I might be broke tomorrow UPDATE

iVillage Member
Registered: 11-22-2006
I might be broke tomorrow UPDATE
83
Sun, 07-13-2008 - 8:01pm
OK girls I did it! I put in the offer. It is a lot of money and the difficulty is that as it stands I would have some savings left but only about 4 months salary and then IRAS and that is with my Dad's help which I am going to take him up on. I feel slightly vulnerable taking help from him. It has been literally 15 years since I asked him for money for anything so it feels weird but he is being very insistent and wants me to have a safety net.
I guess I will have a response to the offer tomorrow at some point although I dont know - sometimes it takes longer? I know she was calling the realtor as I left the house to let him know I had submitted the offer but I dont know that he was around to receive it. Anyhow, if he wants to go up any more I will be dipping into those savings. Not sure how I feel about that but I know it makes me feel shaky.
Luckliy the mortgage is only 500 more than rent and that is actually just fine with us. We have been renting for 3 years in this 2 bedroom in a very expensive part of town so thats why there isnt much difference. It isnt like we are going twice as much which is what I did when I bought my first house after renting a one bedroom for a few years. So we will still be able to save a few thousand at least every month to replenish savings or to help fix up each month. I have thought about that and think we will be fine as long as we are careful. Also I cranked the numbers and I could actually buy and afford the house on my own even if something happened to SYB and I. and I dont even like writing it so you can imagine how it felt to think it through.
The two other houses I saw were nothing to sniff at compared to this one but mostly that is about style. They all need some work I guess and it is clear I am going to paying about the price I am offering to get the space I need in the neighborhood I like along with getting it livable and planning reno down the road. I just loved the period built ins etc in the one I made the offer for. It just made me feel good and I honestly think it reminds me of Paris or Europe and I did live there five years so that makes sense. I also thought today long and hard about the fact that when I bought my second home years ago after the separation/divorce I bought in a lesser neighborhood to save money and it was a new townhome in a community, very plain and simple. The house was safe and solid but it did nothing for me spiritually. And since I work at home I think that is an issue for me. I moved to the city partially because I need more action around me and stimulation. It helps me work and feel good. So I think the house has to have these things about it too and the one I bid on tonight does so that is great.
And I figure if this one doesnt work out, at least I am getting more and more a sense of what I want and need!
So - sorry to drag this on but throw more good wishes my way. I need every single one of them and I have a feeling tomorrow might be a big day over here!
Lilypie - Personal picture

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iVillage Member
Registered: 11-03-2003
Wed, 07-16-2008 - 8:08pm

However you divide up the pie (who pays for what), I just hope you keep your eye on the bottom-line value of the house!

iVillage Member
Registered: 10-07-2005
Wed, 07-16-2008 - 8:41pm

Good point Soonee!

I would never overextend myself for a house payment- that's why I comfortably pay someone else's mortgage LOL! My rent is really low for this area, and I have the full basement of a house, full yard, washer/ dryer access and utilities are included. If I bought a place, all I would be able to look at is a condo apartment in an old building, my mortgage payment ALONE would be twice my rent amount and then adding everything else on top of that- I'll stay where I am for now :)




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iVillage Member
Registered: 11-22-2006
Wed, 07-16-2008 - 8:59pm
it is hard for me to know what the house is worth in the market we are in. I used the comps to come up with my first bid and am able to go up a bit from there - it was a happy moment to realize that I believed his house was worth something less than he thought and also something I could afford. That's where the hope sprouted over here. I know it is in the ballpark with me offering him what I have and it may still be in the ballpark 24000 more but then it does become a bit subjective. We are talking a lot of money here so that amount doesnt change things much around here int he price range I am looking in. And I have trouble separating the fact that I have to find it in my pocket. I have seen a lot of the comps in the area now and in other neighborhoods which are similar in that they are transitioning like this one is. So I think this one isnt worth what he has it up for list price which is why I offered 50000 less. but I also think in this market people are putting their houses up for more somehow knowing they are going to take a hit because everyone is offering 50000 or so less. I figured he would inch me up as he is but I dont have much cash left which is what I would have to use and I feel attached to my reserves over here especially since the house is selling as is. I can and will get the inspection and if the inspection comes back ludicrous I will walk which is allowed of course. But the point is that there could be a lot of repairs to handle in the first year and I need reserves to do just that! And I get what you said about that the numbers might not work because the last words I said to the realtor were "it could be that we are not his ideal buyer" My loan stops at a certain number and the rest is cash and that makes me nervous whereas someone else might have a higher loan amount they could get and then they are looking at 75 dollars a month for every 10000 he asks them for. I would obviously feel better if I were in that situation!! Is it worth what he is asking? Maybe. But it might just as well be worth what I am offering because they really arent that far apart. So to me at this point it is a question of whether we can meet in the middle somehow still giving him close to what he needs and leaving me with close to what I have to have to feel safe. If not, I will have to move on and yes I will be sad!! I love the house and havent seen anything that I had the same reaction to so i am emotionally invested - but I havent said yes to his price either time now so I guess I still have my head on my shoulders somewhat.....I think!
Lilypie - Personal picture
iVillage Member
Registered: 12-06-1998
Wed, 07-16-2008 - 9:04pm

Soonee- Good point.

Alison- I was interested to hear you are "happily" renting. I'm having real trouble getting my head around the fact I'm renting. Dad always brought us up to believe buying was the thing to do- I bought a unit at 21 & my sister built a house at 20! I have started looking into property settlement, so have been looking around at properties. To buy where I want to (I have always lived close to the city) I'm going to end up with a mortgage more expensive than the rent I'm paying. I'm really unsure what to do but feel very uncomfortable with renting long term. Then If I DO continue to rent how do I invest the money from my settlement? And that means I will lose some of the government benefits I receive (I get rent assistance & cheap medical stuff)...... It's all too hard! I would be interested to hear how you & others have dealt with this.

 



Tracy

iVillage Member
Registered: 11-22-2006
Wed, 07-16-2008 - 9:09pm
Oh dont worry - I wont overextend myself through a house payment. My rent is high because of where I live. My mortgage will be not too much more and I will get the tax deduction and down the road I might even finish the basement and deduct studio costs for what I do. I have figured out all of those numbers and I am doing the right thing for sure - I probably should have done it way sooner although I am glad I waited in some respects because the market is really on my side now.
My concern now is only that I not spend all of my savings to get in the house. I dont like the idea of having no cash reserves and I have really never lived that way before. The mortgage payment wont change at this point because my loan amount is stopped at a certain number and I know I will be up at that number. Our rate is done and the mortgage payment is calculated from that - its really coming up with the difference between the loan amount and what he wants. We have 50000 in savings that are already going to this - the thought of spending more will leave us living in a way we have never had to which is without a safety net and I am struggling with seeing my Dad as a temporary safety net or just moving on if the owner wont budge!!
We can save anywhere from 3-5 grand a month living as we are now ( very frugally!) and that number wont go down TOO much either so we can build back quickly but what if something happens in the first month? I guess then I call dear old Dad? That is hard for me to swallow. I have been on my own since I was fifteen and I havent really asked for money or needed help like that. I asked him today point blank whether he would and he said of course and sounded find with it - so it is just my head that needs to change or think this through....


Edited 7/16/2008 9:14 pm ET by citylife74
Lilypie - Personal picture
iVillage Member
Registered: 12-06-1998
Wed, 07-16-2008 - 9:39pm
City it sounds like you have thought it out well. I too have never lived without cash to fall back on so I can understand you not wanting to live that way. I was interested to read you mentioned a tax deduction. Could you please explain to me what that is for? Over here there is nothing like that for home buyers (well there is a first home owners grant but I'm not a first home owner). It really annoys me because even if I end up with a mortgage the same as my rent I will be worse off because I will no longer receive rent assistance! Crazy.

 



Tracy

iVillage Member
Registered: 05-13-2005
Wed, 07-16-2008 - 9:59pm

Good point - look at the bottom line and don't overpay!! I just love the diversity of expertise we have here on our board.

I was just thinking after reading city's report of looking at the comps and knowing how the market is right now - it must not be easy for buyers or sellers in this market.

City, you are doing good and we are rooting for you - and I hope you do end up getting a good deal!!

I think everyone is watching this thread with fingers crossed - I know I keep checking in to see how City is doing!!

iVillage Member
Registered: 10-07-2005
Wed, 07-16-2008 - 11:40pm

Lol- well where I live housing is expensive, but not the highest in the area (I'm in BC, Canada).

A two bedroom apartment in a building here is typically rents starting at $950 a month plus utilities. If you get a suite in a house you're looking at more. My rent is lower than that and I have utilities included.

A mortgage for the minimum mortgage I would need for a place here is about $1500 a month- almost double my rent. And that doesn't take in taxes or repairs or utilities. At least here if my fridge dies, I call my landlady and she replaces it- I don't have to come up with another $500 for a used fridge.

As I'm paying a monthly amount for buying the company I own- my money is very tight. I would LOVE to say, like City, that I was able to save 3-5 grand a month- but sadly I don't even MAKE that kind of money! I am paycheque to paycheque and no savings at all for now- but I'm working hard and that will change over time.




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iVillage Member
Registered: 11-22-2006
Thu, 07-17-2008 - 12:01am
Well from what I understand and have experienced before ( this isnt my first home purchase since I bought two houses during my marriage and then went to renting for the past three years) you can deduct the interest you pay each month in your mortgage payment which for a long while is darn near all of your payment, as well as interest on home equity line, and any real estate taxes you incur. And for me since I work out of my home, I can make a studio space in the home and deduct that portion of the home using it square footage/percentage of the house taking off that portion of the mortgage payment as well as any utility portion going to that part of the house. For home office you have to make sure you are not using that part of the house for anything else. I am planning on trying to renovate an English basement into a studio since there would be an entrance for my students to use either in front or back of the house. I think a true English basement that you can rent out to a tenant in the basement legally has to have two entrances, one in front and one in back and a window big enough to crawl through in the case of a fire. I know a lot of people who have bought houses like the ones I am considering and they rent out their basements for a 1000 a month and they actually used that potential monthly rental income to qualify for the house payment itself. I dont think home ownership is for everyone but for me it does truly make sense once you crank the numbers out! I hope this makes sense!
Lilypie - Personal picture
iVillage Member
Registered: 11-22-2006
Thu, 07-17-2008 - 12:11am
Oh and I forgot to say that apparently if you have rented for 3 years you are a born again first time home buyer. So you can just keep that in mind. I found that out when I was talking to my investment company and was a bit shocked. I didnt rent for three years to get that title again but it is pretty convenient!
Lilypie - Personal picture

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