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Home > House Hunting = Fun! (HA!)
 

House Hunting = Fun! (HA!)

November 27th, 2007 at 07:22 am

Awhile back I mentioned that I had found a foreclosure house that we would probably be able to get at a greatly discounted price, but that needed to have semi-serious some work done. This house is in a desirable, established neighborhood and has "good bones" but it has some issues that are probably due to the fact that the people were losing their home and just stopped keeping it up.

Took DH to see it ... He looked at it for about 2 minutes and said "NO WAY."

Okey-dokey ... At least now I know that he didn't really mean it when he said he was willing to buy a fixer if it was a great deal!!!

We've been doing TONS of looking together the past week, and I've concluded that, in spite of what he says, he will really only seriously consider a brand new or almost new house that is in great condition. Okay; that's easy; I just automatically rule out any houses over 3-4 years old.

But he has also been showing interest in houses that are significantly higher in price than what we had talked about originally. [Interestingly, my target price that a couple months ago was "way too high" according to DH is now too low according to the same guy! ]

He found one house in particular that he is quite smitten with. I had been in the neighborhood and liked it, and suggested that DH go take a look. There was one house in particular I mentioned he should look at. When DH was on his way home from visiting that neighborhood, he called me. I asked him what he thought of the house and he said ... "Let's talk about it when I get home." All I could think was "Oh-oh!!!" When he got home, he was all sweet, asking if he could pour me a glass of wine, etc. All I could think was "Oh crap! What is he cooking up in that brain of his?" Well, turns out he visited several houses in the neighborhood and fell hard for one that is significantly higher $$ than what we have been looking at.

He took me out to see it, and to tell you the truth, other than being larger than what we would ideally like, it is a perfect house.

So I started crunching numbers. I guess I was hoping the numbers would say that the house wasn't remotely doable for us. Well, it's doable, and doable comfortably, according to the established rules of thumb. Motgage amount isn't a problem, since we'd be paying cash. House price would be no more than 2.5 times our average annual income (and probably more around 2.3 times, if we can get the price we think/hope we can). Property tax payments and upkeep are affordable. We'd still have plenty of cash reserves to keep DH's business running smoothly. We'd still have at least a year of expenses in our EF.

The sticking points for me are that the house would represent a larger percentage of our net worth than what I would like to see (I was shooting for no more than 25% but this house would be about 30% of NW), and we would lose the interest income on the money that would go in to the house. This last one's a biggie.

So, we are grappling with the question that everyone does (or certainly should) when they think about buying a house: What is most important for me when it comes to buying a house?

Since lists help me sort out my thoughts, I made a list of most important features of a purchased house. (If you can think of others, please let me know.):

- The price is cheap = Finances will be very comfortable

- The price can be had for significantly under market (it's a "good deal")

- The house has good investment potential

- The house is brand new or nearly new, in pristine condition

- The house is low-maintenance for an easy lifestlye (think condo as the easiest and go up from there)

- The house is small and/or energy-efficient = good for our planet

- The house is in a good location (safe, nice neighbors, easy to get to where you need to go)

- The house is the sort you would get a lot of pleasure living in = It's what "gorgeous" looks like to you

Both DH and I are struggling to figure out which qualities are must-haves for us. Of course, we'd love a house that is "all of the above" but we are realistic enough to know that at most we can hope to get half of those qualities.

DH reminded me that I am more practical-minded, and that he is more likely to use his 6th sense about these things (makes us a good team, I guess). Fact is, his 6th sense has resulted in some pretty good decisions for us so far. However, I know it would be foolish to make the biggest purchase of your life without really thinking it through first.

So ..... Am I being too cautious/conservative? ..... Is he developing "eyes bigger than his stomach?" ..... Will it take us another 2 years to buy a house? ..... Stay tuned.

9 Responses to “House Hunting = Fun! (HA!)”

  1. monkeymama Says:

    Double post...

  2. monkeymama Says:

    Oh, I don't envy you. Good Luck.

    Just reminds me when we were looking for our first home dh and his family said they were open to a fixxer. I am not sure I Was so open. But we looked at 2 "fixxers." One needed some new doors or something and the other had some old cabinets and hardware. More replacing fixtures than "fixing." Dh and his family freaked out about how horrid these places were. I had to laugh. Whimps. Hehe. The funny thing is I wasn't into the whole fixxer thing, but I wasn't scared of minor cosmetic repairs. Yeesh. Dh has never agreed to buy anything less than a model home, pretty much.

    Anyway, honestly, I think I would keep looking. You have nothing but time. Of course if dh will never come down, then maybe you should just realize that and go for it. I don't know.

    Honestly, I am mostly jealous you are living somewhere you can buy a house for 2.5 times your income. We moved here so we could buy a house 6 times my income. It was a major downgrade in price from where we come from. But I know how hard it is to find that "perfect" house. Tough choices! (Okay but maybe I envy you a tad - hehe. Though we have certainly made our choice not to move again anytime soon).

  3. fern Says:

    OK, i like to play devils'a advocate, so here a few thoughts...

    When you say low maintenance, does that mean it's vinyl siding? If the exterior has to be painted, i don't consider that low maintenance.

    You said that the house was larger than what you originally wanted, but then you said it's small and energy-efficient. What's the square footage?

    Keep in mind that a bigger house will cost you in other ways, like it's going to cost more to heat in the winter and cool in the summer. A larger house means you may need to spend money on additional furniture and other stuff to fill it up. It'll require more in the way of cleaning. Property taxes willl be higher.

    What i liked is that you said it was energy-efficient (how?), in nearly new condition and well within your budget. Well, it's a great time to be house hunting in this market. I can't remember if you have to sell a current house.

  4. Ima saver Says:

    I would definately stay away from a fixer upper. althought my house is pretty big, I enjoy having the big rooms in my house. Neighborhood is very important also.

  5. scfr Says:

    fern - The list wasn't a list of all of the features in one particular house ... don't I wish!!! ... but rather a list of the things anyone might look for in a house.

    We are trying to figure out which of those features are the most impoortant to use, realizing that to get one thing we will probably have to give up another. [For example, we looked at some cute little Green Star rated homes that even had a septic system where the water was treated and recycled for watering landscaping, but the location was God-awful, miles & miles away from the places we would be going, so we ruled it out. Besides, what is the good if you reduce the energy use in your home but end up driving more?]

    As far as ease of upkeep, we have owned both a condo and a home, so have a fair idea of how to judge this. Condos require the least amount of effort (no yard work, exterior maintained by association, hopefully) but that's not necessarily what we want. In addition to size of house, we have to consider the type of landscaping (for example a yard that is left natural rocks & trees is easier to care for than grass lawn and planted beds), types of materials used for construction both exterior (40-yr or 20-yr roof? stucco or Hardi-siding?) and interior (concrete floor or carpet? el-cheapo appliances or finicky European models or basic solid brands that get the job done and will last a long time?)

    One thing I have found interesting here in Texas is that slightly larger homes tend to have more shade trees, which should really help in keeping AC costs down. Not that we are looking in this size range (we aren't), but it is the biggest houses that tend to have zone AC rather than central, and that also helps keep energy costs down some (tho I doubt it is enough to offset the costs of having a bigger house).

    Where are we willing to compromise, and where are we not? That's what we are trying to figure out.

    But thanks for playing devil's advocate ... That is exactly what we are doing with ourselves, and it's extremely important.

    P.S. - No house to sell. We sold, relocated, and are in a temporary rental (sublease).

  6. scfr Says:

    Monkey Mama - Your story about your DH cracked me up! When I was growing up, I helped my mom re-paint old furniture and peel wallpaper, and watched her refinish wood floors by hand, wallpaper, and paint walls. My DH never held a paint brush in his hand until we got married and I asked him to do a small job (paint some brackets to match our walls) and he was astounded and delighted to find that painting didn't take a special degree! When one of our bedside lamps went on the fritz, he wanted to get new ones, but I just pulled out a homeowner's manual and figured out how to rewire it all by myself.

    My DH is like yours --- Can't seem to
    grasp the difference between refreshing/updating and completely renovating. In one house, I told him, close your eyes and pretend the ugly wallpaper isn't there, but he just couldn't do it!

    Thanks for the comments - I realize I'm in a pretty good position, but it doesn't mean the decision is easy!

  7. scfr Says:

    Ima saver - Thanks! I think a good neighborhood is one area where I don't want to compromise, either. My DH travels quite a bit on business and I want to feel safe when I'm home alone, and I hope to have nice neighbors where we are willing to help each other out. We had that where we used to live in Seattle, and it was wonderful.

  8. monkeymama Says:

    Actually, ask about the electric bills, roof warranties, etc. NEwer houses can offer considerable cost savings with materials that last much longer AND the energy efficiency can be pretty amazing. I don't find having a bigger house makes much difference on our energy bill; the energy efficiency more than makes up for it. I Can gurantee also that our bills are NOT twice as high as the houses 1/2 the size (built same year). There are economies of scale there. As with all repairs and maintenance. Just because you buy a house 1/3 bigger doesn't mean everything costs 1/3 more.

    IT's good to be aware of more costs with different types of houses, but newer houses don't follow a lot of the same rules that old houses do. But I would ask a lot of questions. That just popped into my mind reading Fern's posts. We bought a large/new home in 2001 and I find people like to think our repair and electric bills are insane. IT tends to be opposite. Not exactly what we expected when we bought. A nice side benefit. Big Grin

  9. katwoman Says:

    In addition to all the wonderful suggestions above some things that are overlooked are "acts of god". While you can't prevent them you can find out about some things. Things like, is the home in a hurricane/tornado alley? Flood zone?

    One way to find out is to get quotes for these types of insurance coverages for the addy in question. Hi rates = hi probablity.

    A great site to check out is floodsmart.gov to determine flood risk by addy. Here's the link:

    http://www.floodsmart.gov/floodsmart/pages/riskassesment/findpropertyform.jsp

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