buy the right house

I’m really glad I listened to the advice found on Zillow and did not buy a house yet.

Interest rates are up, but expected to drop again in the fall. In the meantime, prices continue to drop.

While it’s a bit frustrating to wait, it certainly makes financial sense to do so.

Update as of 9/28/08:
I’ve set aside my plans to purchase a home for the time being. Frankly, the current economic situation is too volatile on a global level. The nationalization of Fannie/Freddie; the failure of several and rumored insolvency of many financial institutions, which appears to challenge the very FDIC itself; the proposed bailout plan that, if passed as written, doesn’t solve the underlying problems …. it’s a very uncertain time. I believe retaining liquidity is the safest course until things settle a bit.

Things aren’t very settled in my personal environment, either. While my job seemed as though it were steady, the company was just acquired by an Indian firm – and there’s no telling what may happen. I may need to move; I may need to find another job – or both. It just makes more sense, end to end, to be liquid and mobile – no matter HOW much I wish I could put down roots into a home again.

We’ve verbally agreed to renew the lease on the rental house until the end of January. This makes fiscal sense, as it gives me more time to pay off credit cards, add to the down payment fund, and build a cash reserve. Plus, house prices are still falling, and I haven’t seen anything that felt like it could be the “just right” house for me. It’s also giving me time to continue the “pare down my volume of STUFF” initiative.

I’ve been working to make this place feel a little less temporary by hanging a few pieces of art; planting a few flowers; doing a bit of container gardening, etc.

It’s helping.

I still want to find my home, though.

I need to have some patience infused. The property manager at our current rental has gone back on the offer we agreed to for the lease renewal – the terms he wants now will cost about $525 extra, over the life of the lease if we agree to renew.

The money isn’t the issue. It’s the changing the agreement bit that’s irking me – that, and the fact that he was snotty about it.

Grrr.

I could go find another rental; I could resume looking for the right next house to purchase… or I could grit my teeth & pay. Right now I’m not sure which way the teeter-totter will fall.

It’s pretty depressing but the simple fact is that housing prices continue to fall, foreclosures keep rising which will create further pressure on pricing, and it would be just plain irresponsible of me to buy right now.

I want my own home. I don’t like renting; I’ve owned for 17 of the last 18 years. But I am going to force myself to wait a minimum of six months – quite possibly longer – as the same $$ will buy me a better place later on.

There are an awful lot of things I want in my next home:

*Reasonably close to restaurants, bookstores, etc. – but quiet & private; no HOA and not too many screaming children nearby
*Minimum of half an acre lot, so there’s room for me to garden
*Roof, HVAC, major core systems < 5 years old or priced low enough that I can afford to update them
*One level living (minimal to no stairs) – between my sprained ankle and recent surgery, this year has proven to me that if I plan to stay in the next house until I’m very old, I’d better pre-plan and not have stairs that lead to essential functional areas like, oh, the laundry, my bedroom, etc.
*Not So Big that I can’t afford to keep it up properly, or that the upkeep significantly cuts into my travel and fun budget
*Updated – or easily updateable – wiring (enough outlets in every room; high speed internet, etc.)

I’m actually considering developing a weighted evaluation / scoring matrix that I could take to each of the houses I go see, when I start looking in first quarter. If I hate the house, no need to do a sheet – but if I like it, having a checklist / scorecard might help me evaluate each of them more objectively.

Met with a financial services specialist at my bank yesterday; and reviewed my three major goals: House, new used car, and a trip to Japan over the next 2 years.

He gave me a recommended plan as well as the tools to execute it easily – so it was very worthwhile. He also ran the numbers for me and showed me that my goal is actually quite feasible, if I take the right steps to get there.

Essentially, we set up a separate, interest bearing account that I can transfer funds into each payday. This keeps the money out of my daily operating account – and makes it far less likely that I’ll spend it on what seems like a good idea at the time but is actually regression on my goals. Once I’ve achieved the house and car, he recommended another type of account that I can sweep money into, for the trip to Japan. W00t!

Yikes. I started poking around with some online calculators, to see what the closing costs and payments would be if I bought in the price range (way, way lower than what the calculators claim I could afford). Added in a reasonable estimate of what it’ll cost to move.

I need to set up a separate account and start dropping in many deposits, or I’ll never be able to meet my internal timeline for this goal. The money I set aside earlier is not even close to enough.

Before I can “buy the right house”, I need to firm up my list of essential vs. nice to have selection criteria.

1. Too big or too small: Thus far, the two homes I’ve owned were too large (4k sq ft) and too small (1.7k sq ft) respectively. Either I rattle, or I’m cramped. Like Goldilocks, I need to find the size that’s right for me. My guesstimate at this point is somewhere very close to 2,000 sq. ft. for the main living space.
2. Too many stairs: honestly, I think I’d prefer a single story – if I can find one that’s well laid out. Seems like most of the single stories around here are 1960 – 1970’s era ranches – long, narrow rectangles with a lot of unusable, poorly laid out rooms. Too many stairs make the simplest of things (unloading the car after a grocery run, doing laundry, etc.) a chore.
3. Wrong area: Both of my last purchased homes were too remote; too deeply into semi-rural suburbia. I don’t want to live right on top of my neighbors, but I don’t want a 30+ minute drive to anything I’d be remotely interested in doing, either.
4. Too hard to upgrade: The first home I bought was on a slab, and all I can say is, Never Again. Adding electric or upgrading plumbing is nigh onto impossible without major expense. Having a basement – or at least a crawl space – makes it easier to access the “guts” of the house for upgrades down the road. Buying too expensive a home means no money for personalizing / upgrades, and buying in too cheap a neighborhood means you’ll never get back any value from the upgrades if you ever do sell. I like DIY projects and personalizing the structure (adding storage; lighting; etc.) – I don’t want it to be too hard to upgrade / personalize the structure.
5. Wrong neighborhood: Now that my child is grown and on her own, I don’t want to live in an area redolent with the shrieks and cries of kiddies. I like to sit outside and read – every shriek and screech feels like nails on a chalkboard. Nor do I want to live like one of my sisters, where burglaries – even in homes with full alarm systems – occur at least twice a year.
6. Too High a Cost for Utilities: My first house – and the rental I’m in now – were inadequately insulated and didn’t have double pane windows. The monthly utilities in these situations are shocking. Last month’s electric bill in this rental was higher than what I paid in the 4k sq ft house – and this place is less than half the size. I can add insulation and replace windows for the next house, if I have to – but I’ll need to factor those expenses in when considering purchase price.
7. Gas for cooking: I hate cooking on an electric range. There’s much less control over the heat and the stovetop is harder to clean. Since I really enjoy cooking, having a gas stove and oven matters a great deal to me.