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The seller will maybe pay 7-8% in terms of transaction costs. Lets assume a 30% increase in a house payments is enough to kick someone out. The costs of a typ
by JamesBarney 9y ago
The seller will maybe pay 7-8% in terms of transaction costs. Lets assume a 30% increase in a house payments is enough to kick someone out. The costs of a typical house costs 6%(mortgage + taxes + insurance + repairs). That's means you need $1,000 a month for a 200k house.(Seems reasonable). Avg. California property taxes are 1.25%. So for that to increase your total payments by 30% you would need your house' value to increase $288,000 before it knocked you out of house and home. Of course with the 8% in transactions costs you leave with a modest $260k in profit.
I might be heartless but it's hard for me to feel too much sympathy for this individual.
- dv_dt 9y ago260k in profit which needs to be rolled into a place to live in the same market that just kicked you out of your home...
- xyzzyz 9y agoNot the same market -- in some saner market somewhere else. That's the whole point of the exercise.
- pyrale 9y agoSo the goal is to make the poor go away, in a place that will have less economic opportunities ?
- JamesBarney 9y agoI don't consider anyone with 300k in net worth poor. And the goal is to not subsidize these individuals who have just had a massive windfall, which screws up the rental market leaving the truly poor(renters) SoL.
- xyzzyz 9y agoNo, the goal is to make rich go away, and make poor have a place to live where they have more economic opportunities. If you cannot afford to pay $1k/month property tax, it means that you have an asset worth around $1M, so by no means you are poor.