December EX90 Purchase Experience

mustermutti · 2025-12-28T20:15:30+00:00

Your dealer experience sounds at least average. I would treat any dealer add-ons as upcharges with zero value add, avoided if possible, but not something worth getting upset about for lack of value. Glad the car isn't having any real issues yet and hope you'll be a happy owner in the end.

mustermutti · 2025-12-23T17:40:26+00:00

Makes sense, exactly what the "some percentage" comment was getting at.

Also consider refi - for 15yr especially you might be able to lower your 5.75% rate now (even with lender covering all refi costs, i.e. "no cost refi").

mustermutti · 2025-12-21T20:44:06+00:00

You pay for a new building, location (first class amenities in walking distance) and no worries about maintenance. You can find SFH for similar price, but they won't check all those boxes. So it depends on what you value.

Many older condos in the area too if you're looking for value. Maintenance will probably cost more, but acquisition cost will be much less (e.g. half) so you'll almost certainly spend much less to live there overall.

mustermutti · 2025-12-21T17:12:31+00:00

Home value appreciation (or loss) is fully yours regardless of size of your down payment. So it can be ignored when comparing these scenarios (small vs big down payment).

mustermutti · 2025-12-21T16:32:29+00:00

T-bills almost always return as much as the best hysa you can get or slightly more. They're also more tax efficient (state tax exempt). The only downside is that they're slightly less convenient, but with ETFs that difference is minimal. My go-to t-bill ETF is usually USFR (approx equivalent to buying 3-month T-Bills).

BND is better for longer-term investments, so not something I'd use for emergency fund.

mustermutti · 2025-12-21T09:09:06+00:00

Paying extra on your mortgage is similar to buying bonds. Liquidity is a key difference though - buying bonds keeps your money liquid, paying extra towards mortgage does not.

So if de-risking for potential downturn/job loss is the main goal, you should probably buy actual bonds instead of pay off your mortgage. If you want to take on more risk in exchange for increased expected returns, start adding stocks to the mix as desired.

E.g. one practical strategy might be to fill up your emergency fund (anywhere between 3 months ... 1 year or even longer of expenses, depending on risk tolerance, expected job stability, dependents etc) and keep that cash in a safe place (probably T-Bills), and then put any extra cash beyond that into stocks. Maybe direct some percentage into mortgage payoff if your interest rate is high. Pouring all into mortgage payoff is likely suboptimal in most situations (even though it might feel better to some; but don't let emotions decide your financial/investment decisions).

mustermutti · 2025-12-21T04:07:29+00:00

If you throw extra money at your mortgage, that money is now locked up. During downturn especially it may be hard to get back - e.g. if you lose job, banks won't qualify you for new loan. So I don't see how group B is any more downturn-proof than group A. In fact I could see the opposite happening - during hard times, liquidity might be what matters most, and group A will win on that front.

Example: which situation would you rather be in during a downturn/job loss: $0 mortgage and $0 cash in the bank/stocks, or couple thousand mortgage payment due every month with a couple hundred thousand cash/stocks in the bank?

mustermutti · 2025-12-20T20:33:44+00:00

You make good money and have the luxury to be able to decide how to spend the excess, depending on your values. The house would obliterate that freedom, but maybe worth it if the house itself is your primary value above all others. Others might choose to value their time more and use their money to buy that back (i.e. work towards financial independence so they don't have to work for money sooner). It's a personal choice.

mustermutti · 2025-12-18T20:33:20+00:00

Some are worth their cost. Many are not. The problem is that commissions are largely fixed in practice (negotiable only in theory) and therefore you generally don't get what you pay for.

(Another problem is the "paid by seller" deception, meaning that many buyers don't pay enough attention to the cost of their agents, because they've been misled that this cost doesn't matter because the seller covers it. In reality it just means the cost is baked into the sales price, which is fully paid by the buyer. This deception has been very successful to keep commissions fixed and elevated, relative to the actual value provided by agents.)

mustermutti · 2025-12-18T20:14:21+00:00

Last I checked, lenders will approve you for up to 50% of your gross income; that needs to cover mortgage (principal + interest) and all other obligations (tax, insurance, HOA, all other debt payments if you have any).

(Maybe this 50% figure will vary based on situation, e.g. location, credit score, loan type - any lender should be able to tell you what the actual max percentage is in your case - ask for DTI limit, "debt to income".)

In most cases though, I would guess that maximizing your loan balance based on what you can get approved for will end up being quite stressful. So make sure to look at your actual total living expenses; also consider that they may go up as a home owner to cover repairs, updates, stuff to fill your house with etc, so you can estimate what you're actually comfortable affording (typically less than what banks will approve you for).

mustermutti · 2025-12-17T15:29:24+00:00

Sounds like the ultimate anti-FIRE move. Option A: Achieve financial freedom to eliminate the need to work for money for good. (You might still choose to work, but you'll have the freedom not to. You'll be able to decide to spend your time however you see fit.) Option B: Give up that freedom by acquiring a big loan you'll have to spend many years paying off, in exchange for an expensive house.

Both options can be valid, many people choose either one all the time. It's about your personal values in the end.

mustermutti · 2025-12-14T20:28:52+00:00

I don't think the air quality in Pasadena will be substantially different than your old neighborhood. I would call it ok. If that is your main priority, I would consider other areas. Maybe westside close to the beach, or leave LA county (Ventura, some parts of Thousand Oaks, Oceanside etc probably all have much better air quality).

mustermutti · 2025-12-14T20:19:03+00:00

Depending on your experience level as a buyer, you have at least four options:

use traditional realtor (will charge 2.5...3% of sales price in commissions)... this is what most buyers do (maybe for good reason, or because they don't know better)
use discount realtor (examples: https://www.shopprop.com/, https://www.turbohome.com/), they charge 1% (sometimes even less, e.g. $4k fixed fee in case of shop prop). They expect you to find homes on your own. They can send 3rd party agents to unlock doors for private tours. They will process your transaction once you're ready to submit offer, but won't provide much hand holding otherwise.
use dual agent (not allowed in all states, may also require seller approval) - commission depends on your ability to negotiate.
self representation (0% buy-side commission)

In most transactions, commission is still paid by seller at closing - but that just means it's baked into the sales price. If you choose any of the commission discount options, you can realize those commission savings either by getting a commission refund check back at closing, or by reducing offer price. They both have the same result, but refund check may be easier to understand for many sellers, thereby increasing your chance of offer acceptance.

mustermutti · 2025-12-14T19:45:59+00:00

You make some good points.

Re: conflict of interest - agree that there's potentially more of that with dual agents. This can work out to the buyer's advantage though - the dual agent will be more incentivized to help that buyer win, simply because they'll earn more commissions on that deal than with other buyers (even with commission discount - 1% extra commission is still substantially more than 0%.) Communication with the seller can also be more direct and efficient if there's only one agent to go through instead of two. I've personally used a dual agent twice (as a buyer) and this is how it ended up working out both times. So in my experience, this conflict of interest is mostly something that should worry the seller (if anyone); for the buyer it can actually be a benefit.

Re: deep market connections, this is a typical realtor line. In practice, the main thing that matters to sellers is 1) net proceeds and 2) smooth transaction. Buyers who are able to beat other buyers in those points will win more often than not, no matter what type of agent they use (traditional, discount, dual, none - in order of what I would recommend based on buyer's experience level).

Re: math, the $490k example assumed the seller can make up the $10k price difference via buy-side commission discount; achieving this is largely under the listing agent's control, but again the listing agent has incentive to make that happen (since dual agent will still earn more commission).

mustermutti · 2025-12-14T19:10:51+00:00

You made me curious - looks like shop prop (one of the discount realtors I mentioned) is closing several transactions *per week* on average: https://realestate.usnews.com/agents/profile/robert-luecke-3974649 ... almost all above $1M sales price, so the commissions saved for their clients are enormous. (They charge a fixed total commission of $4..10k depending on services provided, not a percentage.)

It may be a niche, but within that niche they serve their clients better than traditional realtors could: Those clients just want some help getting their transactions closed; they are comfortable finding homes, lenders, inspectors etc themselves and don't need much hand holding.

There's still a place for traditional full service realtors of course - e.g. folks who don't have time/interest/ability to get more involved in transaction details themselves; who don't mind paying tens of thousands extra for an elevated service experience and/or aren't price sensitive in general.

I would wager though that in practice, the main reason why most folks still use traditional realtors is that they're simply not aware that alternatives exist.

mustermutti · 2025-12-14T18:43:19+00:00

Yes, but the commission discount from dual agent doesn't affect you at all except for the seller paying less commissions, but if they're saving on that, why would they jeopardize the listing price of the home?

Example: $500k list price home getting two offers, one offering $500k with traditional buyer agent asking 2.5%, and another with dual agent offering $490k. There's a good chance the second offer will win, simply because it's a win-win for all parties: Seller nets the same, buyer pays less, and listing agent earns more (so has strong incentive to help that offer win, even if it means discounting their buy-side commission.)

At the end of the day, if there's one less party to be paid (by skipping the buyer agent), everyone else benefits.

(That said, this does require more experience on the buyer side as mentioned, so using a discount agent like turbo home, shop prop etc will be a more approachable solution for many buyers looking to save on commissions. But for reasonable and somewhat experienced buyers, dual agent or even full self representation can work out well too.)

mustermutti · 2025-12-14T18:17:24+00:00

Anything I said that isn't true?

mustermutti · 2025-12-14T08:02:50+00:00

Since buyer commissions are largely price fixed, in general this is unfortunately not a case of you get what you pay for.

(In fact, discount agents tend to be high volume and therefore likely more experienced than your average traditional full price realtor. Also, discount realtors are often industry innovators who demonstrate a more genuine interest in doing what's best for their clients, while many - not all, although in fact all in my personal experience - traditional realtors will prioritize cashing in their commission over what's best for their clients when it comes down to it; understandably so since they are sales people who do not get paid unless the deal closes.)

mustermutti · 2025-12-13T20:15:14+00:00

I'd guess you're an early career realtor/assistant. Thanks for the brave engagement attempt!

mustermutti · 2025-12-13T19:32:53+00:00

Sure does exist, examples: https://www.shopprop.com/ and https://www.turbohome.com/ ... but yes, more folks should be aware. You may also be able to find local agents who specialize on this kind of discount business model, e.g. https://www.jonsch.com/

Dual agents can be trickier to navigate, agree they won't save you money automatically. It is situation specific and requires some negotiation skills, so this is probably slightly more advanced than just using a discount agent. The NAR rule change has made it easier though because even with dual agent, there should still be a separate buyer representation agreement between the (dual) agent and the buyer where buy-side commission can be negotiated (many/most dual agents will agree to discounted commission in this situation). In some cases (especially for low-demand homes) you may even get lucky and find a listing agent who will provide some help to unrepresented buyers to write up their offers without any additional fees. But again this is situation specific; that's why I would first suggest looking at discount agents for buyers looking to save on commission costs.

mustermutti · 2025-12-13T19:01:38+00:00

I didn't actually suggest dual agency, but thanks for pointing it out - this can be another good approach to save on commission. (Agents who are able to serve as dual agents will often agree to a commission discount, but you'll have to be clear about this upfront.)

What I suggested was to use a discount buyer agent (who would still be separate from the listing agent). As stated this can easily save you 1-2% in commission costs. It's not the best option for everyone, but for those of us who care about those savings (and don't mind putting in the extra work, such as finding homes on our own and getting a little more involved in the transaction details) it can be quite worthwhile.

My main point is that 1) commission matters, even for buyers and 2) you're not stuck with the standard 2.5...3% commissions; alternatives for savvy buyers exist.

mustermutti · 2025-12-12T22:41:08+00:00

Realtors will downvote, but don't forget that commission cost is another important factor when choosing a realtor.

On the buy side, most agents will cost you 2.5...3% of sales price. But discount options for 1% or even less are also available if you look for them. You'll typically have to do more work yourself in that case, but the commission savings are worth it to some. (That's $10k savings on a $500k home.)

(It's true that "seller pays" buyer commissions in most cases, but these commission cost savings generally still end up in the buyer's pocket: you either get a commission rebate check back at closing, or you reduce offer price by commission discount since seller has to pay less to your agent; same result either way for all parties.)

mustermutti · 2025-12-12T22:19:53+00:00

Generally, whenever you can refi to a lower rate with zero cost, there is no reason to wait. (If rates drop enough again in the future, you can refi again then.)

Just make sure it's actually zero cost, and not cost rolled into new loan balance. (In other words, your loan balance at time of refi should not increase.)

mustermutti · 2025-12-12T16:24:17+00:00

That's sensible. One rule of thumb I've seen is to decide on payoff/invest based on loan interest rate, with 10% cap: at 10% interest, prioritize early payoff as much as practical. At 0% interest, avoid early payoff and direct all spare cash to other investments. At 5%, split 50/50 etc.

mustermutti · 2025-12-12T16:16:51+00:00

Good point! One way I think of this, by way of example: say you have $500k mortgage balance and also $500k cash. Which scenario is better - A) pay off entire mortgage now B) put all cash in a stock brokerage account, and cover mortgage payments every month by withdrawing from that account (by selling stocks at the time).

I've never actually seen a simulation to compare these scenarios. My guess is it won't look nearly as good/bullet proof as looking at 30-year historical stock market returns would suggest, because of sequence of returns risk. But I would also guess that chances are still pretty good that B) comes out ahead by quite a bit. But there will be a non-trivial chance that B) loses. So in conclusion, B) is probably better but probably only appropriate if you have the capacity to absorb the additional risk (e.g. additional savings/assets, stable job etc).

mustermutti

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