Advise from Realtors and anyone else

[Hugh R]

My 27 y/o son and his GF are looking at this condo.

28449 Casselman Ln # 434, Santa Clarita, CA 91350 | MLS #316002182 | Zillow

$317K, been on the market for 45 days, recently reduced by $12K. Buyer got it for $200,000 6 years ago, so they will make 50% coin on the purchase price, don't know what they put down. Sold in 05 for $286K then bought again, I'm assuming on a short sale or something for $200K. Appears to have originally sold for $292 in 2007.

Comps seem to be $325K.

Thoughts...

[john70t]

Originally Posted by Hugh R

$317K, been on the market for 45 days, recently reduced by $12K. .

-A month and a half on the market.
-Cali RE fish aren't swarming/biting vigorously.
-Reduced slightly. Only slightly.
-Seller is confident, or bold, or totally oblivious to market conditions.

I don't know the local condo market.
I can offer no additional opinion on that particular investment.
It is well above my economic level.

Other than the above, that is a lot of money to sink into a single condo unit at short notice.
YMMV.

[Hugh R]

John. looking for strategy, not pricing. Rents here are higher than mortgages if you have down money.

[varmint]

mid 90s i rented a cabin up on bouquet canyon in the national forest. the most beautiful part of LA county. real trees and a small stream running through the yard. always ten degrees cooler than everywhere else.

i know it does not directly answer your question. but it's a neighborhood in the area you might have overlooked.

[john70t]

Dad, don't ask the internet.
Research.
(Did I mention research and comps and market trends already?)

Kid should be presenting you with a grand viable proposal.
Give him a tiny kick for more.
When in question don't bite.

California RE market is hot and cold.
I don't know.
Sorry.

[Hugh R]

Looking at a few others in the same condo complex. I bought my first house in the dark side of LA for $50K -35 years ago, very dark, lots of drugs, moved to Sylmar for $95K for an 1,000 sq.ft. house, sold it for $120K, move to Valencia for a $195K house ( my brother said "are you high on drugs", he bought at $215K house in a lesser neighborhood a year later). Bought my current house 20 years ago for $330K its worth around $750K. It had been abandoned for two years and I put a lot into it.

[look 171]

You know me, I see home pricing going only up and not down anytime soon. I am concern about the election, but I am going to buy regardless this year (hope I find something). Even if housing drops, as long as your kid has a steady job and pays the monthly payment, he will need to ride out the storm. It will go back up and then some. Happens each and every time. For LA's hosing price to tank, LA would have to be under water. If that happens, that would be great new for you kid if he bought the condo. Can you say beach front

That area of Saugus is your typical middle class America. Good schools, and someone will want to rent from him should he decide to leave for another home. If not, it should be sell relatively easy only if priced correctly and cleaned up.

This is the exactly buyer they are looking for. Price drop and people are watching and want to write offers the first sing of a price drop. Its fine, but if I were to buy this, I would come in below asking (unheard of in today's market near LA) with inspection contingency removed to show them I am really interested. Better if you can remove loan part also. Its a gamble, but a calculated risk. The condo is 10 years old, so what can really go wrong in a 10 year old home? Check for leaks under the sink and make sure the cabinet bottom isn't wet or rotted. Look for traces of leaks. The water heater should be coming up for replacement in a few more years. check for creative electrical work. One tell tale sign is crappy wall patching jobs . This kind of stuff normally happens to single family homes, and not condos so much. Water lines are PEX (I am pretty sure of it?) but should hold up for years. There isn't a way to check that unless walls are opened up. Something happens to the outside, the condo association should take care of that. The comps look to be around 300-340k.

One more thing to add and its only my observation. You know that general area more then many of us here. In 10 years, that area may have double in population. This includes the whole Santa Clarita valley. When they build up an area with mass housing, we all say, 'Who's going to live there? Over price and it will never sell" I caught myself saying that same thing. Just look at them now? They are all sold and gone up. My friend and I looked at Stevenson Ranch when it was brand new 20 years ago. he moved from a condo in SilverLake and was worried about the housing would tank due to over building. Kids are in HS and his place is now tripled. The growth out there has gone up three folds in the past 20 -25 years. The traffic in that fwy will tell you something.

[cabmandone]

Originally Posted by Hugh R

My 27 y/o son and his GF are looking at this condo.

28449 Casselman Ln # 434, Santa Clarita, CA 91350 | MLS #316002182 | Zillow

$317K, been on the market for 45 days, recently reduced by $12K. Buyer got it for $200,000 6 years ago, so they will make 50% coin on the purchase price, don't know what they put down. Sold in 05 for $286K then bought again, I'm assuming on a short sale or something for $200K. Appears to have originally sold for $292 in 2007.

Comps seem to be $325K.

Thoughts...

My thought is don't let what they bought it for affect your thought process because it really has no bearing on where the market value is today. You touched on comps being 325 and they're asking 317. Seems like it's priced fairly to me. I'm no longer in real estate but in what I do now I tell people its easy to miss a good deal looking for a great deal that never comes.

[dad911]

Originally Posted by cabmando

My thought is don't let what they bought it for affect your thought process because it really has no bearing on where the market value is today. You touched on comps being 325 and they're asking 317. Seems like it's priced fairly to me. I'm no longer in real estate but in what I do now I tell people its easy to miss a good deal looking for a great deal that never comes.

Well said. If it is going to be their long term home, and no others have hit all their buttons, what's a few grand in 10 years? Offer 10k under ask, and start negotiations.....

[WPOZZZ]

Originally Posted by cabmando

My thought is don't let what they bought it for affect your thought process because it really has no bearing on where the market value is today.

Originally Posted by dad911

Well said. If it is going to be their long term home, and no others have hit all their buttons, what's a few grand in 10 years? Offer 10k under ask, and start negotiations.....

Exactly! An analogy that strikes home is this. Think about what you paid for your 911 a few years ago. What would you do if people used that to determine an offer for your car today.

Make that offer of $10k under. The worst they can say is no. They can also counter at say $315k, and go from there.

[DanielDudley]

Hugh, would you buy a condo if you could get a house ? Not much equity to be gained by owner sweat in a condo. I guess I'm asking what else might be available for similar costs.

Strategy wise, if your son or his wife makes friends with a good realtor, and demonstrates that they have the funding and are ready to close on the right house immediately, put the deposit down immediately, then a good house will probably turn up soon, and they will be right there.

How great is this condo compared to anything else out there ? Are they planning on staying there, or will a child change the equation ? If this is your son with the bright new future, lots of things seem to come about as a result. Don't buy expensive shoes for someone who may soon out grow them.

[recycled sixtie]

[QUOTE=DanielDudley;9092443]Hugh, would you buy a condo if you could get a house ? Not much equity to be gained by owner sweat in a condo. I guess I'm asking what else might be available for similar costs.

I am with Daniel on this. There is likely greater appreciation on a house than a condo.
Also think resale. Once bought condos can be tough to sell and could take a while to sell. It looks like a decent condo but seems like a lot of money for what it is.

We bought our condo(which we rent out) in 2008 and paid $1k over asking price. The recession hit immediately after and the value now is still 20% below what we paid for it. Fortunately we have had good rent.

The longer this condo stays on the market the more chance of a lower offer price being accepted. If your son and GF are in love with it then I would start at $15k below asking. Plus they may have to pay HOA/condo fees once bought?

[cabmandone]

BTW Hugh, being a former realtor the best tool I can suggest to your son is go to a bank and get pre approved, not pre qualified but pre approved. When negotiating make sure you have a letter of pre approval from the lender stating they are approved for a loan in the amount of the offer price. That's a BIG hammer to carry when negotiating because the seller will know without a doubt that they are ready, willing, and able to carry out the transaction once they sign and that it's not a matter of the contract being contingent on financing.

[dad911]

Originally Posted by DanielDudley

Hugh, would you buy a condo if you could get a house ? Not much equity to be gained by owner sweat in a condo. I guess I'm asking what else might be available for similar costs.

Looking back, and this is coming from a homebuilder, I think quality of life (for me) may have been better served in a condo/townhome when the kids were very young, and definitely now that they are out of the house. Would have spent more weekend time with the kids instead of working around the house. Also would have acquired less crap(tools and porsche parts) over the years. As to sweat equity, gained 40% on my 'vacation condo' mostly by updating interior, and am doing it again.

Originally Posted by DanielDudley

Strategy wise, if your son or his wife makes friends with a good realtor, and demonstrates that they have the funding and are ready to close on the right house immediately, put the deposit down immediately, then a good house will probably turn up soon, and they will be right there......

Agree, be ready with financing.

[Eric Coffey]

Originally Posted by Hugh R

Thoughts...

Personally, I have an aversion to "owning" anything with a shared wall as a primary residence. That goes double if it is multi-level, with units stacked on top of each other. The one you linked looks more like a "townhouse" layout, so it would be a lot better than your typical condo conversions IMO. Regardless, one bad "neighbor" can make life miserable. You would also be on the hook for condo dues which can be significant and even crushing if/when "special assessments" are levied. If you are considering it (or any other condo), just be sure to do your due diligence regarding the association/management. Check their history, reputation, and solvency.

That said, they can be good investment properties, especially when located in close proximity to tourist/vacation destinations, and/or places that are warm in the winter that attract the snow-birds. In those cases, you can typically do OK if you buy right, and then rent out as a vacation rental, and/or sell down the road as a "lock-and-leave" property to a snow-bird. Still very important to crunch the numbers, as vacancies and carrying costs (to include potential high condo dues) can take a huge bite out of your cash-flow. YMMV...

[flyenby]

HOA are usually quite small minded......

[RANDY P]

Check for pending assessments. Condos can be dangerous if there's repair work needed.

your money gone , POOF! Just, like that.

[Hugh R]

My Son and his GF went and bid on a different unit today, a little cheaper and much nicer common areas and a two car detached garage. Former rental unit which needs some paint and other elbow grease. Its a well established HOA that my MIL used to have a unit in and is well run.

[vash]

how does a couple that are dating buy together? TIC? or something?

congrats H for having a 27 year old son that is smart enough to buy property. when i was 27, my money would have gone to a new car or something..dumb.

[Hugh R]

A weekend trip to Las Vegas may be in the works.