Executive summary:
As a buyer of a property in the Villages:
your financial situation, cash or mortgage,
your urgency to move to the Villages,
the particular properties and the sale prices while you are looking,
the bond status and
your negotiation skills
will all factor into your decision of which house to buy.
Quote:
Originally Posted by retiredguy123
I guess it depends on the market. You may not accept an offer with a deducted bond, but other sellers will. Having a bond gives the buyer more options. If they don't want a bond, they can just pay it off. If they want a bond, they can keep it. But, once the bond is paid off, it cannot be reinstated.
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Correct! as always.
Quote:
Originally Posted by retiredguy123
In some cases, a paid off bond can prevent a sale because the buyer cannot get a mortgage high enough to cover the paid off bond amount that the seller has included in the sale price.
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Because the bond is not part of the appraised value of the home by the bank, and the bank will own the house, not you. You are renting the property from the bank, or renting the money, which ever way you want to look at the rental. The market price is determined by the buyer and seller accepting an assumed fair price for the property, whether or not it is fair is the judgement of the observer.
Two same size models on the same street, with the same acreage,
Both houses will be appraised for about the same price by the bank.
House A has no bond and the price is set at $500,000
House B has the bond payment and the price is set at $500,000
For the buyer, house A is the cheaper house
For the seller, house B is the better return on cash / capital spent.
House C has no bond and the price is set at $530,000, including recouping the bond
House D has the bond payment and the price is set at $500,000, with a $30,000 bond remaining.
House C appears to be more expensive, and would most likely be the second choice,
House C would not appraise well for the mortgage, but House C may get an all cash sale offer,
(no mortgage) or House C may get a negotiated reduction, may be equal to or better than the house D.
part of the final agreed price are factors hidden/unknown by the final sales price:
the time frame the seller has to sell the house, willingness to take a discount
the buyer's interest in that particular house, based upon intangibles of the location, view, tree, color, and the direction of the market prices in the recent past, as a real estate buy is an emotional based transaction.
But if you read all the comments, many to most people will not consider the bond balance nor payment in the agreed upon sale price of the house, because they want the house for whatever reason. And House C seller may turn down everything but the full sale price.
So as a buyer of a property in the Villages, your financial situation, your urgency to move to the Villages, the particular property and the sale price, the bond status and your negotiation skills will all factor into your decision.
so there really is no one correct answer. .
good luck!
retired finance guy