Buying a House

[jb5]

As we've been looking at nice rentals, it's becomming clear that buying may be a better deal, as about 5 years' rent would pay for these homes.

So a few questions:

-Is asking price typically paid for a high end home that's been on the market for 6 plus months or would owners expect to get significantly less?

-thinking about resale, do houses in areas like Belgrano R typically take long to sell?

-is there anything unusual about buying a house other than the cash changing hands we should know about?

 

[fifs2]

-Is asking price typically paid for a high end home that's been on the market for 6 plus months or would owners expect to get significantly less?

-thinking about resale, do houses in areas like Belgrano R typically take long to sell?

-is there anything unusual about buying a house other than the cash changing hands we should know about?[/quote]



I know Perry the real estate expert will be a real source of valuable info on this but as a house owner and with friends in the process of buying or selling, my own take would be:

- It was initially unusual for me to see houses on our street for sale for nearly a year as houses tend to move quicker in Europe (or did pre crash) but from experience I believe that Argentines are prepared to wait longer for the sale and hence they dont reserve a new house till they`ve sold their own property - the concept of bridging loans is simply unthinkable here. A property 6 months on the market may only affect the property price positively for you if the sellers have changed estate agents and still failed to sell which might demonstrate some issue with the house or price..otherwise they may just be hanging out for the right offer. One set of friends recently sold their $380k property in 6 weeks. Another set of friends have the laziest realtors on earth and havent shifted their 220k property in 4 months in spite of it being gorgeous and real value for money (theyre changing agents needless to say). We bought our own house by making a silly low offer and it was accepted so it doesnt hurt to try.

Cash purchasing aside, the purchasing process has its little nuances - the seller usually dictates the place where the boleta de compra is signed and the deposit paid. The buyer usually dicates location of final escritura as that is the person with the large bags of cash in hand. Just be careful and use professional security for any money transfers. Prosegur charges $1 per $1000 for secure cash transfer in capital.

Belgrano R is so lovely - but too far for us to commute to the micro-center. Resale timing in any barrio all depends upon timing of the market - prices are high now but will still rise most say..but in 5 years the market could be depreciated and you may very well have to sell for a loss. Non residents also pay higher taxes on sale so I`d seriously ask a realtor to outline all associated costs. Perry may not be the person to ask on this particular subject as like all realtors hes inclined to say the good times will last for ever.

Best of luck with it. Personally speaking we bought 2003 when the market was very low so its worked out well but I wouldnt be inclined to dip my toe in now for a short period of 5 years.

 

[gouchobob]

-Is asking price typically paid for a high end home that's been on the market for 6 plus months or would owners expect to get significantly less?

-thinking about resale, do houses in areas like Belgrano R typically take long to sell?

-is there anything unusual about buying a house other than the cash changing hands we should know about?

I know Perry the real estate expert will be a real source of valuable info on this but as a house owner and with friends in the process of buying or selling, my own take would be:

- It was initially unusual for me to see houses on our street for sale for nearly a year as houses tend to move quicker in Europe (or did pre crash) but from experience I believe that Argentines are prepared to wait longer for the sale and hence they dont reserve a new house till they`ve sold their own property - the concept of bridging loans is simply unthinkable here. A property 6 months on the market may only affect the property price positively for you if the sellers have changed estate agents and still failed to sell which might demonstrate some issue with the house or price..otherwise they may just be hanging out for the right offer. One set of friends recently sold their $380k property in 6 weeks. Another set of friends have the laziest realtors on earth and havent shifted their 220k property in 4 months in spite of it being gorgeous and real value for money (theyre changing agents needless to say). We bought our own house by making a silly low offer and it was accepted so it doesnt hurt to try.

Cash purchasing aside, the purchasing process has its little nuances - the seller usually dictates the place where the boleta de compra is signed and the deposit paid. The buyer usually dicates location of final escritura as that is the person with the large bags of cash in hand. Just be careful and use professional security for any money transfers. Prosegur charges $1 per $1000 for secure cash transfer in capital.

Belgrano R is so lovely - but too far for us to commute to the micro-center. Resale timing in any barrio all depends upon timing of the market - prices are high now but will still rise most say..but in 5 years the market could be depreciated and you may very well have to sell for a loss. Non residents also pay higher taxes on sale so I`d seriously ask a realtor to outline all associated costs. Perry may not be the person to ask on this particular subject as like all realtors hes inclined to say the good times will last for ever.

Best of luck with it. Personally speaking we bought 2003 when the market was very low so its worked out well but I wouldnt be inclined to dip my toe in now for a short period of 5 years.[/quote]

I would say this is pretty good advice. I would also be reluctant to jump in now. I guess it would depend on what you think the economy is going to do. If you think the country is just going to keep rolling along buy now, if you think its only a matter of time before there are serious economic problems here I would wait. In South America in general real estate and other markets have been subject to big swings up and down in the past.

 

[steveinbsas]

As we've been looking at nice rentals, it's becomming clear that buying may be a better deal, as about 5 years' rent would pay for these homes. ?

Most (nice) houses in Belgrano are priced well over $400,000 USD. I don't think five years rent would come anywhere near the purchase price of these homes. If the rent was $3000 per month the five year total paid in rent would only be $180,000. That will buy an 85-90 mtr2 apartment in Palermo.

-Is asking price typically paid for a high end home that's been on the market for 6 plus months or would owners expect to get significantly less?

If anything, they will raise the price,

-thinking about resale, do houses in areas like Belgrano R typically take long to sell?

How long is a piece of string?

-is there anything unusual about buying a house other than the cash changing hands we should know about?

Make sure you have an inventory of everythin that is included in the sale, including the kitchen stove and the heaters. Air conditioners are usually not included in the sale unless specified...neither are curtains, curtain rods, and installed light fixtures.

 

[BAwithkids]

As we've been looking at nice rentals, it's becomming clear that buying may be a better deal, as about 5 years' rent would pay for these homes.

I know you've looked at some furnished rentals... Is this true of UNfurnished two-year rentals?

 

[citygirl]

I would guess the rent on those houses is closer to 5000 USD a month than 3. But yes, in 5 years, 240K would still probably be much cheaper than buying. And the average price on those beautiful old houses is probably much closer to 600K than 400K.

So I would check your figures on renting/buying.

Steve and Fifs mentioned the major things. Transactions are done in cash, non-residents pay substantially higher taxes, getting money in & out of the country is a headache and not cheap, usually when you buy a house, unless it is specified in the contract, assume everything in the property will be going with the previous owner (light fixtures, ACs, heaters for the pool, etc, etc).

Frankly - if you're only here 5 years, I would be cautious. It is is a volatile economic and political climate. That being said, barring a crash, you probably won't lose money on the price but you will have a lot of headaches and a lot of capital tied up which may take a while to unwind after you leave (having to sell the house, get the money out of the country, etc) So no, I don't think it's super risky in that you would lose money on the house but at the end of the day, you may not make any money and you have to deal with the time/headache of having to sell it in a few years.

 

[jb5]

Thanks for the very helpful info.

Some of the high end homes we've looked at rent for MUCH higher than $3K/mo. We've done the math and 5x is about right on many of the top end rentals. Seriously! A shock to us too.

We will rent for a bit and see what the next year and the election brings, but we want to be ready to pounce at the right time.

Withkids, the houses I'm talking about are 2 year rentals, furnished or not seems negotiable.

In the end though we may only be here 5 years, I'm wondering if keeping such a house as a rental may be a decent investment. Lots of embassies in Belgrano, wondering if their staffs get nice rentals or what the overall market for higher end rentals is like.

 

[citygirl]

Sorry - to clarify - the 5K a month I'm referring to is for unfurnished. Renting one of the super nice homes furnished would probably be between 8K and 10K a month But again, houses in that area are probably average 600K and the really beautiful ones are easily a million.

 

[jb5]

So take 10K/mo for 5 years. There are some 500m2 plus houses for just over $500K. These need work but would yield very beautiful homes worth maybe $850K with $100K additional investment.

We've seen people ask that kind of rent for fixer uppers, but don't know if they get it.

Citygirl, how current do you think your numbers are? Have you seen nice, unfurnished Belgrano homes for $5K/mo recently?

 

[MorganF]

My philosophy (when I bought my apt): I didn't approach it like an investment; it's not obvious or clear in any way that a real estate investment in Argentina will be profitable for you.

However, when I bought my (awesome!) apt, I took into account to a significant degree the non-financial factors: I can never be kicked out, I never need to hunt for another place to live, I can paint or knock down walls or anything reasonable I want to at all and no one will ever tell me not to (I just did knock down a wall a few weeks ago btw!), I can finally, after years of searching, have a place I call "home".... now, lets say I value all of these things at $X,000 (fill in "X" with whatever value you would place on all of those, and any other psychological/emotional factor) -- therefore, even if the value I paid decreases by $X,000, I still come out ahead!

Economics isn't about money; it's about happiness. (Or "utility", which is basically the economist's way of technically talking about something that approaches the fluffiness of happiness.)