T Nation

Traveling or Staying Put During Paternity Leave

100%. Don’t hire a friend. Hire an experienced person. I interviewed four agents before I sold my last house.

I don’t like real estate agents, because the cost of entry is low and it’s a booming market. Find someone who isn’t riding a wave after being in an essential oil MLM for the last five years.

Buyers agents I look for someone patient who has lots of connections and leads. My current home that will be done in two weeks, I only got because my agent knew a builder who had property.

Sellers, I look for aggressive who research and are solid.

I also prefer smaller local firms, who have their name on the business. Skin in the game and all vs. someone who bought into a national name.

1 Like

@dchris @flipcollar Listened to a BiggerPockets podcast this morning and chatted with a friend who’s knowledgeable about finance. Here’s a question: the market is really inflated right now, especially around me. People are overpaying like crazy. I really want to buy a house but don’t want to do it at a bad time.

That said, what do you think of waiting it out and, instead of potentially overpaying on a house (say paying 450 for a house that’s normally 375), continuing to rent for a year while investing the ‘house down payment’ fund in stocks? Granted, I know you can’t really time the market, and there’s no guarantee it’ll go down…just seems pretty inevitable. Buying in a bubble would put us in a tough spot.

Careful, the stock market is at all time highs.

Good point. Housing has been up year over year since 2011. But the trends also looked like that from 2000-2008. That said, the underlying conditions of the Big Short don’t exist.

I don’t think we will see a housing crash like what we did in 08 any time soon. Perhaps a small drop in price. The stock market is much more likely to have big fluctuations (at least historically). It is at an all time high right now. It could hold steady, go up, or down. We don’t know on that one. The government is pumping money in, so it may go up a bit further.

Predicting what the market will do short term has not been something anyone has been able to do so far (outside of insider trading type stuff). Perhaps some claim to be able to do it, and have done it, then they try again and prove they were lucky the first time.

One thing to bet on is that long term the overall market is going to increase. It is a bet that our GDP increases over time, which has happened over the long run for the last long time. That being said, if I had debt when the market was high, I might choose to pay that off vs invest. Either way, you are getting returns on your money, and with the debt it is a short term and long term guarantee. The investment might take a long time to get a good return on when the market is high.

I think that’s a reasonable and historically reliable perspective.

It’s a tough call. The Bigger Pockets podcast I listened to this morning on first-time home buying elaborated on how nuanced the decision is. Owning vs. renting is really not black and white, especially if you aren’t certain for how long you’ll stay in an area. If I had to guess, I’d estimate we’ll be around here 3-7 years before I take a new job somewhere else. But who knows – I could be here longer.

IME, most who say they are going to be somewhere 5 years end up there much longer. YMMV.

Really?

Right now the housing market is so good (for sellers) I’d skip the real estate agent. I sold my house myself in 10 minutes for asking price. Even had another offer come in over asking price and THEIR real estate agent helped me try and get out of my (then) current contract :joy:.

Took my own pictures and made my own adds on Zillow and some other apps. If a Neanderthal like me can do it, anyone can do it.

I mean some have gotten it right a few times. Guys like buffet and Boggle say they can’t do it, and are skeptical of people who say they can. This goes for trying to pick winning stocks. You hear lots of stories of people doing it, but not very many stories of the countless people who lost their ass doing so. Buffet won a bet with about a dozen hedge fund guys, that over a year he would do better than they could just using an index fund. He won. Many people don’t put in because the market is high, and then it goes up 20 percent. I thought last year before covid-19 that it was getting pretty high. I’ve gotten like a 30 percent plus return since then. Others put in, and it goes down. I invested as much as I could when low, and have double the risk. It is just really hard to predict.

That being said, when I feel the market is high, I would pay off debt as that has a guaranteed payoff.

I also think for most people if they don’t invest, they spend more. Most people would be well served just consistently investing in a broad swath of stocks (index with low fees). Obviously there are exceptions.

I will say when there is a down turn, dumping as much as you can almost always returns a lot.

1 Like

This is what gives me pause. I know you can’t time the market, but seems like a terrible time to be buying. People are dying to buy houses. As a buyer, you just don’t have leverage. That has to change at some point.

Agreed, it’s horrible for buying right now.

1 Like

Also just got reached out to by someone who wants to sublet our house…soooo, might be able to pull the traveling thing off without even losing money

2 Likes

Might work, might not.

Here’s the way I look at it. Houses are investments, but if you’re living there, it’s also a home. You have to decide how much value the latter part means to you. For me, I don’t try to time the market in general, I just make sure I buy in an area where I can expect value to increase, regardless of the housing market in general.

You also have to decide whether the market is artificially inflated, and if so, how significantly. Let’s say for the sake of argument, that there is a degree of artificial inflation going on right now, and that housing prices may dip later this year, early next year, something like that. How much do you think they’ll go down? Unless you’re expecting a true housing market crash (I see no evidence of that), then the degree of market correction probably won’t justify the wait. It’s hard to say, and all these concepts can be very neighborhood-specific too.

All that being said, if you buy a house that you love, at a price you are comfortable paying, then you didn’t overpay. Don’t get caught up in getting the absolute best value for your dollar. That’s a miserable way to live. Get the ‘big things’ right, and don’t sweat the minutia. It’s really easy to end up quibbling about a few thousand dollars here and there, and lose perspective on what you really want in a house, in life, etc.

this. The stock market is as much of a guarantee, short term, as real estate is. Which is to say, it’s not at all. The capital gains tax will almost certainly go up soon, and that MAY hit the stock market hard.

For sure, and again, this is why quality of life is an important factor. What you WANT, at the end of the day, should really determine what you do. Some people never buy a house, and that can be a completely reasonable decision. I’m addressing this with the assumption that you, personally, want to be a homeowner, that you don’t want to do this JUST for money.

All this tells me is that you didn’t ask enough, and that perhaps you would have come up with an appropriate asking price had you hired a realtor :wink:

kidding… but kinda not.

3 Likes

I have heard only for the wealthy, but that is a reasonable expectation. I don’t think we can know for sure on it, but that seems like a fairly direct incentive to leave the market for the wealthy if other investments are available.

I went 10k above the appraisal and then begged the appraiser to hook me up :joy:. But my area (I’m sure everywhere is) is literally booming. People can’t even find houses because they sell within minutes. It’s so bad now that real estate agents are going to knock on doors of houses their clients like and asking if they would sell for cash lol. The prices are also sky rocketing. If the housing market goes way down there will be a lot of people very unhappy with their new 200k house they paid 600 for.

It’s been great fun chatting with new neighbors who have recently moved to the area.

well, yea. That’s correct. But that’s why it will likely affect stock prices. The wealthy are who move the needle. If the wealthy sell off stocks en masse, the prices go down.

And I agree it is hard to predict how much this will actually affect the market, and more importantly how quickly it will recover. I would expect a relatively short term dip when this tax hike passes.

Are you saying the house went under contract, then the appraisal came in low? Or did you get an appraisal first for some reason?

Keep in mind, appraisals are at least in part based on the sales price itself. The house you’re selling can be used as a comp against itself, depending on the specifics of the market. The house I just bought was so unique that it was actually the only comp used… thus, sales price equaled appraisal, lol.

Yeah, they have, but a good few years of that was just the prices returning to pre-crash value. Just spit balling, and I know it varies regionally, but I’d say about 5 years of that increase was just returning to equilibrium , not actual increase.

Fair enough. I don’t know much about this stuff, having never owned a house…just reading up on it now – and getting solid advice from smart dudes around here! Though I am leaning toward not buying at this point, as I am unsure how long we’ll stay in this area.

I’m reading “First Time Home Buyer” by Bigger Pockets. Any other recommendations?!