Author Topic: Am I crazy for for wanting to sell my current townhome and buy a house now?  (Read 1673 times)

DK82

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Bought a townhome late 2020 -- 2.85% interest rate. 

Long and short of it, I really dislike living in a townhome community and the HOA fee is likely about to jump from $400 to $450-500... $400 by all accounts is already very high based on the amenities and I'm concerned with the impact on being able to sell once it goes even higher. 

I never planned on staying here for the long-term when I bought, but didn't anticipate selling this quickly.  With the current interest rates around 7%, how crazy am I for considering this? 

Based on recent sales in the community, I'm confident I will break even after realtor fees etc if I were to sell now.  Of course would prefer to profit a bit, but I'm okay with breaking even. 

I guess I'm just looking for some other perspectives than my own on this situation.  Thanks in advance for any thoughts, kind strangers :)

Metalcat

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I mean, it's a fucking terrible financial move.

However, only you can decide if it's a lifestyle move worth making. As for the HOA, what is included in those fees? What makes you feel they're a bad value? Is this a fixable thing that joining the board could easily solve if you are truly not getting value for your dollar?

I ran my condo board for awhile and I personally think I get enormous value for my $500/mo.

What is it about the community that you think would be different with a detached home? I personally own a detached home, a high-rise apartment condo, a duplex, and used to live in a row house, and the living experience has never been meaningfully all that different.

There are TONS of rules in my highrise condo, but I personally like that because there's a lot less conflict. My detached home is in a tight knit community, so there are a ton of rules there, they're just unwritten and enforced without democracy.

So define *exactly* what lifestyle impacts you take issue with, look at your alternatives, price them out, and then determine if the enormous premium you would have to pay for those trade offs is worth it. With the interest rate, closing costs, etc...it better be a substantial upgrade.

This is an entirely personal decision.

TreeLeaf

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It is financially stupid.

But I have done a LOT of financially stupid things and otherwise stupid and risky things in my life that were pretty enjoyable at the time.

Only you can decide if it is worth the price or not.

achvfi

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I don't think you are crazy to do what you are planning. If you really hate your current home, yes you should find a place you like more.

As many wisely say, you date the rate and marry the house. You can always refinance in 2-3 years as the rates are forecasted to go down. So if you can finance the temporary high rate, go for it. We don't know many details but together with removing monthly HOA, it may work out ok for you.

You should provide clear numbers for people to chime in with better analysis.


yachi

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You should expect HOA fees and taxes to track inflation because they are both used to pay for things that are subject to inflation - repaving roads, repairing sidewalks, clearing snow and mowing stormwater retention ponds.  So if your HOA fee was $400 in, say, November 2020, than an increase to $460 in January 2023 would be necessary to cover the same things.  If an HOA isn't increasing fees to account for inflation, they may find themselves short in cash when a necessary repair is required.  If that's the approximate level of your HOA fee increase, I can't see why that would make it harder to sell it than when you bought it.

I agree with Metalcat that you need to list the exact lifestyle issues because 2.5 years ago you made a decision you seem to be unhappy about.  You don't want to make a decision now that you'll regret in another 2.5 years. 

There are lots of ways to calculate breaking even, but I don't see any of them putting you in the same financial situation as if you had purchased the house you're now considering 2.5 years ago instead of the townhouse.  Are you at least getting a 15% return on your downpayment to keep you in the same situation as if your money had been in the S&P 500?  Coincidentally, the 15% return is about what it takes to adjust for inflation between November 2020 and January 2023.

iluvzbeach

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You do realize that with todayís interest rates your payment difference on a comparable SFH would be far more than the HOA increase, right? Not to mention that the HOA dues are, in part, covering future expenses much like a sinking fund would for your SFH. Unless you just hate the rules, the community at large, etc., I donít see how this can make solid financial sense at this time.

Cassie

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I am on a hoa condo board and fees need to go up because the cost of all the services, repairs, etc are rising. June 1 mine will be going up to 400/month but thatís my heat, AC, water, landscaping, snow removal, repairs, etc.

englishteacheralex

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You have given no information as to why you dislike the townhome other than the HOA fee going up. HOA fees go up relentlessly. That is the deal with HOA fees. As someone else said, HOA fees track inflation.

I owned a highrise condo as my primary residence for six years, sold it and bought a townhouse about a year ago. The HOA fees here in Hawaii are astronomical, but I'm used to it and believe I get good value of the money. My friends all live in SFHs and I think I actually probably come out ahead of them when you factor in all the maintenance they have to pay for their homes. Also, they have to arrange for all the labor.

I can think of several reasons to dislike condo/townhouse life, but you haven't provided enough information to weigh in on those reasons. The maintenance costs for a SFH would be rising with inflation, as well. From the information provided, it seems completely irrational, expensive, and unnecessary to move.

Metalcat

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You have given no information as to why you dislike the townhome other than the HOA fee going up. HOA fees go up relentlessly. That is the deal with HOA fees. As someone else said, HOA fees track inflation.

I owned a highrise condo as my primary residence for six years, sold it and bought a townhouse about a year ago. The HOA fees here in Hawaii are astronomical, but I'm used to it and believe I get good value of the money. My friends all live in SFHs and I think I actually probably come out ahead of them when you factor in all the maintenance they have to pay for their homes. Also, they have to arrange for all the labor.

I can think of several reasons to dislike condo/townhouse life, but you haven't provided enough information to weigh in on those reasons. The maintenance costs for a SFH would be rising with inflation, as well. From the information provided, it seems completely irrational, expensive, and unnecessary to move.

I've lived in a few condos and there's no question that I come out ahead compared to SFH ownership. It's never even been close because I've lived in larger complexes or buildings, and the buying power of that many units is insane compared to being a single unit purchaser.

I was running this building during some MASSIVE repair projects at the same time as I was contracting work for my investment duplex. The different in cost for services was mind blowing.

DK82

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I appreciate everyone's replies. 

Ultimately my biggest driver here is my kids -- they're relatively young, love playing outside and love playing any and all sports.  I literally have no backyard (just a small deck and small patio) and a next to non-existent front yard.  I cannot put up a basketball hoop for them because of the HOA rules.  We have to drive somewhere just to throw a baseball around.  I also genuinely miss having a yard to landscape and take care of. 

My HOA fee covers only snow removal and landscaping, along with exterior building maintenance (roofs, painting, etc).  Trash, water, etc is all on the owners. 

iluvzbeach

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Okay, so this isnít really about the HOA fees but rather needing outdoor space for your kids to play, right? Thatís a totally different scenario and I guess the decision is really based on how much this is an issue. Do your kids really want to get outside today, and you find yourself going to another outdoor space just to get them the room to play & get exercise? Depending on whether it truly seems your kids will use the outdoor space (vs. being inside on screens), you donít mind the additional work & expense caring for a SFH home requires, you are fine with, and can afford, 2-3x the interest rate you pay today, you may find it to be a worthwhile move.

Metalcat

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Just curious, why did you buy a home with no outdoor space in the first place?

Omy

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A few things to consider:

Were these things not the case when you moved in 2.3 years ago? Were you unable to purchase a SFH in late 2020, but now can (even with the huge increase in prices and interest rates)? Does that HOA fee cover a community swimming pool and community center for the kids?

The HOA for my SFH (which covers no maintenance) just jumped to $110/mo... and may have to go up significantly because of storm water management issues in the community that have come up in the last year. It will cost $20k to replace my roof. My utilities are double (sometimes triple) what my rental townhouse is. Landscaping/removing trees/pest management/exterior maintenance/insurance/trash and snow removal are all large expenses and going up every year. And if I lived in a SFH neighborhood without an HOA, I'd be responsible for my own well and keeping my water safe and would have a septic system to maintain and replace at great expense.

There's rarely a perfect home that lasts for all seasons of your life. What were the reasons that drove you to buy your current home? If those no longer exist and it won't be a huge stretch to change homes, then go for it.

But remember it's going to cost lots of closing costs and moving expenses to make this jump. Is it worth it...or will you find things you don't love about your next house after living there for a couple years? Will you have a longer commute (less time with children, more daycare costs)? Will you have to compromise on school system or pay a huge premium to have the perfect house?

Think about what caused you to buy a house that no longer meets your needs after 2 years...and how you will avoid making a similar mistake in the future.

Also consider what it would take to make this house more workable. Put a hoop up somewhere inside the house and play nerf basketball and nerf soccer. Make it an adventure to try out different parks or experiences. You likely have a lot more discretionary funds with this mortgage payment...use some of it to put the kids in club teams or take them to rock climbing or trampoline or gymnastic centers.

And consider renting until you're sure you know what you want.
« Last Edit: March 12, 2023, 09:48:32 AM by Omy »

Dicey

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Kids toss basketballs [noisily] for a few years, then move on to other things. Have you done the math on exactly what it will cost you per free throw?

You wouldn't bat an eyelash at walking/biking/driving to a soccer field, how is BB so different? Playing at a park is vastly better than in one's backyard.

While it be easier to throw a volley of facepunches, I'll take the time to share some real life HOA experiences instead, but know you're skating on thin ice...

No One should buy into an HOA unless they're willing to serve on the Board
. It's the best return on your time and investment ever. EVER.

Buckle up, I'm going to share my real-life experiences. It will take me longer to write than it would take you to attend several board meetings, but people buy into HOA controlled properties without a clue all the time, so I'm considering thus a PSA and time well spent.

HOA #1 Needed new roofs and the proposal was to do all six at once. There was going to be a Special Assessment equal to 1-2 mortgage payments, gulp. My mortgage was already a huge stretch (HCOLA), and I couldn't stomach a SA. "What if we don't do them all at once?" I asked. I wasn't even on the HOA Board yet, I was just attending meetings until the next election. They agreed to consult the roofer and he agreed that the job could be done two per year, so that's how it went. The whole project was cash flowed, avoiding the need for a SA. Moreover, the next two years were done more efficiently and the job came in under the original estimate. No significant dues increases were needed either. Needless to say, getting elected was a breeze and I served until I sold it for a huge profit.

HOA #2 My timing was better and I got on this HOA Board sooner. Dues were creeping up, so we decided to really tear apart our budget and see where every penny was going. We were able to make a number of adjustments, both near and long term. As a result, our dues went DOWN for two years and stayed flat for one more.* I sold that place ten years ago, also for a nice profit. I keep an eye on it, as I still visit a friend there weekly. It continues to look great. Best of all, the dues are lower than comparable properties, making the homes sell for more. I'd buy there again in a heartbeat.

HOA #3-5 We hate this motherfucking board with a passion. We can't be on the Board because we don't live in any of them. The HOA are the nit-pickiest assholes in the world! We've been forced to replace a function A/C unit because it was "noisy"...

We've been cited multiple times for:
1. Total strangers parking in the street in front of the house overnight.
2. Weeds too many times to count. We have a gardener and we visit often. Not once has a fine been enforced, because we stay up on the landscaping, but violations tend to occur after every visit. We take pictures now before we leave.
3. Multiple warnings for "sand in the landscaping rocks". WTF, it's the fucking Desert, we have no control over blowing fucking sand! So we pay periodically to have excess sand "removed". We spent $1600 doing this a few months ago and two weeks later there was a huge sandstorm. (This house gets fantastic sunsets, because it's more exposed, hence the sand. It's less of a problem at the other two.)

Here's the most ridiculous one: one property has a lovely tree that creates great shade. The birds love it, too. So much so, there's poop on the sidewalk in front of the house. The HOA wanted us to trim the tree back between the annual pruning cycle the tree actually requires, or "consider removing and replacing it". Fuck that, it's a beautiful, healthy tree! We'd noticed there's also bird poop beneath every STOP sign and lamp post. We took a bunch of pictures and asked them to "consider removing every STOP sign and lamp post." They backed off that one in a.

The tree and the A/C complaints were triggered by the same neighbor's wife. He's a retired attorney, so he got on the Board when his nagging wife complained that "nothing was being done". We did end up replacing the A/C, but we made them clarify their decibel limit rules, which forced them to re-draft a bunch of documents, which added over a year to the process. By then, the A/C unit, which was original equipment installed by the builder, was reasonably close to its normal life expectancy. Plus, we got a great deal on the new unit and now that guy takes wonderful care of all three systems for much less than the other company we were using.

We did replace the A/C, but all other "violations" have been "resolved" without fines, but they are a PITA.  Best of all, this HOA is so fucking smug, they call themselves the "LEC", Lifestyle Enhancement Committee.

Why keep HOA 3-5? Because in the words of a long-time, beloved tenant, "This place is like Disneyland for adults" and the dues are far below average for the region, which bolsters property values. They rent very easily. (One tenant's entire rent is less than the dues he was paying elsewhere nearby.) Each property has appreciated nicely and we enjoy the rental income.

HOA #6 We recently bought a condo for our adult son, who is not neurotypical. We anticipate that he will live there for a very long time. We put the property in all of our names so that we can serve on the HOA board. DH, who has mad construction experience, has just been elected. Their reserves are skimpy and the buildings are old, so his skills will help get maintenence done as needed for reasonable cost. This will fatten up the reserves and keep dues increases to a minimum, protecting our investment.

Note: the complex behind this one, of similar age and style, is planning a major overhaul of the exteriors. It's going to cost $40k per unit. To make it "affordable" they are levying each homeowner $10,000 annually for four years, before the work begins. OMFG!

This PSA has been brought to you by the letter "D". I hope you and others find it useful.

*Remarkably, when we lowered the dues, we actually got complaints. You can't please all the people...

catccc

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No One should buy into an HOA unless they're willing to serve on the Board
. It's the best return on your time and investment ever. EVER.

Many people live in HOA communities and very few of them are willing to serve on the board.  Are you saying those all those that were unwilling should ever have bought their HOA homes?!  Seems like too much of an absolute here.  Life is nuanced. 

@DK82 , IDK if this statement makes sense for you.  For someone with young kids, I would say the best return on your time and investment is to make is family life match your intentions and values.  If that means instant access to outside spaces for family time, and if that means moving, and you are okay with breaking even, I say go for it.  Moving to a place that better suits the life you want for your family is reasonable.  I understand the inconvenience of driving anywhere with kids.  IDK how old your kids are, but mine are 11 & 14 and somehow getting everyone in the car to go someplace these days takes longer than it did when they were 3 and 6.  (I will not scoop up my 14 year old and put her in the car when I decide it is time.)

You bought the wrong house for your family.  It was a mistake and it will cost you, but there's nothing wrong with making the change with eyes wide open.

FWIW, when we had our first kid in 2008, SO was making $27K and I was making $80K.  I quit my job to be a SAHM for a year.  It cost my family $80K to do this and I have no regrets. Family time is invaluable.

Another thought.  Have you thought about what rent would be for your TH?  I know a lot of people here swear by landlording as a FIRE technique.  (I've stuck with VTSAX, but perhaps I'm just not brave enough to take the risk or real estate investing.)  Something to consider!

jeromedawg

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I appreciate everyone's replies. 

Ultimately my biggest driver here is my kids -- they're relatively young, love playing outside and love playing any and all sports.  I literally have no backyard (just a small deck and small patio) and a next to non-existent front yard.  I cannot put up a basketball hoop for them because of the HOA rules.  We have to drive somewhere just to throw a baseball around.  I also genuinely miss having a yard to landscape and take care of. 

My HOA fee covers only snow removal and landscaping, along with exterior building maintenance (roofs, painting, etc).  Trash, water, etc is all on the owners.

Doesn't hurt to look I guess... but as others have mentioned: definitely think hard about the cost-benefit of 'upsizing' and if those reasons you mention *really* do justify it. In my case, we used to live in a downstairs condo unit in a city 20-30 minutes north of where we are now. Nice town, nice initial community with no complaints about the HOA (at least, starting out), decent neighbors (starting out), and amenities within walking distance. I had lived there for a few years prior to getting married and it was a good bachelor pad. Got married and had two kids while still there. As time went on, things went downhill as far as people power-tripping on the HOA and the 'quality' of neighbors that we had (in terms of neighbors acting entitled in various ways). We didn't have much space in the yard but it was enough for the kids to scoot around. And they were able to play in the street as well, apart from several cars who would blaze through. The real irritation came from multiple tenants/neighbors who moved into the upstairs unit + poor construction. Most of the neighbors living up there were inconsiderate about foot traffic and activities, especially the ones who had kids in our latter years of living there - one neighbor's kid was in the room directly above ours (yes, they gave her the master bedroom) and on several occasions, she would get up onto her bed and jump off it over and over and over again... between 6-7am on a weekend. We had to talk to them multiple times but ultimately they didn't care. We were relieved once they moved out, only to learn that a new family with ANOTHER young toddler was moving in... *facepalm* - I mean, I got it: our kids were probably around the same age as theirs. The difference is that we kept our kids in check and didn't (and still don't) even let them run around crazy like that in our own place (I'd prefer not to have my son or daughter wail in pain after spraining their ankle jumping off their bed or hurting themselves some other way). The last couple that was there when we were there had other issues though: the husband had a really short fuse and, often, he would cuss so loudly that you could hear nearly every word through the walls. The best was when he would go out onto their balcony (directly over our patio... and, mind you, all single pane windows throughout both units) and scream "FUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUU*******KKKKKKKKKKKKKKKKKKKKKKKKKKK!" at the top of his longs, which you could hear echo down the street... I don't know what he was frustrated with but that's definitely an interesting way to let your anger out while letting the entire neighborhood know. So, apart from being on a bottom unit and constantly hearing the *BOOM BOOM BOOM BOOM BOOM* of footsteps above, those were probably some of the bigger concerns that we had... there was also ongoing drama and conflict between several HOA members and a guy who was on the HOA but got kicked off.
 
Fortunately, coinciding with all of this we decided we wanted to get our kids enrolled in a Mandarin immersion program in the area we are currently in. Naturally, I had thoughts of just moving down this way since we ended up hating where we were living. So while the main driver for our move was the kids' education, gaining our sanity back was a close-second. Although, we decided to rent a tiny apartment for a year before getting a place (which may have been a mistake since this was right through COVID, when prices skyrocketed like crazy) and were subject to idiots with loud cars who would rev and idle their loud cars (which just happened to be close to our apartment) for 10-15 minutes every morning at 5-6am. Oh, and I can't forget to mention our nextdoor neighbor who had midnight/early-AM gaming sessions where he too, would cuss at the top of his lungs out of frustration or excitement. So gaining our sanity back, fully, was still on hold for a bit lol - I'd say being in the apartment was a better situation though and the biggest bonus was that it was a less than a minute away drive from the school our kids are in (this was also the "golden ticket" to get them into the school as well - move within the neighborhood boundary of the school and you're guaranteed in, even if you move elsewhere and outside the boundary in the future).
Anyway, we ended up finding a SFH (not perfect by any means, but definitely quiet) a little further away from the school (like a 15min drive) about a year after renting the apartment and have been here since. We did have a bit of a headache after moving in here with multiple maintenance and repair issues, but we are happy because I still wouldn't trade any of it to go back to that condo (plus, that city/area has gotten progressively busier traffic-wise... I just don't like going back there unless it's for food, and even then, I'd rather drive further since food prices there are even more inflated these days - it's like a crowded playground for young rich hipsters now...). Oh and I forgot to mention: there's no HOA here :D

So, long story short: definitely think hard about WHY you want to move and if it's really justified. Then consider what you're looking for when it comes to an SFH: old construction vs new construction in particular and make doubly sure you don't end up buying something that you're going to regret. It's easy to make decisions in haste when you're desperate, only to slowly regret them in the long-run. For your kids - are there any playgrounds or parks nearby within walking distance? Or do you really have to drive? Or, can you perhaps consider enrolling the kids in a program where they can learn to play basketball, etc? Having *more* yard space isn't always a good thing. You may like the idea of mowing and manicuring your yard/lawn every weekend as a hobby, but in reality I don't think it always works out this way.
« Last Edit: March 13, 2023, 10:50:10 AM by jeromedawg »

englishteacheralex

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We don't serve on the board of our HOA but we do go to the monthly meetings. It does seem important to keep up with the decisions and get to know our involved neighbors, who are generally really nice, community-minded people.

OP, we lived in a highrise for six years while our kids were babies/toddlers. It wasn't very fun. We had to schlep if we wanted to play with the kids outside. There wasn't much space inside to play, either. The building did have a pool, so that was nice and helped make it tolerable.

For us, we just couldn't afford anything better than the highrise, so we put up with it while we saved our money. When we finally could upgrade, we bought a townhouse, but our townhouse has a ton of open space, a forest, and a pool, and our kids can go outside and play in the neighborhood without us.  We don't have a basketball hoop but our neighbor has a portable one that they drag out of the carport sometimes and then all the neighborhood kids play HORSE together. I've been wondering for a while if we could lobby the board to install a real hoop in some of the abundant guest parking spaces that the neighborhood kids now use for whiffle ball.

I guess what all this has to do with you is that it's ok to upgrade to something that suits your needs better. We love our townhouse but that's because it's awesome for our family. Not perfect, but very good. Financially it would have been better for us to stay in the highrise and bank the extra money, but life is short.

jeromedawg

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No One should buy into an HOA unless they're willing to serve on the Board
. It's the best return on your time and investment ever. EVER.

Many people live in HOA communities and very few of them are willing to serve on the board.  Are you saying those all those that were unwilling should ever have bought their HOA homes?!  Seems like too much of an absolute here.  Life is nuanced. 

@DK82 , IDK if this statement makes sense for you.  For someone with young kids, I would say the best return on your time and investment is to make is family life match your intentions and values.  If that means instant access to outside spaces for family time, and if that means moving, and you are okay with breaking even, I say go for it.  Moving to a place that better suits the life you want for your family is reasonable.  I understand the inconvenience of driving anywhere with kids.  IDK how old your kids are, but mine are 11 & 14 and somehow getting everyone in the car to go someplace these days takes longer than it did when they were 3 and 6.  (I will not scoop up my 14 year old and put her in the car when I decide it is time.)

You bought the wrong house for your family.  It was a mistake and it will cost you, but there's nothing wrong with making the change with eyes wide open.

FWIW, when we had our first kid in 2008, SO was making $27K and I was making $80K.  I quit my job to be a SAHM for a year.  It cost my family $80K to do this and I have no regrets. Family time is invaluable.

Another thought.  Have you thought about what rent would be for your TH?  I know a lot of people here swear by landlording as a FIRE technique.  (I've stuck with VTSAX, but perhaps I'm just not brave enough to take the risk or real estate investing.)  Something to consider!

I see the point that dicey was trying to make with being willing to serve on the board but, realistically, it doesn't always work out that way. In my case, the HOA felt "locked" in with the same expired board members just because the rest of the neighbors didn't care and/or didn't want to deal with voting new people in... it takes an army sometimes. You really have to know all the neighbors and get along with all of them well for something like this to work out but either many neighbors didn't care or all the neighbors who did had some agenda to keep the existing board members. I'm pretty sure there was some level of corruption in this way with the prior board, and the guy who got kicked off likely was legitimately trying to call things out that weren't right (I'm pretty sure they're still embroiled in that situation to this day). I don't know how other HOA boards are run but with ours it seemed like the same 3-4 people had served on it since the time the community was built in 1989. And definitely at least one or more of them were power-tripping and I'm pretty sure abusing their powers.
« Last Edit: March 13, 2023, 11:00:01 AM by jeromedawg »

catccc

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I see the point that dicey was trying to make with being willing to serve on the board but, realistically, it doesn't always work out that way. In my case, the HOA felt "locked" in with the same expired board members just because the rest of the neighbors didn't care and/or didn't want to deal with voting new people in.

Exactly.  Even if you want in on the HOA board, that doesn't mean you can get there.  I was mostly coming from the viewpoint of raising young kids since that is OP's situation, with which I'm familiar.  Dicey may not be able to appreciate that.

jeromedawg

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I see the point that dicey was trying to make with being willing to serve on the board but, realistically, it doesn't always work out that way. In my case, the HOA felt "locked" in with the same expired board members just because the rest of the neighbors didn't care and/or didn't want to deal with voting new people in.

Exactly.  Even if you want in on the HOA board, that doesn't mean you can get there.  I was mostly coming from the viewpoint of raising young kids since that is OP's situation, with which I'm familiar.  Dicey may not be able to appreciate that.

I remember getting the pamphlets to vote and it would always be the same people who won even if you voted for someone else. There were usually 1 or 2 new people who would run but I don't ever recall many new people serving on the board during my decade of living there. If anything, the same expired board members just rotated between the various positions. One guy on the board was power-tripping over parking spaces, and getting people towed out of them - it did happen to me once (after having our second baby and just being exhausted and forgetting that I parked in one of *his* spots for more than 7 days or whatever) but I saw that tow-truck come through the neighborhood multiple times. I can't help but think he made half the calls too. When you're on the board, you definitely have those kinds of "privileges"

economista

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OP, I was in a very similar situation. My husband and I bought into a new-construction townhome community in 2018. After construction on our unit was delayed for 10 months, we finally closed in Dec 2018. Then in Jan 2019 we got pregnant. Baby was born in Oct 2019. I absolutely loved our townhouse. I loved the layout and we chose all of the finishes and I wanted to live it in forever. In May 2020 I found out I was pregnant again. Baby #2 was born in Jan 2021. At that point we had a toddler running all over the place who wanted to spend 99% of her time outside and we had absolutely no yard or green space. We were also surrounded by DINK couples in their 30s/40s who never planned to have kids and who would party outside the units every night. Seriously, they would set up in the alley-ways between the units and drink and play games and be loud until 11/12 almost every single night. I lost count of how many times they woke up the babies, even with their sound machines on.

I was on the HOA board and would complain at every single meeting and nothing was done about it. By July 2021 I had enough and we put our house up for sale. Iím still sad that the lack of green space and the bad neighbors made us sell that house. I probably could have gritted through it for a few years until the girls were older and it wasnít as much of an issue, but at that point in time (with honestly some ppd going on) it was too much for me to take and I just had to get out. We would have been happy to break even but thankfully the crazy housing market worked in our favor. We sold our townhouse for $115k more than we paid for it, and we were able to buy a SFH a few blocks away with a huge lot for only $50k more. Due to the drop in interest rates at that time and losing the HOA payment, our new house payment is only $50 more per month than the old one, but we have 1000 sq ft more and a huge yard and a very quiet neighborhood. Everything worked out ok. We walk past the old house quite often and I still miss the luxury/beautiful finishes inside. Our new house was built in 1961 and isnít beautiful at all, but it is quiet and has the space we need.

jeromedawg

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OP, I was in a very similar situation. My husband and I bought into a new-construction townhome community in 2018. After construction on our unit was delayed for 10 months, we finally closed in Dec 2018. Then in Jan 2019 we got pregnant. Baby was born in Oct 2019. I absolutely loved our townhouse. I loved the layout and we chose all of the finishes and I wanted to live it in forever. In May 2020 I found out I was pregnant again. Baby #2 was born in Jan 2021. At that point we had a toddler running all over the place who wanted to spend 99% of her time outside and we had absolutely no yard or green space. We were also surrounded by DINK couples in their 30s/40s who never planned to have kids and who would party outside the units every night. Seriously, they would set up in the alley-ways between the units and drink and play games and be loud until 11/12 almost every single night. I lost count of how many times they woke up the babies, even with their sound machines on.

I was on the HOA board and would complain at every single meeting and nothing was done about it. By July 2021 I had enough and we put our house up for sale. Iím still sad that the lack of green space and the bad neighbors made us sell that house. I probably could have gritted through it for a few years until the girls were older and it wasnít as much of an issue, but at that point in time (with honestly some ppd going on) it was too much for me to take and I just had to get out. We would have been happy to break even but thankfully the crazy housing market worked in our favor. We sold our townhouse for $115k more than we paid for it, and we were able to buy a SFH a few blocks away with a huge lot for only $50k more. Due to the drop in interest rates at that time and losing the HOA payment, our new house payment is only $50 more per month than the old one, but we have 1000 sq ft more and a huge yard and a very quiet neighborhood. Everything worked out ok. We walk past the old house quite often and I still miss the luxury/beautiful finishes inside. Our new house was built in 1961 and isnít beautiful at all, but it is quiet and has the space we need.

The great thing is that you can always remodel! Part of me wonders what we would have been able to sell our place for if we had just held on and listed it maybe half a year after. The time we sold I think it was right at the start of when the bidding wars were intensifying but not quite at the peak. Of course, it was stressful enough finding a new house, so I think it would have just added to the stress levels. The way we did it was sort of a "step-by-step" approach.
« Last Edit: March 17, 2023, 01:48:10 PM by jeromedawg »

bryan995

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Find a way to keep it / turn it into a rental AND work towards buying a new SFH. 

Don't you dare give up that beautiful rate willingly !

Metalcat

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Find a way to keep it / turn it into a rental AND work towards buying a new SFH. 

Don't you dare give up that beautiful rate willingly !

I guess mortgages aren't portable there?

bryan995

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Not sure where the OP is, but no, we cannot do that in the USofA AFAIK.

But I'd gladly accept that in exchange for the sub 3% 30yr fixed mortgage vehicle!


Metalcat

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Not sure where the OP is, but no, we cannot do that in the USofA AFAIK.

But I'd gladly accept that in exchange for the sub 3% 30yr fixed mortgage vehicle!

Why? Seems like a huge trade off.

yachi

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Not sure where the OP is, but no, we cannot do that in the USofA AFAIK.

But I'd gladly accept that in exchange for the sub 3% 30yr fixed mortgage vehicle!

Why? Seems like a huge trade off.

Two main reasons:

1.  It's a fixed rate for the life of the loan.  That is, the lender is committed to the rate for the entire 30 year period, it doesn't change every 5 years or so like a Canadian mortgage.
2.  Costs to refinance the mortgage are reasonable if rates drop.  I think this would be called "breaking" a mortgage in Canada.  The costs are such that it is typically worth doing if one can get a 1/4 or 1/2% reduction in interest rate.

Because of #2, people like OP who are moving can reasonably afford to pay off the mortgage on the old house using the funds borrowed for the new house.  But the action effectively resets the mortgage to current market interest rates, regardless of what the rate was.  And that is not something that would have happened for another 28 years for OP.  I believe that in Canada, this interest reset happens to a homeowner on a schedule every 5 to 10 years regardless of whether they move or not.

bryan995

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Not sure where the OP is, but no, we cannot do that in the USofA AFAIK.

But I'd gladly accept that in exchange for the sub 3% 30yr fixed mortgage vehicle!

Why? Seems like a huge trade off.

Two main reasons:

1.  It's a fixed rate for the life of the loan.  That is, the lender is committed to the rate for the entire 30 year period, it doesn't change every 5 years or so like a Canadian mortgage.
2.  Costs to refinance the mortgage are reasonable if rates drop.  I think this would be called "breaking" a mortgage in Canada.  The costs are such that it is typically worth doing if one can get a 1/4 or 1/2% reduction in interest rate.

Because of #2, people like OP who are moving can reasonably afford to pay off the mortgage on the old house using the funds borrowed for the new house.  But the action effectively resets the mortgage to current market interest rates, regardless of what the rate was.  And that is not something that would have happened for another 28 years for OP.  I believe that in Canada, this interest reset happens to a homeowner on a schedule every 5 to 10 years regardless of whether they move or not.

Costs are truly fixed with a US 30yr fixed rate mortgage.  Even more-so fixed in CA with prop13 limiting real estate tax price increases to 1% yoy.  My 2.75% 30yr, $4000/mo mortgage is going to be at most ~$4300/mo 30 years from now.  That's going to basically be the price of a gallon of milk at our pace of inflation :).   And yes, one can always refinance to a lower rate and restart the clock (if you happen to buy during a high-rate time period).

I'd be freaking out if my Canadian 5-year term was coming up for renewal.  From <3% to >7% in one swoop?  eek !


« Last Edit: March 20, 2023, 06:28:16 PM by bryan995 »

Metalcat

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Not sure where the OP is, but no, we cannot do that in the USofA AFAIK.

But I'd gladly accept that in exchange for the sub 3% 30yr fixed mortgage vehicle!

Why? Seems like a huge trade off.

Two main reasons:

1.  It's a fixed rate for the life of the loan.  That is, the lender is committed to the rate for the entire 30 year period, it doesn't change every 5 years or so like a Canadian mortgage.
2.  Costs to refinance the mortgage are reasonable if rates drop.  I think this would be called "breaking" a mortgage in Canada.  The costs are such that it is typically worth doing if one can get a 1/4 or 1/2% reduction in interest rate.

Because of #2, people like OP who are moving can reasonably afford to pay off the mortgage on the old house using the funds borrowed for the new house.  But the action effectively resets the mortgage to current market interest rates, regardless of what the rate was.  And that is not something that would have happened for another 28 years for OP.  I believe that in Canada, this interest reset happens to a homeowner on a schedule every 5 to 10 years regardless of whether they move or not.

Costs are truly fixed with a US 30yr fixed rate mortgage.  Even more-so fixed in CA with prop13 limiting real estate tax price increases to 1% yoy.  My 2.75% 30yr, $4000/mo mortgage is going to be at most ~$4300/mo 30 years from now.  That's going to basically be the price of a gallon of milk at our pace of inflation :).   And yes, one can always refinance to a lower rate and restart the clock (if you happen to buy during a high-rate time period).

I'd be freaking out if my Canadian 5-year term was coming up for renewal.  From <3% to >7% in one swoop?  eek !

Exactly, so why would someone want to trade US 30 year mortgages for Canadian style mortgages just for the portability. Seems like giving up a MASSIVE advantage for a very minor advantage.

Dicey

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^Yup.^