... I have paid received exactly zero benefit for mortgage interest deduction on my primary residence for the past 10 years... turbotax does the calculation properly.

12. robertoaribas Follow Befriend (23) 56 threads 4,081 comments Scottsdale, AZ robertoaribas's website

    12   11:31pm Mon 8 Oct 2012   Share   Quote   Permalink   Like   Dislike   here is the best online calculator i can find for it.. 99% of all the REALTOR pages are completely wrong... http://www.hughchou.org/calc/deduct.php

13. E-man Follow Befriend (31) 34 threads 2,612 comments San Jose, CA Premium

    13   12:04am Tue 9 Oct 2012   Share   Quote   Permalink   Like (1)   Dislike   Protected   robertoaribas says here is the best online calculator i can find for it.. 99% of all the REALTOR pages are completely wrong... http://www.hughchou.org/calc/deduct.php Roberto, I just plug in all the numbers in the link you provided. It said $9,727 of savings. That's pretty damn close for government work. $21k interest $9k prop tax $10.5k state & local tax. Say 7% tax rate This is for a couple making $150k/year. For a couple making $200k, you're looking at $11.5k of tax savings.

14. SFace Follow Befriend (2) 61 threads 1,336 comments Premium

    14   2:30am Tue 9 Oct 2012   Share   Quote   Permalink   Like   Dislike   Protected   AZrob, you are a smart, but simply wrong on this one. The context is this is a Fremont, CA buyer. A 600K loan. Surely, the profile of this buyer is at least 150K-200K income range. Your position is the interest and property tax gets eaten up by the standard deduction, but the buyer noted above will not. Because at 150K+ income level, they will pay the below just for working: 8K+ in state income tax 1,500 in State disability insurance which is another form of state income tax 500-1000 in personal property tax, or car tax. 500-2000 in charitable contribution. most will take 500 because a long form is not required. Just working alone will put them into itemize position anyway, the property tax and interest (from owning) is likely all gravy. 30K @28%/25% federal is 8K in tax benefit. 21K @ 10% state tax is all gravy, another 2K in benefit. So the difference between renting and owning is really closer to 10K in federal and state income tax. It makes up very tough for workers to rent long term given the above. Given that the interest rate is so low now, the MID is not as important anymore. Based on the mechanics of how these things work, MID and property tax is by far the most lucrative in SFBA, DC, NY, and Boston. It is useless in Texas, Florida, NV and pretty much all the flyover states including AZ. So I can see how it is subject to debate.

15. peninsulabuyer Follow Befriend 7 threads 11 comments

    15   6:57am Tue 9 Oct 2012   Share   Quote   Permalink   Like   Dislike   A comparable property (bigger sqft) sold 15 days ago in the same complex for 755K ($337 per sq ft). http://www.redfin.com/CA/FREMONT/4089-FENNEL-TER-94538/home/26844959 If I apply this (337 per sq ft) the price is coming down to 621K! How important is per sq ft when comparing two identical houses but with different sq ft? I am very confused on what is the significance of per SQ FT price? If it is NOT important why do all real estate listings show it?

16. E-man Follow Befriend (31) 34 threads 2,612 comments San Jose, CA Premium

    16   8:05am Tue 9 Oct 2012   Share   Quote   Permalink   Like   Dislike   Protected   2 years ago, this house was sold or $673k & the bigger house was sold for $688k. How did that work out in price per square foot 2 years ago? Based on the same metric, I'd say the smaller house will likely sell for $740k.

17. E-man Follow Befriend (31) 34 threads 2,612 comments San Jose, CA Premium

    17   8:23am Tue 9 Oct 2012   Share   Quote   Permalink   Like   Dislike   Protected   peninsulabuyer says A comparable property (bigger sqft) sold 15 days ago in the same complex for 755K ($337 per sq ft). http://www.redfin.com/CA/FREMONT/4089-FENNEL-TER-94538/home/26844959 If I apply this (337 per sq ft) the price is coming down to 621K! How important is per sq ft when comparing two identical houses but with different sq ft? I am very confused on what is the significance of per SQ FT price? If it is NOT important why do all real estate listings show it? These two homeowners are lucky that they're able to sell for more than they bought just 2 years ago. For the one that bought recently and the one that will buy this house, they're not as fortunate because they're paying 10% more. This goes to show timing is so critical. We don't know where the bottom is till it's in our rear view mirror.

18. edvard2 Follow Befriend 38 threads 2,313 comments

    18   8:25am Tue 9 Oct 2012   Share   Quote   Permalink   Like   Dislike   We bought around 4 months ago so I have some experience in buying in the Bay Area. My advice would be to talk to your mortgage broker about what the actual costs could be because one thing that can't be understated is property taxes. Every county and city will have different taxes. So your taxes could be significantly higher or lower depending on the area. At a 20% down payment you're looking at $134,000 right out the door. I came up with a rough estimate of around $2,450 per month total, not including taxes. You will need to add in the taxes and then you'll get a "true" actual monthly out of pocket total.

19. tiny tina Follow Befriend 2 threads 175 comments

    19   9:28am Tue 9 Oct 2012   Share   Quote   Permalink   Like   Dislike   E-man says My partner and I did some fancy calculations today. If history is any indication, we will turn our $200k investment in real estate today to $1.2M -$1.4M in 10 years. Although our model is relatively conservative, there were a couple of ASSumptions that went into the calculations. We'll find out in 10. :) Care to elaborate? $200k investment in a SFH, 4-plex, ... ? What zip? Are you still purchasing things on the courthouse steps or going another route?

20. robertoaribas Follow Befriend (23) 56 threads 4,081 comments Scottsdale, AZ robertoaribas's website

    20   9:45am Tue 9 Oct 2012   Share   Quote   Permalink   Like   Dislike   War says peninsulabuyer says any advice on a fair price for this house in fremont New: Figure roughly $60/sqfoot, add lot costs(lots are cheap) plus site package roughly $20k. Resale: Depreciate new cost above depending on condition. sure, that might work to buy a steel shed in Kansas... figure WAR is an idiot...

21. robertoaribas Follow Befriend (23) 56 threads 4,081 comments Scottsdale, AZ robertoaribas's website

    21   9:52am Tue 9 Oct 2012   Share   Quote   Permalink   Like   Dislike   War says Roberto My Pimp.... You have alot to learn about estimating and bidding work. Why not do your credibility a favor and learn something. Anything. why not educate us all then? show me any home in the past 50 years selling in the bay area at prices your advice would give? of course you can't, because you are a trolling idiiot...

22. robertoaribas Follow Befriend (23) 56 threads 4,081 comments Scottsdale, AZ robertoaribas's website

    22   10:11am Tue 9 Oct 2012   Share   Quote   Permalink   Like   Dislike   War says Then develop a bid estimate for us Roberto. Let's see it. long sense done, but it will go far over your head... http://www.zillow.com/advice-thread/When-to-buy-a-home-for-the-thinkers-in-the-room/46686/ that's my thread back when I was a "doomer". My account was deleted for calling out to many agens on their, "buy now" advice... contrary to what you think, I study the math and for many years, was anti buying.

23. Patrick Follow Befriend (54) 5,240 threads 6,175 comments 46 male Menlo Park, CA Premium

    23   10:15am Tue 9 Oct 2012   Share   Quote   Permalink   Like (1)   Dislike   Protected   Actual value is something like half a million: http://www.patrick.net/calculator.php?uaddr=%2C+&rent=3%2C500&price=747%2C900 The extra $250K would be just a gift you're making to the sellers and the agents.

24. robertoaribas Follow Befriend (23) 56 threads 4,081 comments Scottsdale, AZ robertoaribas's website

    24   10:40am Tue 9 Oct 2012   Share   Quote   Permalink   Like   Dislike   SFace says AZrob, you are a smart, but simply wrong on this one. The context is this is a Fremont, CA buyer. A 600K loan. Surely, the profile of this buyer is at least 150K-200K income range. fair enough, the best calculator I can find proves me wrong... :-)

25. bmwman91 Follow Befriend (8) 38 threads 1,606 comments Mountain View, CA bmwman91's website Premium

    25   11:27am Tue 9 Oct 2012   Share   Quote   Permalink   Like   Dislike   Protected   Patrick says Actual value is something like half a million: http://www.patrick.net/calculator.php?uaddr=%2C+&rent=3%2C500&price=747%2C900 The extra $250K would be just a gift you're making to the sellers and the agents. BUT WE HAVE TO BUY NOWWWWWW! We will be priced out FOREVER, and condemned to live in rentals with rapists and chronic public masturbators looking in our childrens' windows! It's all good since my partner and I will always be employed and get 15% raises every year, and if we don't we will just squat for 2-4 years! Borrowing my way to wealth is as easy as 1...2...3!

26. dhmartens Follow Befriend (1) 13 threads 51 comments Reseda, CA

    26   3:47pm Tue 9 Oct 2012   Share   Quote   Permalink   Like (1)   Dislike   I'd wait till after the election....period