Overpaying on a house - how are you justifying it?

[Anonymous]

You can't buy a house through time travel, so I don't understand how buying a house at market price is "overpaying."

If you are only willing to pay 2023 prices then you will not get a house.

Take your emotions out of this. Treat it like an objective financial decision.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We move every 3-4 years, overpaying isn't a huge deal since we won't be living in any specific house for very long. It's almost like high rent but no one complains about our cat.

don't you end up losing money with all the closing costs? I mean more recently - I'm sure you could make money in 3-4 years but that wasn't always the case

houses in good areas go up a minimum of 2-3% a year normally, so you should never lose money if selling in 3-4 years

This is so misleading. Any significant maintenance costs - roof or HVAC or basement flooding or whatever - can easily result in someone losing money. And the closing costs are incredibly high. I didn't realize until we closed that the recordation and title transfer taxes alone were 5 figures. Sellers also have to deal with the agent fees (unclear how the NAR settlement will sort that out, but they're still high).

[Anonymous]

Anonymous wrote:I'm trying to buy a house and feel like I will be overpaying on anything I buy (even compared to the last 6-12 months, seems like prices are higher). I think I'm OK with that as long it feels affordable. I plan on being in my house for at least the next 10-20 years hopefully, so down the road I don't think it will be a big deal.

Has anyone felt like they overpaid but justified in that way? I'm buying a house because I want a house, and I want to enjoy living in it. The financials come second for me (again, as long as I'm not stretching myself).

I'll rather overpay than lose a desirable house in a competitive market while I'm on a timeline. If you can hold on to the house until market can pay it back or more, real estate cost evens out.

[Anonymous]

Anonymous wrote:We move every 3-4 years, overpaying isn't a huge deal since we won't be living in any specific house for very long. It's almost like high rent but no one complains about our cat.

What a waste on all the fees!

[Anonymous]

There are still some houses that sold at the peak in 2005 that are selling for less today. Ouch.

On the other hand, there's 19 years of equity in the property.

[Anonymous]

We're in it for the long haul, and the price will certainly increase in the next 25 years.

[Anonymous]

Anonymous wrote:There are still some houses that sold at the peak in 2005 that are selling for less today. Ouch.

On the other hand, there's 19 years of equity in the property.

Find me four houses in the metro DC area that are selling for less than their 2005 price.



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Still Waiting.

[Anonymous]

Anonymous wrote:

Anonymous wrote:There are still some houses that sold at the peak in 2005 that are selling for less today. Ouch.

On the other hand, there's 19 years of equity in the property.

Find me four houses in the metro DC area that are selling for less than their 2005 price.



Waiting





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Still Waiting.

Not that PP but I know a condo market example, sadly. Hit 2005 price finally in 2021 before rates went all the way up. But most recent sale was a penthouse unit that would be expected to close above - it did but only with large closing cost credit for a net below 2005 price for non-penthouse. So, in net, no price appreciation at all since 2005. These are condos, yes, so perhaps not relevant to discussion of SFH, but it was supposed to be the way for people to get on the property ladder.

[Anonymous]

In 1995 DH and I felt really bad that we paid $225k for a Hill townhouse.

Not saying that to gloat, just that anything at a certain moment in time can feel like overpaying.

[Anonymous]

I overpaid on a house I bought under duress last summer. We were relocating and needed something quickly. I hope over the next few years the house value appreciates enough to reach and then bypass the purchase price.

[Anonymous]

I overpaid by probably $50-75K at least in the fall and totally regret it. Had to buy without inspection, house is a money pit and everything has been done as poorly and Che as ply as possible.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:There are still some houses that sold at the peak in 2005 that are selling for less today. Ouch.

On the other hand, there's 19 years of equity in the property.

Find me four houses in the metro DC area that are selling for less than their 2005 price.



Waiting





Waiting






Still Waiting.

Not that PP but I know a condo market example, sadly. Hit 2005 price finally in 2021 before rates went all the way up. But most recent sale was a penthouse unit that would be expected to close above - it did but only with large closing cost credit for a net below 2005 price for non-penthouse. So, in net, no price appreciation at all since 2005. These are condos, yes, so perhaps not relevant to discussion of SFH, but it was supposed to be the way for people to get on the property ladder.

Condo ownership is a scam, unless you can purchase the entire building don’t buy it. They don’t hold their value well and have expensive HOAs/maintenance fees. Buy a SFH, townhouse or rent. Buying a condo is a path to poverty.

[Anonymous]

Are appraisals actually coming thru at the offering price? I’d think that we would see some check on prices via appraisals falling short given the interest rate trajectory.

Ironically, appraisers were super tough in the 2010-2014 period when prices bottomed after the GFC. It’s almost quaint to think about how they were hassling folks to come up with another $25-50K in cash to purchase a Petwoth rowhouse for $500K in 2012.

[Anonymous]

Anonymous wrote:Are appraisals actually coming thru at the offering price? I’d think that we would see some check on prices via appraisals falling short given the interest rate trajectory.

Ironically, appraisers were super tough in the 2010-2014 period when prices bottomed after the GFC. It’s almost quaint to think about how they were hassling folks to come up with another $25-50K in cash to purchase a Petwoth rowhouse for $500K in 2012.

I've heard of houses not appraising recently. But everyone is waiving the appraisal contingency, so don't think that will be a check on prices. You just pay up the difference.

[Anonymous]

Anonymous wrote:We move every 3-4 years, overpaying isn't a huge deal since we won't be living in any specific house for very long. It's almost like high rent but no one complains about our cat.

I think you have it backwards.

Overpaying (which tbh, isn't really a thing. whatever someone is willing to pay is the value) isn't a huge deal if you plan on staying for 10+ years. Overpaying when you move every 3-4 years opens you up to a lot of volatility and fees