[RickeyD]

Originally Posted by 784caroline

My point was if your receiving less in interest than what you are paying on the bond (probably between 4-5%) it may be wise to pay it off. Who knows where interest rates on CDs next month never mind 5 years out..

Problem comes with human nature. If I have a bulk amount of let's say 25K, I'll either want to buy a new car OR sock it away in a safe investment. Conversely, if I'm saving let's say $1,200 a year because I payed off my bond that's a hundred bucks a month I'm probably gonna **** away every month on whatever. I'd rather pay the hundred bucks a month for the bond and look at a bank statement of $25,000 in my name.
Bottom line, all the real estate experts say DON'T pay off the bond. Another expert says "life happens".

[rustyp]

My gut tells me there is some percentage of not paying off the bond proponents that can't afford to do it. Thus comfort in thinking they are smart not poor. This is akin to people telling me it makes sense to take out a mortgage. Justification - low rates/write offs. Yes but where are you making money at higher rates. Then the mother of all question that gets the blank stare - how much does the required life insurance on that mortgage cost at your age ? So what is the real effective mortgage rate ?

[RickeyD]

Originally Posted by rustyp

My gut tells me there is some percentage of not paying off the bond proponents that can't afford to do it. Thus comfort in thinking they are smart not poor. This is akin to people telling me it makes sense to take out a mortgage. Justification - low rates/write offs. Yes but where are you making money at higher rates. Then the mother of all question that gets the blank stare - how much does the required life insurance on that mortgage cost at your age ? So what is the real effective mortgage rate ?

Not a good example. If you pay off the bond then move, your money is gone forever. Not so with the mortgage. Your house equity pays it down.

[Challenger]

Originally Posted by RickeyD

Problem comes with human nature. If I have a bulk amount of let's say 25K, I'll either want to buy a new car OR sock it away in a safe investment. Conversely, if I'm saving let's say $1,200 a year because I payed off my bond that's a hundred bucks a month I'm probably gonna **** away every month on whatever. I'd rather pay the hundred bucks a month for the bond and look at a bank statement of $25,000 in my name.
Bottom line, all the real estate experts say DON'T pay off the bond. Another expert says "life happens".

Can you name a "Real Estate Expert" that says don't pay off the bond? Not a self described expert, please.

[Boomer]

Originally Posted by RickeyD

Problem comes with human nature. If I have a bulk amount of let's say 25K, I'll either want to buy a new car OR sock it away in a safe investment. Conversely, if I'm saving let's say $1,200 a year because I payed off my bond that's a hundred bucks a month I'm probably gonna **** away every month on whatever. I'd rather pay the hundred bucks a month for the bond and look at a bank statement of $25,000 in my name.
Bottom line, all the real estate experts say DON'T pay off the bond. Another expert says "life happens".

Aw, RickeyD, it is so sweet of you to call me a real estate expert. Thanks.

(I don't know why some of those who choose to pay off the bond get so offended by those who choose to view ROI differently and/or figure they will probably sell and will need to list competitively. Geez.)

[Challenger]

Originally Posted by Boomer

Aw, RickeyD, it is so sweet of you to call me a real estate expert. Thanks.

(I don't know why some of those who choose to pay off the bond get so offended by those who choose to view ROI differently and/or figure they will probably sell and will need to list competitively. Geez.)

"list competitively" sounds like a term to disguise the real financial impact of the bond.

I applaud the use of the Bond mechanism by the developer as a financing method. What I object to mainly is the lack of knowledge that real estate sales people have of the financial meaning for buyers and thier obvious attempt to obscure the real costs to buyers. I believe in many cases their obfuscations border on fraud.
To not fully disclose that an existing bond balance "must " be added to the final sales price in determining the real price of the home is avoiding full disclosure.

[Bay Kid]

To me a bond is like having credit card debt.

[Challenger]

Originally Posted by Bay Kid

To me a bond is like having credit card debt.

Even more , it is a superior lien on your home

[Boomer]

Originally Posted by Challenger

"list competitively" sounds like a term to disguise the real financial impact of the bond.

I applaud the use of the Bond mechanism by the developer as a financing method. What I object to mainly is the lack of knowledge that real estate sales people have of the financial meaning for buyers and thier obvious attempt to obscure the real costs to buyers. I believe in many cases their obfuscations border on fraud.
To not fully disclose that an existing bond balance "must " be added to the final sales price in determining the real price of the home is avoiding full disclosure.

Actually, Challenger, I also believe there is a lack of understanding of the bond among a significant percentage of buyers, coupled with a significant percentage of agents with an unwillingness to educate. Buyers must know what questions to ask. I think it is a good idea to look up the bond information for a property by specifics. I started a thread a few weeks ago with instructions on how to do that. (I wish I would not keep forgetting to learn how to link on my iPad or I would link my own old thread here. ) I take financial decisions very seriously. Oh my! I just looked at this post in "preview." Please forgive the bold type. I am not yelling at you.

[Bogie Shooter]

Originally Posted by Boomer

Actually, Challenger, I also believe there is a lack of understanding of the bond among a significant percentage of buyers, coupled with a significant percentage of agents with an unwillingness to educate. Buyers must know what questions to ask. I think it is a good idea to look up the bond information for a property by specifics. I started a thread a few weeks ago with instructions on how to do that. (I wish I would not keep forgetting to learn how to link on my iPad or I would link my own old thread here. ) I take financial decisions very seriously. Oh my! I just looked at this post in "preview." Please forgive the bold type. I am not yelling at you.

Here it is.
Bond. THE Bond. How to find the numbers.

[RickeyD]

Originally Posted by Challenger

Can you name a "Real Estate Expert" that says don't pay off the bond? Not a self described expert, please.

Ok, anyone with the financial aptitude and/or professional designation in real property transactions will tell you that a house with a prematurely payed off bond will not sell for more than a similar house with the bond intact. A real estate appraisal looks at location, type of construction and square footage to determine value, only. There is no input line on an appraisal form for a bond.
Anyone who pays off the bond is stuck with that hot potato forever, the action can not be passed on.

[Boomer]

Originally Posted by Bogie Shooter

Here it is.
Bond. THE Bond. How to find the numbers.

Thank you, Bogie. You are a gentleman and a scholar.

(I must give warning that I might be going on and on in this thread for a while because today I am confined to quarters, with my iPad and my Kindle. Right now, the iPad is winning my attention.)

[Challenger]

Originally Posted by RickeyD

Ok, anyone with the financial aptitude and/or professional designation in real property transactions will tell you that a house with a prematurely payed off bond will not sell for more than a similar house with the bond intact. A real estate appraisal looks at location, type of construction and square footage to determine value, only. There is no input line on an appraisal form for a bond.
Anyone who pays off the bond is stuck with that hot potato forever, the action can not be passed on.

Data instead of local lore would be more believable. Sales people reap the advantage of being able to quote a lower price when the bond is intact. They have no incentive to explain fully what he buyer is really paying.

[Boomer]

Originally Posted by Challenger

"list competitively" sounds like a term to disguise the real financial impact of the bond.............
.................

Hi Challenger, I'm back. I already responded to the last part of your post, thus the dotted line to indicate I cut it out for this time.

Anyway, I was not trying to "disguise" anything. If I may repeat myself....self....self (that's an echo) I am addressing only the ROI of a paid off bond when selling.

When listing a home for sale, a seller has to be able to compete and not overprice the market. Sitting self-righteously on a paid off bond while insisting it must be added into the list price, could make 'sitting' the operative word there. Time is money, too.

The market is the market, whether we like it or not.

[RVRoadie]

There is no doubt that convincing a future buyer that your house is worth more because the bond is paid is a hard sell. It is just human nature to lump an unpaid bond in with future property taxes, which is where it is collected.

For me, the biggest advantage to paying off a bond, is that it is a disincentive to be looking at new houses. How many residents have gone out to "look" at open homes and ended up buying. If you are happy with your house and you have the money, why not pay it off. Let your heirs worry about it.