Sunday, May 08, 2005
Taking The Plunge
So, we're doing it. We're buying a house. I know the phrase "taking the plunge" is usually referred to getting married, but if you read my blog, then you already know we're doing that. And, honestly, this feels a bit more scary, even though I won't own this house for the rest of my life, I KNOW I want to marry Sam. Unless she somehow snaps and tries to kill me, I don't see it really being that much of a risk. And while I'm pretty darn confident that this house is going to turn out well (if I wasn't, I wouldn't be doing it, duh.), it's still hundreds of thousands of dollars we're talking about.
It really was quite a whirlwind experience. I didn't expect we'd have a house until July, because our lease is up in August. But we found something we liked, and in this market you just have to go for it, so we did. When we wrote our offer, we wanted it to be competitive, which these days basically means doing whatever the sellers might conceivably want. We didn't want to get the house without an inspection though, so we did a "pre-offer inspection", where we had an inspection done before actually submitting the offer. That was on Tuesday and went very smoothly. We submitted the offer with an "escalation clause", which basically functions like a bid on eBay does - it says that you're willing to go up to a certain amount, but only to beat another offer. We also wrote a cutesy little note telling the owners how excited we were at the prospect of starting out family in the house. Sounds like crap, eh? Well, it worked.
That afternoon, our realtor (Shelley, who has been fabulous), called me at work and said that there was one other competitive offer on the house, from someone who had beat our offer by $13,000, and was willing to put 25% down. (We were putting 5% down.) But, because the owners liked us, and knew that we had a good lender, they were willing to go with us if we upped our offer by $3,000. So, after a bit of thought, we did, and got the house. It was pretty exciting. We went from searching all day on Sunday to having our offer accepted on Tuesday. I still don't think it's completely sunk in that we're going to be homeowners. I feel so grown up! (Don't worry; I'll still make stupid jokes.)
Despite Shear's comments on my previous post, I do think it'll be a good investment. Yes, it's a risk. Yes, rates could skyrocket. But honestly, it's not that aspect I'm concerned about. As I told Shear, even if you could guarantee me that the price was going to go down 10-20% in the next few years, we'd probably still go for it. The timing's right, the house is nice, and we're not buying it because it's a good investment. (Although, it would be nice if it was.) And while it's true that in a few years, it's possible (likely? no one knows.) that the market will fall, and we will end up having overpaid for our house, as long as we can afford it now, we're ok. If our house loses value, I won't be too concerned, because I'd really only use the equity to buy another house. In fact, it's kind of interesting what's driving the market: Apparently, because of skyrocketing prices, people can't afford to move from their "starter homes" to their second homes, so they're just staying put and doing renovations. Because of that, there are fewer starter homes on the market, and therefore the prices on those just keep going up. My guess is that if the market slows, it'll be on those second homes, but what do I know? At any rate, there's some interesting information on it all here.
So, why am I nervous? Well, it's just a big deal. I've never owned a home before, and while I don't consider myself that handy, I do know how to read. But I don't know anything about water heaters and landscaping and drainage and roofing and all sorts of other crap. I won't mind learning, but it's going to be time-consuming at the least. And if I screw it up, it's not like I'm just going to move out - I'll permanently damage my home! In today's market, that'll be like $50K if I break a faucet!
There's the time factor, but there's also the money factor. We're actually choosing this house because it's pretty live-able already - all of the changes we'd want to make are either aesthetic (and not the absolutely necessary aesthetic ones, like if we had to cope with orange and green wallpaper), or "nice-to-haves". For instance, we'd really like to put a deck on the back, and an island in the center of the kitchen, and recessed lighting in the basement. But that's going to add up too. And that's not even counting all of the new furniture we're going to need just to fill up the place.
I guess I'm intimidated by all the potential there. We're buying what I think is a very nice house, and I want to make sure that we decorate it in a manner that's appropriate to the quality of the house. It may sound like a silly concern, but it's important to me that the house looks nice and clean and inviting. Sam and I basically own a collection of hand-me-down furniture and random items. We've never had to make rooms go together, and so that's going to be an interesting project for us. I guess we'll likely be making a lot of IKEA and Home Depot trips, although I'm betting that can get pretty expensive very quickly. Still, it should be fun to work on.
At any rate, I'm excited and apprehensive all at the same time. We're closing in a month, and since our landlords are being nice enough to let us out of the lease as soon as they find a replacement for us, I'm betting that we're going to move very shortly after that. And if you think my blogging's becoming infrequent now, just wait until I'm spending every weekend spreading mulch around our azaleas.
It really was quite a whirlwind experience. I didn't expect we'd have a house until July, because our lease is up in August. But we found something we liked, and in this market you just have to go for it, so we did. When we wrote our offer, we wanted it to be competitive, which these days basically means doing whatever the sellers might conceivably want. We didn't want to get the house without an inspection though, so we did a "pre-offer inspection", where we had an inspection done before actually submitting the offer. That was on Tuesday and went very smoothly. We submitted the offer with an "escalation clause", which basically functions like a bid on eBay does - it says that you're willing to go up to a certain amount, but only to beat another offer. We also wrote a cutesy little note telling the owners how excited we were at the prospect of starting out family in the house. Sounds like crap, eh? Well, it worked.
That afternoon, our realtor (Shelley, who has been fabulous), called me at work and said that there was one other competitive offer on the house, from someone who had beat our offer by $13,000, and was willing to put 25% down. (We were putting 5% down.) But, because the owners liked us, and knew that we had a good lender, they were willing to go with us if we upped our offer by $3,000. So, after a bit of thought, we did, and got the house. It was pretty exciting. We went from searching all day on Sunday to having our offer accepted on Tuesday. I still don't think it's completely sunk in that we're going to be homeowners. I feel so grown up! (Don't worry; I'll still make stupid jokes.)
Despite Shear's comments on my previous post, I do think it'll be a good investment. Yes, it's a risk. Yes, rates could skyrocket. But honestly, it's not that aspect I'm concerned about. As I told Shear, even if you could guarantee me that the price was going to go down 10-20% in the next few years, we'd probably still go for it. The timing's right, the house is nice, and we're not buying it because it's a good investment. (Although, it would be nice if it was.) And while it's true that in a few years, it's possible (likely? no one knows.) that the market will fall, and we will end up having overpaid for our house, as long as we can afford it now, we're ok. If our house loses value, I won't be too concerned, because I'd really only use the equity to buy another house. In fact, it's kind of interesting what's driving the market: Apparently, because of skyrocketing prices, people can't afford to move from their "starter homes" to their second homes, so they're just staying put and doing renovations. Because of that, there are fewer starter homes on the market, and therefore the prices on those just keep going up. My guess is that if the market slows, it'll be on those second homes, but what do I know? At any rate, there's some interesting information on it all here.
So, why am I nervous? Well, it's just a big deal. I've never owned a home before, and while I don't consider myself that handy, I do know how to read. But I don't know anything about water heaters and landscaping and drainage and roofing and all sorts of other crap. I won't mind learning, but it's going to be time-consuming at the least. And if I screw it up, it's not like I'm just going to move out - I'll permanently damage my home! In today's market, that'll be like $50K if I break a faucet!
There's the time factor, but there's also the money factor. We're actually choosing this house because it's pretty live-able already - all of the changes we'd want to make are either aesthetic (and not the absolutely necessary aesthetic ones, like if we had to cope with orange and green wallpaper), or "nice-to-haves". For instance, we'd really like to put a deck on the back, and an island in the center of the kitchen, and recessed lighting in the basement. But that's going to add up too. And that's not even counting all of the new furniture we're going to need just to fill up the place.
I guess I'm intimidated by all the potential there. We're buying what I think is a very nice house, and I want to make sure that we decorate it in a manner that's appropriate to the quality of the house. It may sound like a silly concern, but it's important to me that the house looks nice and clean and inviting. Sam and I basically own a collection of hand-me-down furniture and random items. We've never had to make rooms go together, and so that's going to be an interesting project for us. I guess we'll likely be making a lot of IKEA and Home Depot trips, although I'm betting that can get pretty expensive very quickly. Still, it should be fun to work on.
At any rate, I'm excited and apprehensive all at the same time. We're closing in a month, and since our landlords are being nice enough to let us out of the lease as soon as they find a replacement for us, I'm betting that we're going to move very shortly after that. And if you think my blogging's becoming infrequent now, just wait until I'm spending every weekend spreading mulch around our azaleas.
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