S/O Homes - WWYD?

LCass · November 2012

As I mentioned in the other post, I'm always itching to buy a home instead of continuing to rent. Our place is good, but not great and I'm tired of not having somewhere that's really ours, y'know? We've got enough for a decent downpayment, but since we're both substitute teachers it would be hard to get a mortgage because it's not "steady" income.

Well, I check out the listings every now and then, and the other day I came across a cute house that is super cheap. It's probably about the same size as our current rental, maybe even a bit smaller. It's one level, 3 bedroom, 1 bathroom with a kitchen, living room and family room and a big backyard. We have enough that we could make about a 40% downpayment, and pay off the mortgage (and taxes and stuff) in 5 years paying a little less than we do in rent right now. It's crazy. There's no way that anyone would turn us down for this mortgage.

So here are the downsides (without having seen the house yet; our friend who is a real estate agent is trying to book a showing but the listing agent won't return her calls, very professional). It's more rural than is ideal for us. We're well-suited to suburbs, but this is in a pretty small town and we would be farther from things like grocery stores and stuff. It's also definitely not going to be our dream home or anything. In the five years it would take us to pay it off, we would almost definitely want to move somewhere bigger (maybe an extension would work, but I doubt it). DH grew up not far from the area and says that there's a lot of. . .how do I put it? less desirable neighbours around there. He drove past today and several houses around it have garbage lying on their front porch/lawn and stuff like that.

Sorry this got so long (cookies to all who made it through the whole thing!), but I'm just wondering what you lovely ladies would do. Would you (unless the house it turns out to be awful when we finally see it) buy a not-ideal-but-good-enough-for-now home because it's a really good deal and then money isn't being pissed away on rent every month? Or would you hold out for a less affordable, more desirable home? Is there something that I'm not taking into account?

Chunstad · November 2012

I'd totally do it if I were you. You gotta start somewhere, even if it is only for a year or two in this starter house. You can always move somewhere else then. Interest rates are crazy low right now, I've seen below 3%. Just think about how awesome it would feel to be making equity instead of paying your landlord.

Good Luck!

babes12 · November 2012

I wouldn't settle, not now in this economy. Moving is a PITA and if you did buy it and got settled then it's hard to pack up and move again. I understand your wanting to have a place to call your own but there's no rush now, wait till you find something you truly love! You don't want to be stuck w/ your house when you want to sell it. Most people don't want only 1 bathroom and i could foresee it being hard to sell.

That's just my opinion so take what you want from it but i believe you should get everything you could possibly want.

Liz4444 · November 2012

If you aren't thinking of this as your forever house, you need to take resale into account. Will you make money off of it? Will you have to sell to afford something new? Desirability of the house? If it's not in that great of a neighborhood and with only 1 bathroom, it seems like it might be difficult.

I would hold out.

sabriel1 · November 2012

crystalbaby:

I wouldn't. If it sounds too good to be true, it probably is. To me, location is maybe more important than the home itself. There is no way that I would want to own a home in a less than desirable neighborhood with trashy neighbors. It might be hard to get out from under it when you're ready to move up from your starter home. I also wouldn't want to buy a house with only one bathroom.

ETA: We don't own yet either. The upsides to paying rent every month is that you're able to leave without any ties when your lease is up and when something in the house breaks, you're not responsible for fixing it. If you buy a house, you can end up just breaking even or even losing money when you go to sell.

This. I should add that you may think this house is "a great deal" but it might not be, if it was it would likely be snapped up by now. The location is probably built into the price.. I know there is no way in heck I'd live in a trashy neighborhood with undesirable neighbors so you potentially could have trouble selling it when it comes time and you want something larger.

I understand the desire to build equity instead of throwing away money in rent however you really have to consider how easy this house will be to sell when the time comes. In addition, there are many more costs to home ownership than renting (3-5% of the home value per year to home maintenance and repairs, home insurance is much pricier than renters insurance, garbage pickup and utlititlies if applicable, snow removal, lawn care, property insurance (which can be ALOT))... there is more to think about than rent vs. mortgage.

My answer would liekly be different if this was your forever home but where you would be looking at resale in the near future I don't know if I'd do it

cantalopes24 · November 2012

I would look into but if I did I wouldn't put more than 20 down.

kagl08 · November 2012

babes12:
I wouldn't settle, not now in this economy. Moving is a PITA and if you did buy it and got settled then it's hard to pack up and move again. I understand your wanting to have a place to call your own but there's no rush now, wait till you find something you truly love! You don't want to be stuck w/ your house when you want to sell it. Most people don't want only 1 bathroom and i could foresee it being hard to sell.

That's just my opinion so take what you want from it but i believe you should get everything you could possibly want.

All of this. And I agree with Lopes too... I wouldn't put down the full 40% down payment either. More like 20% is what I would do too.

nicki731 · November 2012

Going along with what Crystal said -- we have been in our current house 3 years and will be lucky if we break even when we sell. I wish we had waited to buy. If you think resale would work well for you in a few years, then maybe I'd go for it. But I would seriously have to consider the other things you said about the location....

emunbalanced · November 2012

Definitely wait. Location is so so important. We kicked ourselves for buying our first home where we did when we went to sell this summer. Luckily, the property was very unique so we were able to sell quickly, but our neighbors and the school district caused us to lose out on several potential buyers. We were much more selective with the area for the house we just moved into. We know it won't be our forever home, and I don't want to have the worry weighing me down again.

Nita2603 · November 2012

I think I would want to see the house first. If it feels like 'home', then I would do it. I mean, from what I have learned living here, people move every five to 7 years anyways. If it is a nice starter home...go for it.

However....check into the neighbor thing first. I, personally, could live with living in the boonies, in a small house, in a house I don't fall in love with, with long commutes and whatnot....but if the neighbors are bad, you will not get happy there.

I love our house for now. It is cute, it suits us, location works and all.....we have ONE azzhole neighbor. We are not happy. We don't sit on our awesome deck often because they smoke (weed and cigarettes) and are loud. They wake up Alastair at all times of the night. They are rude and awful, there is always garbage flying around because they do not clean up after garbage day etc. it is annoying.

And honestly, if I had known about them, we would have looked a little longer. So check into this, for sure.

And you need to do some soul searching and find out if you can live with the rural area etc. personally, I would love it. But then, I am a country girl.

sharksfan · November 2012

Before we bought our current condo, DH and I were looking at houses as well. If the neighborhood didn't look good, we didn't even look at the house. Your surroundings are very important in setting your overall happiness in your place. If neighbor houses are in terrible condition with trash on the lawn, will you be comfortable letting your LO play outside? I would personally hold out, but I wish you luck if you decide to go for it!

LCass · November 2012

Thanks for the input, ladies. I'm definitely going to talk to our real estate agent/friend about the resale stuff. Just because it's farther out than we'd ideally like doesn't mean it's not a good/popular area, but I'm not sure about that particular street. Neighbours can be an issue anywhere and you don't always know, DH is kind of going off of stereotypes in his assessment. We'll definitely be checking out the other houses as we drive along the street (hopefully we're going to see it tomorrow), though, and seeing if there are any red flags.

The one bathroom is definitely a drawback. After living in our current place, I always said that I wouldn't live in a one bathroom home again. But if the rest of the house is good enough, I could deal with only one bathroom for a few more years. Or we could potentially do some expanding, since it's a pretty small house but a large lot. Our friend (the real estate agent's fiance) is a landlord/property manager and does a lot of renovating, so he can give us some input on what's feasible.

I'm going to wait and see whether we have an instant love/hate reaction to the house before I start doing too much listing of pros and cons. But I really appreciate everyone sharing their thoughts, it helped me get a clearer idea of what I am and am not willing to settle on/for.

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