Hot Bargain Property July 27th, 2006

General: San Diego 3 Bedroom 1.75 Bath, with an office you could make into a fourth bedroom. Asking Price Range $525,000 to $550,000



Why you should be interested: Nice quiet neighborhood with a lot of upscale nearby, well kept place, low maintenance yard yard. Move your family right into a nice home. Central to everything; downtown and sorrento valley are less than twenty minutes; mission valley is less than ten.



Selling Points: Vaulted ceilings, well kept, feels airy. Kitchen isn't new, but is in good shape. Yard is well kept. Good schools in the neighborhood. 3rd bedroom has separate entrance.



Why I think it's a potential bargain: The agent has overpriced it, and it is an estate sale (outside of probate). It's been sitting for months, with more months before that paying the mortgage and property taxes. Seller is motivated and needs to sell, in estate sales like this they have mom's house and they want cash to spend.



Obvious caveats: Traffic noise audible in front bedroom.



Why it hasn't sold already: It's overpriced. Anyone who goes to see it can find a better bargain elsewhere. As a result, it's sitting unsold without even a lot of folks looking at it.



IF you put zero downpayment and if you pay full asking price (which you won't), your payments (Principal & Interest) would be $3356 with a fully amortized loan (Assumptions: 1st at 5.875% 30 year amortization fixed for 10 years APR 6.104, 2nd mortgage at 8.35% Home Equity Line of Credit APR 8.427, on approved credit, not all borrowers will qualify.) Interest only loans are also available to lower the payment further.



With a 20% down payment, even if you pay full asking price (you won't), payment drops to $2593. (1st mortgage at 5.75% rate 30 year amortization fixed for 10 years, APR 5.965, no second. on approved credit, not all borrowers will qualify.) Interest only loans are also available to lower the payment further.



If you keep it ten years and it averages only 5% annual average appreciation per year: It would be worth approximately $890,000. Your equity, using the zero down payment scenario described above, would be approximately $430,000. As opposed to a $1900 per month most comparable current rental and investing the difference at 10% per year tax free, you would be approximately $125,000 ahead of the renter, after the expenses of selling.



Fact you should be aware of: Close enough to a major street that I heard traffic noise in the front bedroom.



I'm a buyer's agent. I find places like this that can be gotten at bargain prices. I save you money without costing you a penny. Nor are these the only ones I find. In order to protect everyone's best interests, all I ask for is a Non-Exclusive Buyer's Agent Agreement. This is a standard California Association of Realtors form that says you are free to work with other agents if you feel they can do a better job, but if I find the property you want, I'm the agent you'll use. That's fair.



Contact me: Action Realty 619-449-0723, ask for Dan or email danmelson (at) danmelson (dot) com.