Richfield House Hunt: It's the Cost, Not the Price When Buying Real Estate

For those who want to buy a home but are waiting for the prices to drop further, keep the following in mind: Prices may drop, but interest rates will rise from their current, historically low levels.

Check an amortization book from 10 years ago. These handy little books included charts that would allow buyers to check how much a monthly payment would be depending on price and interest rate. Ten years ago these books would have included calculations for interest rates up to 21.5 percent. The lowest rate was 5.5 percent. Right now, the rate for an FHA loan with a 3.5 percent down payment is 4.25 percent.

That means that the monthly payment for a $150,000 home with 3.5 percent down at 4.25 percent would be $716. If the price of the house dropped 10 percent but the interest rate rose only by one percent the payment would be higher. In addition, if interest rates increased and prices remained the same or rose, the difference would be even greater.

When buying real estate, remember it’s not just the price, it’s the cost. The differences in this example may seem small, but over the life of the mortgage, waiting too long to buy might end up costing a lot of money.  

With that said, here is a look at five Richfield homes on the market:

House No. 1: 6636 Clinton Ave. S.

Listed by: Brokers, Inc.

Price: $127,000 Taxes: $2,391

Description: One- and one-half story, single-family home; two bedrooms, three baths and 1,600 finished square feet. Move right into this newly remolded starter home at a bargain price. You’ll love the beautiful master suite with a walk-in, tiled, triple-headed shower, double sinks and a heated floor. There are also a separate formal dining room, hardwood floors, a walk-in closet, a security system and a wonderful yard with deck, patio and an in-ground sprinkler. There are egress windows in the lower level. The large kitchen has plenty of new Formica counter tops and loads of cabinets. This is a HUD home, so FHA and FHA Rehab 203k mortgages are available, too.

House No. 2: 7506 Pillsbury Ave. S.  

Listed by: Re/Max Real Estate Properties  

Price: $129,900 Taxes: $2,250  

Description: One- and one-half story, single-family home; three bedrooms, two baths and 1,220 finished square feet. This is a lender owned property, perfect for investors (no investor restrictions) or home owners who want a smaller home. It’s cute and cozy with a large backyard, larger upper bedroom and a lower level office. There’s central air conditioning, nice new paint and beautiful hardwood floors as well. Lots of trees keep this home shaded and comfortable.

House No. 3: 7627 15th Ave. S.

Listed by: GreenKey Real Estate Group

Price: $168,900 Taxes: $2,260

Description: One-story, single-family home; three bedrooms, one bath and 1,700 finished square feet. Completely remodeled with dramatic granite countertops and new stainless steel appliances in the kitchen, refinished hardwood floors and a brand new furnace; this home sparkles. Walk out to the deck and a backyard ready for play or gardening. There’s easy access to highways and shopping areas, too.

House No. 4: 6627 15th Ave. S.

Listed by: Keller Williams Integrity

Price: $135,000 Taxes: $2,705

Description: One-story, single-family home; two bedrooms, two baths and 2,135 finished square feet. The perfect rambler from the mid-century, this home has 21st Century extras including central air condition, new windows, an expanded kitchen, updated bathrooms and a two-level deck. The family room is on the main floor and includes new carpet and a fireplace. The lower level includes a large amusement room, a den and an office. The large back yard has a privacy fence as well.

House No. 5: 6214 Morgan Ave. S.

Listed by: Coldwell Banker Burnet

Price: $235,000 Taxes: $2,828

Description: Two-plus stories, single-family home; three bedrooms, two baths and 1,856 finished square feet. It starts with a 30-year roof, new soffits, insulation and mechanicals and just gets better. Like to cook? The kitchen cabinets have maple fronts, custom counters and sleek black appliances including a 5-burner range. Like to entertain? You can, in the large living room with hardwood floors and wood burning fireplace. Or, cozy around the second brick wood burning fireplace in the amusement room. Like being outside in the summer? Take advantage of the large deck, Dutch Cobble paved grilling area and the fire pit in the landscaped backyard. Need storage? The master bedroom has two closets and the lower level has a large laundry room and storage area. Like to take long hot showers?  This home has a newer HydroSense 50 gallon water heater.