Friday, July 30, 2010

how to buy a house: part iv

Yesterday, we made our first offer on a house (House A) for 27% below the list price.

The owner's came back today and dropped the price by 14%.

Our first counter-offer was for 3% more.

There is currently 10% separating us.

We estimate that tomorrow, they're going to come back and suggest that we split the difference, so that we each take a 5% hit. Tonight, Charlie and I created our most elaborate spreadsheet yet scrutinizing the numbers. What we've determined is that House A needs approximately 25% of the value (assuming we meet them half way) in repairs and upgrades.

All of those things do not need to be done right away, but we've got in mind what we want our home to be like and although the renovations might not happen immediately, very soon, they'll definitely be necessary.

Now. Approximately three miles away (and approximately three miles further from work), we have found another house (House B). The listing price is similar to the original listing price on House A. However, the listing price on House B has actually dropped 12% from what it was listed at approximately two months ago. It is located on a similarly sized plot of land, in a similarly nice neighbor, in the same exact school district, and has the same number of bedroooms and a half bathroom extra. The closets and bathrooms look like they are CONSIDERABLY larger and actually have double vanities, which would be especially useful for our masses of children. House B also has a study and a beautiful screened in porch, both of which are lacking at House A.

House A does have a beautiful creek. But when we were there the other day, as much as the children loved it - they were EATEN ALIVE by mosquitoes. Elizabeth had so many bites it looked like she had the chicken pox, and William had one bite on his forehead that was so huge it could have had it's own zip code.

Although the kitchen and bathrooms are somewhat dated in House B, the house is 20 years younger than House A, which means that it isn't quite as pressing to have updates completed. House B is also approximately 1,700 square feet larger than House A.

What that means is that OUR ENTIRE California house (plus another 100 square feet) could fit in the difference in sizes between House A and House B.

(Excuse me for a minute while I calculate how long it will take me to vacuum.)

(I think I'll need to bring a snack and wear a Camelbak.)

(Or, get a Roomba with a solar battery pack.)

We estimate that our mortgage payment would be approximately the same for the two houses, because although House B is more expensive than House A, our loan amount for House A would be approximately the same as House B so that we would have money for upgrades and repairs.

The question is: do we buy the smaller sized House A that requires a lot of work, but when that work is done the house will hopefully be beautiful? And do we even know what we are getting in to - buying a house that NEEDS so much done?

Or, do we buy the larger House B that won't necessarily be as nice as House A (once we get all the upgrades completed) but is more "move in" ready? And how much will those additional three miles, per way, driving to the office effect me everyday? What exactly is my tolerance for commuting an additional 1,440 miles per year?

Tomorrow, we're going to look at House B, again. And then we're going to smother the children in deet and go "kick the tires" on House A to make sure it's as great as we think it is especially since it's being sold 'as-is.'

And then, I have no idea what will happen.

I'm just preparing myself that at this rate, we very well might be cooking our Thanksgiving dinner on our itty bitty hotel stove.

29 comments:

  1. Or you'll be cooking Thanksgiving dinner in your itty bitty oven in House A. :)

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  2. That's tough. To totally simplify it, I'd go for the smaller house. You don't want to spend your whole life cleaning. Altho during the long winters you might be glad for the extra space--you know, to hide in, lol. Ok, I guess that wasn't simple. I'd go with the house that gives me the best vibes.
    I have really been enjoying following your journey. Your pictures on twitter make me nostalgic for the two years I lived in Arlington.

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  3. I'm for house B--just thinking of all that extra room and how nice that will be with your kids, especially since the winters will necessitate you keeping them inside more than in Cal.

    I'm a sucker for extra rooms, nooks and crannies, etc, so house B appealed to me just hearing your description of it.

    ...and the screened in porch would be a deal breaker for me!!

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  4. Wow! You went from no decent options to 2 great options. That is awesome!

    We have three girls, and I have to say that I love, Love, LOVE having double sinks in the bathroom. I, personally, would probably go for the newer house. My husband is a plumber, and it's amazing the kinds of upgrades that old houses need. Weird, random things go wrong that the owners never planned on, and they can get expensive. That being said, you have to check them both out and listen to your heart. Look around and try to decide which one feels like home to you.

    Best of luck!

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  5. Wow - can't wait to see how this story ends. I will say that I love that we don't really have mosquitoes in SoCal. We go to Canada every summer and they eat me alive! No matter what, though, you have two good choices.

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  6. A screened porch is a necessity

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  7. House B.

    SERIOUSLY.

    I know you love House A, but you are talking about the kind of work you can actually see- you'll find more work to be done on the inspection, and a WHOLE lot more once you start pulling stuff apart and working on things, stuff no inspector could possibly find.

    House B. Please. Learn from our family's mistakes.

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  8. From your description, I would buy House B. I'm not crazy about the creek thing -- seems like more of a liability than an advantage, esp. with all those mosquitos!!! Wish I could see pictures of both.....

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  9. It sounds like you have become emotionally attached to House A before learning exactly what the downsides are... I know that you said that youwill be getting an inspector-- I would suggest doing that SOON... that may make up your mind for you, sooner.

    More space will be a delight as the kids get bigger and older and want more space.

    Good luck! It is nice to have choices!

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  10. It sounds like you have become emotionally attached to House A before learning exactly what the downsides are... I know that you said that youwill be getting an inspector-- I would suggest doing that SOON... that may make up your mind for you, sooner.

    More space will be a delight as the kids get bigger and older and want more space.

    Good luck! It is nice to have choices!

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  11. I would go with the house you feel you would be happy with for a long period of time. If House A is one you see yourself in for 20 years then that one. From what I know of you (not much) from your blog, you don't like change and would rather be in a house that you love even though it was a lot of work and never move again. :-)

    Carolyn

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  12. One thing I will say is that when buying an old house that obviously needs repairs, you can probably bet on their being MORE repairs than you bargained for. The house my parents bought was old, and though my dad is handy, he has spent the last 25 years fixing it. And it STILL needs work in places. I mean, upkeep on any house is always going to present itself, but I've noticed that with older homes, you usually find bigger problems while in the midst of fixing the obvious ones. For example, how do you know that when you go to upgrade the bathrooms that you aren't going to end up needing to redo all of the plumbing, and replace floors that have years of water damage and mold you couldn't even see. So just be wary!

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  13. 'Avons Skin-So-Soft Bath Oil' really does work for keeping mosquitos and noseeums away, it smells better and it is not poisonous. If I were you I would take house B for the space because when your youngsters are teenagers you will find that they take up a lot of room and that does not even consider the friends they will bring home to eat you out of it. P.S. I’ve been enjoying your journey to a new home!

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  14. 'Avons Skin-So-Soft Bath Oil’ Use the green label not any of the new ones. The new ones do not repel the critters!

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  15. So......house B is newer, larger in square footage, larger in closet space, more bathrooms. It has about the same size lot, same school district. And.........about the same price. There wouldn't be a question in my mind....(and 3 miles is nothing)

    If house B has already gone down in price, I would say there is still more room for movement.....

    The one thing that might tell the tale for both houses is an inspection!

    Good luck.....

    Kay

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  16. My husband and I nearly divorced when we bought our first home - it needed some work. And we didn't even have kids at that point! Based on that alone, I'm voting for house b! Remodeling is exhausting!!!

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  17. It depends on what type of road the extra three miles are - is it local, neighborhood roads or is it a major thoroughfare or something in between. In this area, 3 miles can add a few minutes or 30 minutes to a commute. Also, keep in mind you are looking in late July/early August - traffic around here is worse when Congress is in session and during the school year.

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  18. I vote for House B. The extra bathroom sold me!

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  19. House B. I wouldn't buy a house on a "crick" - - for safety reasons, for mosquito reasons and other...ummmm....critter reasons. 3 miles is peanuts. If the house looks as bad as you say, trust me there are underlying problems as well. Being sold "as is" tells you ALL you need to know in that respect.

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  20. Bid on House B....three miles is nothing in the grand scheme of things. House repairs are HUGE in the grand scheme of things; so is a screened-in porch :)

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  21. Michelle- CA7/31/10, 4:19 PM

    I would go for House B based on just what you have said. You absolutely never know exactly how much upgrades and remodeling will cost. I have done considerable remodeling on my 2 houses I have owned and each went way over budget and estimates. There is always things that need to be done, fixed etc that you just don't know about until you begin remodeling. Some of them are minor and some are not and have to be done no matter what. Remodeling a house that old can be like opening a can of worms, not to mention what the town/city codes are now versus when the house was built that you will have to upgrade and deal with.

    More square feet is always a good thing no matter how much more cleaning you have to do. We doubled our house size this last move and I do all the cleaning myself. It is alot of work but I still would not trade the square footage. We are not busting out at the seems and everything has it place and there is no clutter anywhere. We can live hear until our kids are grown and then sell and live comfortably still in a smaller house for the 2 of us with all the clutter gone.

    Maybe you can take pictures of the houses and post them and have everyone give you their votes?

    Good luck. Buying a house is sooooo stressful. I was never so stressed in my entire life both times we did it. And to top it off our current buy was a short sale so we were dealing with banks and their demands.

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  22. Gee. This is another question where the two of you have subconsciously already made up your mind.

    So what you are asking is. Do I drive an extra 6 miles a day so that our family have extra room and two parents who can go about spending time with their fab family. Or do you cut down the drive by xxx minutes a day and spend the weekends.

    Also, if Henry has a way of escaping the yard, that creek will terrify you.

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  23. After going through a renovation with my sister's fixer upper for years now and then it losing value with the economy I would say run - don't walk from house A. That's just me. It sounds like you really love house A but the 'as is' is scary. My sister ended up replacing the roof, electrical, plumbing, complete kitchen, some floors, painting miles of walls, taking out walls, putting in walls, replacing the driveway, repairing the pool, taking out trees.... I'm tired just typing it! She still hasn't touched the 3 bathrooms yet. I guess I'm just thinking that whatever you think it may cost - add more - and then more! Hers was built in about 1950 and has really solid bones - not sure where yours stands on that.

    Even though I don't know you or your family, I'm so happy for you and your new adventures. Thanks for taking 'us' on the ride with you!

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  24. You had me as conflicted as you until the "as is" part of the post. I am leery of older houses that sell that way. What is something big shows up in the home inspection? I think at this point you need to think of House A as an older car you have a big repair bill estimate for. How much are you willing to pay to get it now and knowing that more will be needed in the future?
    I cannot tell you the answer, only you and Charlie know what you can handle (emotionally and financially).
    Kathy

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  25. Decisions like that make me crazy. You can see good sides to either alternative and bad sides to either alternative.

    Have you thought of playing darts and which ever house the darts land closest to you buy? LOL

    Good luck whichever way you choose.

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  26. I can only tell you one thing: I do NOT think it's possible to get rid of the mosquitos at house A. The property might be nice, but your kids will not be able to enjoy it starting at around 5-6 pm... And if you even leave the doors cracked open on your way in/ out, the mosquitos will come inside...

    This is the toughest stage. But you will survive and make the right decision - the right one for YOUR family. Best of luck!

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  27. 3 miles can make a HUGE difference in commute in that area of town. Especially when it snows, the weather is bad and the roads are icy. Seriously you might as chosen a home an hour away...
    The mosquitoes are horrible in VA. San Diego bugs are way easier. By the way, be sure to do a surgical cleaning of the closets and pantry. You'll see bugs you never knew existed and crazy things will be eating your stuff...not just food, clothing too.
    Would totally pay the price to have a shorter commute.

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  28. The extra space would be nice with four children and I'm not sure the extra 6 miles per day will really matter all that much. Just my two cents....

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  29. You are helping me decide to be a renter for life! haha

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