Individual Economics in the Age of COVID-19

No inspection is really common around here (upstate ny). When you’re buying farmhouses from the 1800s maybe problems are assumed.

Can you not do a pre-offer inspection, but no contingency? That is the standard in DC - you at least get to have your inspector do a walkthrough and see if he spots any major issues.

It sucks as it can be expensive if you’re making lots of offers, but think it’s still worth it.

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In Canada pre-offer inspections are pretty normal too in competitive markets. Its how i bought my last house in 2020 (pre-covid).

Ive been renting the last decade.

I would 100% continue renting rather than buy a house sans inspection

Thanks for the advice and ideas.

Every house we have offered and waived the inspection contingency has been inspected by the seller and that report is provided up front. Sure, their inspector may have missed something, but that’s completely possible for my inspector as well.

I could do my own pre-offer inspection as Johnny and Goose mention. It would be more expensive to have my person inspect each house we offer and probably a pain for me to schedule one nearly every week.

Regardless, we still have to waive the inspection contingency to make a competitive offer.

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I would be fine waiving an inspection if that’s what it takes. It’s rare to find a good home inspector to begin with, but even when you do they’re only looking at what they can see. The odds of an inspector finding a major, visible issue that a buyer with a little bit of basic knowledge wouldn’t see on their own aren’t that high. The real value in a home inspection is getting someone to report all the petty issues they can find to give you ammunition to renegotiate the purchase price (via concessions) at the point in time where you have maximum leverage (no competing offers and relisting a home after a failed inspection contingency poisons demand).

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https://www.wsj.com/lifestyle/dinks-married-couples-child-free-tik-tok-9747783a?mod=mhp

Don’t know why there aren’t previews for WSJ anymore. This is an article about living that DINK life

I live that life where is my WSJ article???

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Comments are full of MAD boomers

DINK’s is a delayed adolescence, where one refuses to grow up - fine when you are young, but wears thin in the 50’s - especially with a divorce.
And who will run the power plants and provide the medical services when they are sick in their retirement years? The children of their peers, who they mocked when going on their European vacations.
This article is a paean to self indulgence. Civilization and democracy only survive when people are engaged in working for the common good, and not just seeking their own pleasure.

Those young assholes need to stop making their own decisions and instead be working hard and producing hard working offspring to make sure I don’t go without my fat, over-entitled lifestyle in the near future. My pension ain’t cheap.

100% that their kids hate them

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I love some boomer hate but I think I hate the Christmas photo with a dressed up dog more

And I’m (we’re?) a DINKWAD

I need a psychologist to unravel this.

Hates that his kids didn’t reproduce?
Who got divorced?

I guess it’s city dependent. Friends of mine have bought homes in Richmond heights and Webster groves in the last 6 months and both had inspection contingencies.

I’m assuming you know those cities based on your screen name, apologies if you have no idea the areas I’m talking about.

Unfortunately the screenname is a holdover from when I still followed baseball and even had a favorite team! I have moved a few times since then and would have to rename myself to Mariner Moose to match my current location.

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Questions:

For our personal financial situation, being a self-employed options trader carries a lot more employment and income risk than most people. My plan for extra earnings after taxes is to keep a large amount of money in a High-Yield Savings Account as long as that is paying higher than the interest rate on our mortgage (10-year ARM at 3.25% with 8 years remaining). If the interest rate on the HYSA goes below the mortgage, we would pay off the mortgage early. We’re still doing dollar-cost averaging into Vanguard ETF Portfolios, but that is maybe 25% of our spare cash where it would be much higher at our age if my employment was more stable.

Questions are:

  1. If you hit $250k in an account, are you opening a second HYSA to keep your accounts below the FDIC insurance limit, or in the aftermath of Silicon Valley Bank is that no longer really a concern?

  2. Are Vanguard Accounts FDIC insured? Like, in the (I assume almost impossible) event that Vanguard goes bankrupt, what happens to the ETF’s and the value of them and deposits people have in their brokerage accounts?

I think odds of your savings account getting wiped after a bank failure are very low, but no reason not to open another account if you’re worried about it.

Mutual funds are insured by SPIC up to $500k, but even if Vanguard went busto you should still own the securities. Any scenario where the government allows Vanguard to go busto would be terrible for other reasons.

Agree with econophile’s answers.

Only thing I’d add is that your calculation is not quite right:

You have to factor in taxes. Your interest is being taxed, which favors paying off the mortgage. You may have some mortgage interest deduction, which favors putting the cash in the HYSA. The first factor should be greater than the second, which means even if the HYSA interest rate is slightly higher than the mortgage interest rate, you might still come out ahead by paying off the mortgage.

Make sure you are factoring in taxes into your comparison of paying off early vs. HYSA. In order to breakeven on a 3.25% mortgage you probably need to be getting north of 5% (depending on your fed and state rates and whether you are subject to NIIT).

3.5%/(1-tax rate)

Good points. My income is taxed on a K-1 so it’s counted as Capital Gains and not Ordinary income, so our Ordinary income comes just from my wife’s earnings.

Hadn’t factored taxation on interest income though so that certainly changes the calculations from what I had been counting on.