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Author: ChocoKitty Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 5805  
Subject: Found the perfect home, torn Date: 8/7/2002 8:48 AM
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Well, after months of looking around for a new home, I found it. The perfect home for me. And, as usual, I'm hesitating.

Here are the pros and cons:

Pros:
- I *love* this place. It's new construction, and I saw it without the drywall up. Just studs. It still feels...right. And because it's new construction, I can have more control over how it's built at the start.
- Location is perfect, for me and for resale purposes (e.g., it's on the border of a sky-high tax town with fabulous schools -- the school district is in the high tax town, but the taxes I would pay are the lower taxes of the town that the home is actually in)
- The layout is exactly what I've been looking for (open plan)
- I'm so picky that I doubt I'll find a place like this again.
- 1.5 miles from work, and it's a lovely walk. Right now I have to drive 30 minutes each way.
- I like my current job a lot, so I feel less desperate to RE (I can see myself cutting back to 3-4 days a week and still enjoying it).

Cons:
- It's more expensive than my current place (about 1.5X my salary instead of 1X my salary. Yeah, I know, I'm more of a tightwad than most).
- I'm afraid it will mess up my FIRE plans (I'll more likely be saving 20-25% of my gross instead of 35-40%+ of my gross if I buy this place)
- I don't feel like I deserve it (issues there....)

Other background: I have virtually NO furniture (I never liked my current place, so I haven't even bothered to buy a couch) and no debt except for the mortgage. But I've gotten to the point where I'm a bit tired of waiting for later to live. I once loved home design and architecture and fashion and all those things that many people consider "shallow". And now I'm wondering whether I got a bit too zealous in my savings as I tried to be "LBYM-er than thou" (*grin*) and tell myself that where I live doesn't matter to me when in reality, it DOES. No, I'm not trying to impress anyone (I rarely entertain, so this home would be purely for me).

Yes, I'm sure you can tell the answer I want. But I wonder if anyone can offer more insights into what I should think about before deciding to buy this home or not. Thanks.

CK
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Author: ResNullius Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 482 of 5805
Subject: Re: Found the perfect home, torn Date: 8/7/2002 9:06 AM
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Buy it, if you really like, and it sure sounds like you do. During the course of the adult side of my 52 years, I've almost always been far too conservative in my major acquisitions, often settling for something less than what I really wanted. Big mistake. Just get it right the first time and you'll save money over the long haul, plus you'll get greater enjoyment during the short haul and the long haul. Just some thoughts for Wednesday morning.

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Author: brewer12345 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 483 of 5805
Subject: Re: Found the perfect home, torn Date: 8/7/2002 9:43 AM
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Given the modest price relative to your salary, I wouldn't worry too much about the expenditure if you are really taken by the place. There is a lot to be said for actually living.

We recently decided to take the plunge after living in our condo for almost 4 years. We are escaping NYC (as far as home goes; I don't really have a choice about work right now) and actually buying a house. Yes, it will be more expensive in mortgage, taxes, commuting costs and upkeep. However, we really like the area, we love the neighborhood, and we love the house we are buying. When we finally finish moving, selling the d@mned condo (our buyer just flaked out on us), and redecorating (the current scheme has to be seen to be believed; watch for before and after pics in a few months), my stress level will be considerably diminished. A plus will be that hopping the state border will make it far easier for my wife to pursue a slow lane approach to her field, since NJ has a more favorable regulatory and licensure environment.

If the place fits you so well, go for it. Just be careful in dealing with a builder that hasn't finished the house yet (heard plenty of horror stories).

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Author: DuckInMyShorts Big funky green star, 20000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 484 of 5805
Subject: Re: Found the perfect home, torn Date: 8/7/2002 10:09 AM
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Hopefully ChocoKitty will read the whole thread.

Just be careful in dealing with a builder that hasn't finished the house yet (heard plenty of horror stories).

Go to "Buying/Financing a Home board", "Building/Maintaining a Home board", and LBYM and search for my "BUILDER FROM HELL" series. Now, all of these stories are pretty much, "don't do what we did, be careful and do it right". That is, I'm not telling you how to do it right, I'm telling you what went wrong and what we're learning to avoid in the process of new construction. We're making lots of mistakes along the way, dealing with an unlicensed builder and a former felon.

Duck!


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Author: ChocoKitty Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 485 of 5805
Subject: Re: Found the perfect home, torn Date: 8/7/2002 10:14 AM
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Thank you so much for the heads-up on dealing with new construction. The home I'm eyeing is a condo, and the builder and developer have other (finished) sites that I'll be checking out and researching. I'll look for your stories too!

CK

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Author: SeattlePioneer Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 486 of 5805
Subject: Re: Found the perfect home, torn Date: 8/7/2002 12:03 PM
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<<Other background: I have virtually NO furniture (I never liked my current place, so I haven't even bothered to buy a couch) and no debt except for the mortgage. But I've gotten to the point where I'm a bit tired of waiting for later to live. I once loved home design and architecture and fashion and all those things that many people consider "shallow". And now I'm wondering whether I got a bit too zealous in my savings as I tried to be "LBYM-er than thou" (*grin*) and tell myself that where I live doesn't matter to me when in reality, it DOES. No, I'm not trying to impress anyone (I rarely entertain, so this home would be purely for me).

Yes, I'm sure you can tell the answer I want. But I wonder if anyone can offer more insights into what I should think about before deciding to buy this home or not. Thanks.

CK >>



Ahhhh.... the classic savings vs consumption decision.


That's one you can only make yourself.

I'd argue that "financial security" is a need. You should have emergency funds and savings to cover the unexpected emergencies and problems that might happen to us.


But saving for early retirement is a luxury, just like the house you describe. There is nothing wrong with working, although you should realize that by buying this place you reduce your ability to do other things.


I can tell you that at age 52, I am MUCH less interested in working than I was ten or twenty years ago. The freedom to be able to work less or quit altogether is a luxury I value. You should consider whether the work you find interesting now will be a burdensome and blight your life in the future.


Have you considered how much more this house will really cost you to buy, in additional taxes, furnishings and lost investment opportunities? If it's really worthwhile, then do it.


Of course, you have to turn in your MOOTFL pass, since you'll be doing a lot of working for the forseeable future!


Good luck with your decision.



Seattle Pioneer



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Author: ChocoKitty Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 488 of 5805
Subject: Re: Found the perfect home, torn Date: 8/7/2002 12:46 PM
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I can tell you that at age 52, I am MUCH less interested in working than I was ten or twenty years ago. The freedom to be able to work less or quit altogether is a luxury I value. You should consider whether the work you find interesting now will be a burdensome and blight your life in the future.

Have you considered how much more this house will really cost you to buy, in additional taxes, furnishings and lost investment opportunities? If it's really worthwhile, then do it.


All good points SP. I'm pretty realistic about my job and what it can/can't give me, so I think I'm all set with that analysis.

As far as furnishings are concerned, if I buy *anything* it will be considered more than I spend now. Like I said, I have no couch. My dining room set was a garage sale find. And I have a computer table, chair, 2 bookcases, a bed and a nightstand. That is all the furniture I own. I hate living this way.

I'm now in the process of number crunching to see how much more this new home will really cost in terms of lost opportunities. But cutting the commute (or allowing my commute to double as my daily exercise) also buys time for me NOW. So I'm still weighing the trade-offs. It may end up being a net GAIN once all is said and done!

Still calculating....

CK

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Author: brewer12345 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 489 of 5805
Subject: Re: Found the perfect home, torn Date: 8/7/2002 2:10 PM
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Still calculating....

CK

**************

Remember that there is more than dollars and cents at stake here while you do your calculating. Frankly, I'm just about at the point where having a little more time for non-work/school/investing/chores would be worth a significant sum.

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Author: jtmitch Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 490 of 5805
Subject: Re: Found the perfect home, torn Date: 8/7/2002 2:16 PM
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As far as furnishings are concerned, if I buy *anything* it will be considered more
than I spend now. Like I said, I have no couch. My dining room set was a garage
sale find. And I have a computer table, chair, 2 bookcases, a bed and a nightstand.
That is all the furniture I own. I hate living this way.


I'm not sure if you are referring to your current abode, just the furnishings or the whole enchilada, but I think the latter statement is telling. If you hate the way you're living now and buying a new place (which you can obviously afford since it costs a relatively small multiple of your income and will still allow you to invest substantially for the future) will make you happy, what is the issue? After all, you seem to have successfully improved a bad work situation by making a change. If you hate your living situation, why not improve it as well? At a minimum, buy a couch, flop down on it and relax. <grin>

jtmitch

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Author: jjbklb Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 491 of 5805
Subject: Re: Found the perfect home, torn Date: 8/7/2002 4:29 PM
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I was in the same spot 4 years ago. A realtor was showing me a home in a nice area jusst outside the city. I was standing in the front lawn looking around.I noticed an empty piece of land bordering a golf course.
There was no sale sign on it but I asked the realtor to look into it. The plot was more expensive then what I had planned on,but I fell in love with the view. I had our dream home built & didn't look back. I tried to keep a close eye on the construction. I asked for a key to check the inside as it neared the final stages. I went in one sunday night.The builders crew was last in friday.Apparantely a large bird got trapped in the house when thay left.You would not believe the amount of bird crap that could be deposited on the new rugs & walls in 48 hours.I got the bird out & the builder had to spent quite an amount of time shampooing the carpets & repainting.

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Author: waterwiz Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 492 of 5805
Subject: Re: Found the perfect home, torn Date: 8/7/2002 9:57 PM
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- I don't feel like I deserve it (issues there....)

You need to address these issues. There's no reason you shouldn't have a nice, comfortable home that makes you happy and brings you pleasure. I know from personal experience that living in a residence you hate affects your entire life. Right now your life is only half acceptable--you have a job you enjoy, but not a home. Why not make it completely enjoyable?

Here's another way to look at it: suppose you do cut back to 3 or 4 days per week. If you're like me, you'll be spending a great deal of that time at home. Where would you rather be spending that extra time--in the new condo you love, or in the current condo you hate?

Ellen

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Author: CindyC72 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 494 of 5805
Subject: Re: Found the perfect home, torn Date: 8/7/2002 11:11 PM
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But I wonder if anyone can offer more insights into what I should think about before deciding to buy this home or not.

1. Will the 1.5X vs 1X salary end up making things tight for you month to month?

2. Will the various expenses of buying/moving put you in a bad situation should you find yourself unexpectedly unemployed?

3. Are you going to enjoy it?

4. Do you promise to take a good, long time before filling it up with furniture? ;)

I think it sounds great and is something that you'll really enjoy.

Cindy

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Author: nnn12345 Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 496 of 5805
Subject: Re: Found the perfect home, torn Date: 8/8/2002 1:56 PM
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BUY IT!!!!

Life is lived in the present, you will really enjoy this home which will add to your quality of life, and the cost is modest relative to your salary.

You will save 1 hour of commuting time a day, which if you value the time and you should, in itself is a huge advantage in favor of buying it.

In addition, a nice well located piece of real estate as you describe is more than likely to increase in value at or possibly greater than the rate of inflation, which makes this an investment as well.

I doubt you will regret buying it. You can always sell it if you need to, possibly at a profit. You may have regrets if you don't buy it.

Just buy it. And enjoy.

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Author: michaelangela Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 497 of 5805
Subject: Re: Found the perfect home, torn Date: 8/8/2002 5:27 PM
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Yes, I'm sure you can tell the answer I want.

Well, I'm going to give you the other answer deliberately, just 'cuz I think someone oughtta.

The question is not whether or not you'll ever have a nice home, it's, "How important is it to have this nice home now?"

Just a couple "devil's advocate" thoughts to consider:

1. You're investing your money in this place. How do you think it will perform? If it's well-built and nicely appointed, within reasonable commuting distance from population centers, you're probably OK.

2. Did I see you mention that it was a condo? Is this what you really want long term? If so, then fine. If not, you're going to be selling it at some point, and condos are much more "commoditized" than single-family homes. Someone with the same unit is always more desperate and willing to sell cheaper.

3. There's always another deal. Regardless of what you decide, don't buy it just because you think you'll never find another deal this good.

4. Is this place still a compromise for your true desires? If so, then please consider how much sooner you'll be able to have what you really want if you forego this opportunity.

As I say, the other arguments are very good. But you were looking for input, so I thought I should just represent the other viewpoint for balance. Best of luck to you...whatever you decide! :-)

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