22

Help! House Fever Is Attacking Us!

in Money Basics, Our Financial Journey, Sell Your 'Stuff'

We are officially under attack!  For the last 6 months, we’ve certainly been on the offensive in our War on Debt.  However, within the last two days, we’ve found ourselves reeling from damage brought on by House Fever!

Here’s a top-secret photo of the primary enemy:

The Enemy!

This might not look like much to some of you, however do not underestimate how powerful this force is!

Reasons Why This House Fever Is So Powerful For Us:

  • It is in our local “dream neighborhood” -  If we had to choose one neighborhood to live in, it would be this one.  The neighborhood is about a 3 minute drive from the interstate, but far enough away not to have any noise.  It is extremely quiet and family-oriented.  On the typical day, you can drive through and see plenty of kids riding bikes, adults walking the dogs, and families shooting hoops and throwing around the football.  Overall, the homes are maintained very well and there are very few foreclosures.
  • It is bank-owned – Comparable homes are easily selling in the mid $200,000′s.  Within the last few years it would have been very reasonable for this home to approach $300,000.  Although it does need cosmetic repairs, it is currently listed at $169,000 by the bank.  A pre-approved offer would surely demand an even bigger concession.
  • Room for sweat equity -  We would be able to put our time and energy into some repairs that could quickly increase the value of the home.  We’d have absolutely no problem living in a partially remodeled home during repairs, even if it took several years.  Because of this, we would want any home we considered buying to be a “fixer-upper.”  At this point in our lives, doing the repairs ourselves would be a valuable use of our time.
  • Has an 70′s feel -  We really do not like 99% of all “new” build homes.  We like a little old-school charm.  This home has several stone walls inside and outside, which we find really attractive.  There are two fireplaces, an open and rounded kitchen, and dark wood and tiles in several parts of the house.  We find this type of style enchanting.
  • $8,000 tax credit -  We’d be first time home buyers and would be able to amend our return to get back an additional $8,000.  I’d be stupid to say this wasn’t a big consideration.  After all, by the time my great-grandchildren have to pay back that money, I’ll be long gone.
  • Lowest Mortgage Rates (maybe in my lifetime?) – If there was ever a time to lock in a 15 year fixed rate, it would be now.  Both Courtney and I have credit scores over 720 (mine’s 750+), so I don’t think we’d have a huge problem getting a fairly low rate.  Waiting a couple years could mean paying a lot more in interest!
  • I’m A Real Estate Agent -  I would either get paid a commission or be able to reduce the purchase price that much further.  In addition, I have several trusted contacts to be able to inspect, appraise, and do any repair work quickly.  In fact, I could write a pre-approved $125,000 offer (close in 7 days) and have it sent out in the next 15 minutes if I really got motivated.  It’s extremely tempting to test the waters!  Speaking of water…

Did I Mention It Was On The Water With A Pool?

On The Water

And There Is Only One Major Drawback…

It stands in direct contrast to every single one of our other financial goals!

Not only would we be in violation of our Declaration of War, it would also be hard to both buy a house and move to Australia.  By hard, I of course mean impossible.  We’ve been sacrificing, saving, and selling all of our possessions to be able to frugally travel over the next year or so.  This has been in the works for a long, long time and is finally within our reach.  Even if it was a match made in heaven, how could we even think of buying a home?

You’re right.  No big deal.  Since we know we aren’t really going to buy, it wouldn’t hurt Courtney and I swung by and took a few harmless pictures, right?  It’ll be easy.  As an agent, I already have access.

DUMB MOVE! Why didn’t any of you stop me?

Courtney After Leaving The “Dream Home”…

Pretty Pleeeeeeeeeeeeeease!

“Can we keep it, pretty pleeeeeeeeeeeeeeeeeease?”

Courtney After Discussion On How It’s Not An Option…

Nothing Left To Say

[Complete Silence]

Yeah, it’s gonna take a couple days to recover from this one…

Have any words of support for us Courtney?  Have any horror stories to share (please keep succesful dream home purchases to yourself)What about super-secret strategies to overcome House Fever?  Help!

{ 19 comments… read them below or add one }

Matt Jabs April 17, 2009 at 8:09 AM

Man…that’s a tough one.

Let this be motivation to you. My wife & I bought after a similar situation 2 years ago. Now we find ourselves wishing we had not bought. We want desperately to get out from under our current home, but will mos likely not be able to do so.

Hope that helps, but it probably doesn’t. Good luck & Godspeed!

Matt Jabs

Matt Jabs’s last blog post..Interest Amount Paid – Establish a Proper Relationship with Your Debt

Reply

Kyle April 17, 2009 at 8:22 AM

I agree that you will probably never see mortgage rates this low again, I never would have thought it possible but I am refinancing at a 4.5% on my mortgage. You have to keep in mind thought that you have set some pretty solid goals on going to Australia, etc.. If you were to pass that up on a whim it may something you would regret for the rest of your life.

Also it looks like those might be Bradford Pears in the front yard, those things are notorious for blowing over in storm… Smash! bye bye house…

It could be that this is the thing for you to do but you need to take at least a week to think it over, let it settle on your mind and mesh with your goals then make a decision.

Reply

kosmo @ The Casual Observer April 17, 2009 at 8:54 AM

I don’t see any kangaroos in the pictures. Australia has kangaroos.

kosmo @ The Casual Observer’s last blog post..Tale of the wolf: Part 2

Reply

Miss M April 17, 2009 at 9:23 AM

Number one it would mean giving up Australia, who knows if you’ll ever have that chance again. Tying yourself down to one house and one place is a big lifestyle change. Then there is my horror story, underwater by $50k-$100k. Houses are work, most people overestimate their desire for DIY. Most people get sick of spending every free hour feeding a beast of a house. But, that is amazingly cheap and has a pool! That’s pretty cool, my underwater shack of a house would still cost you more.

Miss M’s last blog post..Favorite Frugal Dinners

Reply

the weakonomist April 17, 2009 at 9:45 AM

I know that face well! Great looking house, you’ll have to decide what the priority is.

the weakonomist’s last blog post..So You Married Types: Joint or Separate Accounts?

Reply

Wealth Pilgrim April 17, 2009 at 10:54 AM

Dude…..a tough one. I think there is only one approach – do the ol’ Ben Franklin. List your priorities on a piece of paper with a pen (NOT A COMPUTER TYPED DEAL) and discuss. Looks like Courtney has no problem expressing her feelings!!

I agree w/Miss M….you also may never get the chance to live in Aussie land. That also seems like an unbelievable opportunity.

A friend of mine moved to NY City several years ago and had to sell his home to do it. Financially, it was an OK move – but it was a great thing from a LIFE EXPERIENCE perspective. It was the smartest move he could have made.

Something to consider…good luck with it man…

Wealth Pilgrim’s last blog post..The Big Money Secret I Learned As A Trapeze Artist

Reply

Brian April 17, 2009 at 11:33 AM

While I think the house is nice and a great deal, I also think that you would be going against everything that I think you represent. If this was a car it would be a no brainer (and I understand the potential investment that this house represents). I just think that this would not set a good example for someone that follows your philosophy and is new to the war on debt, plus it goes against your teachings and everyone that you follow’s teachings. Also another thing to consider is that “70′s feel” also could mean that 70′s A/C unit, roof, pipes, etc. Also think of all of “things” you need to purchase (that you might have already sold) such as a lawn mower, edger, etc.

And one last thing. I really enjoy reading your blog daily. I have been reading it since day one. With that said I would like for you to read (or possibly re-read) the following:
“After all, by the time my great-grandchildren have to pay back that money, I’ll be long gone. ” That is by far the most dissapointing thing I have read on here to date. So much for building wealth and changing your family tree. Please tell me you were joking.

Reply

Baker April 17, 2009 at 12:02 PM

@ Matt Jabs – Thanks for the story… Another reminder that we never really know where the market is going to go!

@ Kyle – You are exactly right about Australia! And thanks for the heads up on those trees… I had no idea.

@ Kosmo – Haha

@ Miss M – The exact reason we are going to Australia now is so that we won’t take the chance of settling down and never doing it later. Thanks for the reminder and the horror story! I hope things rebound for you.

@ Weakonomist – Wait until you are married! It only gets more and more frequent… ;-)

@ Neal – To us… Life Experience > Throwing Financial Goals Down The Toilet… Appreciate the friendly reminder.

@ Brian – Now this is the type of smack in the face I was searching for! You are 100% right on the downside of the “70′s feel,” as well.

I am flattered you’ve been with me since the beginning and read it daily. It’s really an honor. Rest assured that my comment you quoted was a bad attempt at a political joke. I was referring to the burden all of these tax breaks and government spending were putting on not only on our children, but on their children’s children. Epic Sarcasm Fail!

“Changing your family tree” is one of my favorite personal finance phrases and is our primary goal in our journey! Thanks again for the wake-up call!

Reply

Bible Money Matters April 17, 2009 at 3:03 PM

Keep in mind your other goals, to reduce/eradicate debt, travel, etc. Since you have goals, no matter how good the deal, you aren’t ready! Keep focused on your goals, and don’t get distracted by pretty shiny things in your peripheral vision. :)

Bible Money Matters’s last blog post..Days Like This Make You Realize What Is Important: It Isn’t Your Possessions

Reply

MoneyEnergy April 17, 2009 at 3:05 PM

Aww, I know how that feels… that’s really tough… it’s the water in the back that would get me. And those white trees out front. Too bad you couldn’t buy and hold while you’re in Australia. Hope you get over it ok:)

MoneyEnergy’s last blog post..What’s Wrong With the US Economy

Reply

JoeTaxpayer April 17, 2009 at 3:09 PM

Why are you so against the purchase? It seems pretty ideal. Location, site of property (the pool and water), etc. The chance to put in money a bit at a time, along with your own work, if you enjoy this, you might find you are in a $200K house with an under $100K mortgage in a few years. Gotta flip the switch sometime. Of course, I don’t know the rest of your situation. How ’bout I buy it and rent it to you? That should keep the smile going. (kidding, I got out of most of my rental property at the last bottom!)

JoeTaxpayer’s last blog post..Kill the 401(k)?

Reply

Atlas@mymoneyshrugged April 17, 2009 at 3:26 PM

Great post! epically for someone like me who is also looking to purchase a home for myself this year but am scared to death about it. I don’t know why but I am just scared, having equity is a very good investment for our future. But all I hear from people is that houses come with more than just the price, things come up and its more money out of pocket than you think and this is why I am scared. Being debt free is like have the weight of an elephant off your chest as well.

With that being said, seems like it might be great purchase, and it seem like its really up to what your future goals and what the long term plan(s) is for you guys. Sorry this doesn’t help but good luck and look forward to hearing more!

Atlas@mymoneyshrugged’s last blog post..Robin Hood, the Foulest of Creatures?

Reply

ObliviousInvestor April 17, 2009 at 8:26 PM

Wow man. It’s on the water! (Here in Chicago, 170k gets a 2BR condo with a view of a brick wall.)

(Sorry, I know that’s not helping.)

I think Wealth Pilgrim’s suggestion is excellent. Write out your priorities on paper. Go from there.

And remember, if you decide not to buy it, other houses will come up. (Maybe not quite like this one for quite the same price, but still.) If you decide to buy it, that’s pretty much that. No changing your mind later.

ObliviousInvestor’s last blog post..Weekend Reading 4/17/09

Reply

Rachel April 17, 2009 at 8:30 PM

Hi Adam, that house looks fabulous – and it is on the water?!

As an Australian, I’ve gotta tell you that I nearly fell over in shock when you said the price. Houses over here are *expensive*. Yes I love Australia, (we’re over in the west), we have a fabulous lifestyle – and yep, kangaroos(!) but wow that house looks like a bargain!

I do have a friend who has moved over from small town USA and now loves it here in Perth (our city has a pop of 1.5 million-ish) but she still freaks out at prices here sometimes.

I’m not sure what rental income etc is like over there in the states vs mortgage repayments but is it an option to buy, live in it, then rent it out if you decide to come down under?

Rachel’s last blog post..Why supermarkets will cook up your soul and serve it with frozen peas and packet gravy

Reply

Kelly April 17, 2009 at 9:32 PM

If I could’ve stopped you I would have!
But really, take the time to really look at your priorities and see what makes sense for both of you. :)
There is no right answer, just make sure you don’t regret your decisions.

Kelly’s last blog post..What would you do with a $1,000,000?

Reply

Trevor @ Financial Nut April 17, 2009 at 10:14 PM

LOL. Honestly, Baker, I think you convinced ME to buy the house! Where is it?! I want it! :)

Trevor @ Financial Nut’s last blog post..A Comprehensive Guide To Understanding The Pros & Cons Of Investing Into A Roth IRA

Reply

MB April 18, 2009 at 10:20 PM

I used to live in Australia. And life in Australia is WAY cooler than that house, though that house is pretty good. Australia is simply better. ‘Nuff said.

Reply

Baker April 19, 2009 at 7:45 AM

@ BMM – Peter, thanks for stopping by!
@ MoneyEnergy – Yeah, the water is tempting. We are not in the position to buy and hold, though.
@ JoeTaxPayer – Welcome to the blog, thanks for stopping in. We are against the purchase because it goes against every other goal we have. Check out the links in the About page for more info.
@ Atlas – We keep reminding ourselves of all the costs of maintaining a home like this!
@ObliviousInvestor – Laughing at the thought of sitting in a condo staring at a brick wall…
@Rachel – It’s not really an option for us to rent it out. First, we aren’t in a position to be investors. Second, we leave in 7 weeks, which wouldn’t be enough time to close and get needed repairs done!
@Kelly- Thank Kelly, next time I’ll let you know ahead of time!
@Trevor – Not helping!
@MB – The bottom line is we will never know how COOL Australia is if we never go! I hope you’re right!

Reply

Do You Dave Ramsey? May 2, 2009 at 11:37 PM

In the second pic it looks like she’s trying to figure out how to leave your ass in Austrailia so she can come back and buy that house.

I’d watch my back if I were you brother!

Dave

Do You Dave Ramsey?’s last blog post..Goal Setting – Series Conclusion (part 10)

Reply

Leave a Comment

{ 3 trackbacks }