Gregory Nelson

The tax credit brings you a few $K. Entering into an ill-advised home purchase can cost you far more than that.

If you want or need a house, buy a house. If renting is a better choice, then rent. Don't let the tax credit entice you into an action that might not fit your current needs.

Given the negative reaction to your job conditions in the other thread, I suspect you might be looking for your next job as soon as you begin this one. You won't want to be stuck in Duncanville if your next job is located in McKinney.

UA Fan

Thanks all, is Duncanville a good area to be a rental investor? Is it easier to rent a condo/independent home?

One of the independent houses i am looking at is a short sale, in general do I need to keep anything in mind when buying such houses? Are they a safe buy?

uncertaintraveler

Respectfully, given your questions, I have my doubts if buying a house is such a great idea for you.

UA Fan

Please be totally frank, kindly elaborate.

Gregory Nelson

1. You don't know where your spouse will be working.
2. The south end of DFW is not as desirable as the north end.
3. Your job offer seems sub-optimal, which leads me to believe you are viewing this as a stepping-stone, rather than a long-term multi-year situation.

Just like uncertaintraveler, I'm saying this respectfully. A house can become an albatross very easily. Your situation doesn't appear to be "settled" enough to rush out and buy a house.

uncertaintraveler

Well, for starters, your posting history in OMNI indicates, to me, a lack of general real estate awareness.

For example, you created this thread , in which you started off by stating, "Since I have some free time this summer I was thinking of buying a house. This is my first one and would like any advise."

Then there was this thread, started roughly a year and a half later, in which you seemed to not know what basic real estate terms were (VA loan; FHA; SFR).

Then you create another post, in which you ask for "tips on investing in real estate."

In a more recent post, you ask about square footage definitions.

There's certainly nothing wrong with asking these questions, and I don't mean to dissuade you from asking more of them, but if you are thinking of dropping an 80% down payment on a house, I would hope that you would have a more fundamental understanding of what it is that you buying and getting yourself into, and that you aren't relying solely on the opinions expressed on an anonymous bulletin board that (i) isn't devoted to real estate, and (ii) are proffered by those who, quite likely, have no skin in the game.

UA Fan

I selected Duncanville as it is within an hour of most DFW suburbs and has at least a decent school. So my wife can get a job within a commuting distance. My offer has been improved (see other thread). I can almost buy a house full cash down, so the savings in rent will offsett other loses right?

I am not meaning to be argumentative, the very reason i am posting here is to hear others opinion, so please please critique me. I am new to buying houses, so I want all the advise I can get.

uncertaintraveler

If you are moving to Dallas/Fort Worth due to your job, and you have never lived in the area before, I'd be inclined to rent a nice apartment for at least a year to get to know the area better, DFW traffic patterns, and to be sure of the job situation.

Gregory Nelson

I would say that no, Duncanville is NOT a good area to be a rental investor. You'd be going up against many, many established local landlords with multiple properties in their inventory.

I would stay far away from buying a condo in the current DFW market, and certainly from buying one with the intention of renting it out.

It can takes months and months for a short sale to close. You're buying from someone who is obviously in dire financial straits, so maintaining the home is likely to have been a low priority for some time.

UA Fan

Does anyone recomend hiring a real estate agent? I found someone very helpful and asked to contact her even if we found properties that she was not selling. She said she can assist with the contracts. She seemed to imply that the buyer does not pay her anything, is that true?

secretbunnyboy

As an aside from a non-DFWer: 'round here, when there's a 1960s house on the block, it's known as "the new place down the street". OK, please return to regular programming.

UA Fan

How is Grand Prairie area? Specifically the area south of I-20 and near Joe Pool Lake?

Mr. Morris

Echoing other's suggestions, I strongly suggest that you consider renting for at least a year. Here are the issues to keep in mind:

1. Financially, the best deal is to rent in Dallas. There is no state income tax and property taxes are relatively high. Assume that you'll pay about 2.5% of the value of the house in property taxes every year. Without the homestead exemption (i.e., if you rent it out later), the taxes are higher, so assume around 3%. If you look around, you can rent cheaper than the after-tax cost of mortgage, maintenance, property taxes, etc...

2. South Dallas is not a desirable place to live in the metroplex and the property values are pretty stagnant. Although you may love it there, it is risky and once you buy the house you'll be stuck with it.

3. South Dallas is not centrally located, so it could be a very long commute for your wife. Until you both have jobs, it doesn't make sense to buy.

4. Renting is cheap in Dallas. Just shop around. There are short-term corporate apartments, but you pay extra for that. It would probably make more sense to get a 6-month lease somewhere to start out with.

5. You shouldn't make your decision based on the $8k credit. Closing costs on both sides of the transaction (buy/sell) and potential loss if you have to sell quickly (including real estate commissions and title insurance) will cost you more than $8k.

6. Don't assume you'll convert it to a rental. Rents are cheap in Dallas, so it may not make financial sense and if you are in Duncanville, it may be difficult to rent it out.

UA Fan

Thanks Mr. Morris I have decided against Duncanville and have moved to Grand Prairie (Westchester area). I am most probably putting all cash down for the house and so renting for a year will cost more than the property tax per month

TMOliver

One last caveat....

Don't let the $8,000 potential tax credit spur you to precipitous decision making. The harsh reality of the present real estate market is its capacity to rise and fall as a result of unintended consequence of events. The day after the tax credit expires, homes on the market in the Metroplex and across the country will each be worth less than they were the day before. No, perhaps not $8,000 or even $6,500, but less, likely several thousand dollars less in the case of houses that were priced "in line" with real value.

I'll agree that S. Grand Prairie may be better than Duncanville, but shucks, you're getting closer to Midlothian and Waxahachie every day. Grand Prairie was in its early years the quintessential homeground for blue collar rednecks, so be careful of streets where there are more than one or two front yard planters made from old tires slashed like starfish. ;-P (or flower beds curbed with old car batteries, pink flamingos or large plastic sunflowers)

A clue relating to making an offer on a house.....
Check the number of days the house has been "on the market". The longer on the market (without evidence of major price drops), the less you can optimistically offer. Whether you're talking about a homeowner or a builder/developer, desperation eventually sets in. I know a builder with 2 nice new suburban homes (less glamorous area, much more house than in upscale areas) on the market 4 months originally priced at $175,000. Offer him $150,000 today, he'd leap. Offer $10,000 less, and depending upon how many anti-depressants he's taken, he might jump at that.