The House
May 12, 2008 by Robin G
Last fall, The Wookiee got wind that the house he lived in until he was 12 had been, like so many others, foreclosed upon.
“We should schedule a showing,” he said.
“Sure,” I said. “You’ve told so many stories about it, I’d love to see the real place.”
It’s gorgeous. Except for the part where it’s ugly as sin and it needs a bunch of aesthetic repairs. But underneath the peeling wallpaper and the ’80s appliances, there’s turn-of-the-century woodwork, a bedroom with a loft, a big front porch, a cedar closet in the basement. A lilac bush outside the kitchen window. A LILAC BUSH. Be still my heart.
I walked through the rooms in a daze, touching the wooden columns in the foyer. “This is what we’ve been looking for, isn’t it? This is the house we wanted.”
“Yeah,” said The Wookiee, looking around wistfully. “And it’s a lot different now that I’m a foot and a half taller.”
Pipe dreams. Like so many young Americans, we’ve got no savings and our credit is atrocious. The debt isn’t too bad, but I can’t get a mortgage. It’s a good (and rare) month when the bills all get paid on time. Not that we don’t have the money for that — we generally do — but frequently Teh Crazy gets the better of me and the worst thing in the whole world would be to even consider my finances, let alone actually do anything about it.
The house was going for $225k. Easily $50k more than it was worth in that condition, given that to make it habitable, it would need probably $10k worth of work — $20k to be pretty. We said a sad goodbye to the realtor and went back to our lovely, and loved, apartment.
But we kept checking the website. In November the price dropped to $205k.
In December, $175k.
In February, $165k.
In March, $145k.
When we saw that last price, The Wookiee and I took deep breaths, and had a discussion. “Okay,” I said. “If the price holds, and if the house doesn’t sell, in a few months, we’ll call the realtor and explain the situation — that we have suckass credit, but we really want this house, and does he know anyone that would be willing to give us a mortgage that destroys us on the APR but isn’t an ARM and has relatively low payments each month. And if he says yes, we’ll throw ourselves at your grandparents’ feet and see if they can lend us the downpayment.”
Yesterday the price dropped to $115k.
The mortgage payments, together with taxes and insurance, would only be about $150 more than our current rent.
Teh Crazy has been eating at the corners of my mind lately, and I find myself incredibly nervous about this. I’m not sure we’re ready for a house. We’re the kind of people to put a bucket under a leak and leave it for six months before calling the super. You can’t do that when you own a house. It’s three miles away from a neighborhood I love. It will easily take ten years of do-it-yourselfness to make it attractive. If the water heater suddenly breaks, we don’t have the money to simply get a new one on the spot. And we’d probably never get the mortgage anyway.
But.
$115k.
For our dream house.
I don’t know.
I would strongly recommend going over your entire finances with someone. The big question is whether or not the house will increase in value. And having an inspector check it out will be good, too. (My mom is a realtor who knows a lot about loans, APR, interest rates, etc.)
Ultimately, will the changes you make increase its value? Is the area an area that will improve and not decline? I don’t even know what state it is in…
Ordinarily a good rule of thumb is that there is never ‘just one’ of anything. No such thing as the once-in-a-lifetime case in realty. Which is why, if this didn’t happen, you could still find a place like it for a similar price when you ARE ready to buy. But of course, this place obviously has a lot of nostalgia with The Wookie. So that changes things.
A good question would be whether or not you would consider purchasing this place if there were no attachment to his upbringing there. I love the idea of buying this place because of what it meant to him - but sadly it’s important to buy it because it is a very, very smart financial decision.
Have you looked at a lot of houses in addition to this? You want to know how this compares and how the area itself compares to other areas in town.
Some of this is over-thinking, but better to overthink than underthink. And better to miss a great chance than to do bankrupt. I hope this all doesn’t come across as negative, because it really would be wonderful to read about you purchasing and moving in to your dream house!!
Awww. I feel ya. I’m desperate for a house (that so far only exists in my brain). But, living in SoCal, coming up with the damn down payment is enough of a nightmare.
A house is always an investment….if there’s a way to make it possible, it’s worth it just to explore the option. Like John wrote, maybe go talk it over with a pro…
[...] 13, 2008 by Robin G Between thinking about The House and being a touch on the side of manic, I find myself picking up paint [...]
John — Thank you for the advice! I think the house is likely to increase in value, especially with the cosmetic improvements we intend to do to it over time — though I’m not sure how much it will matter, in that we don’t intend to ever move out. The big question would be if we could get it to increase in value sufficiently to take out an equity loan, which we could use for infertility treatment and/or adoption. The area is decent, good blue collar people, and hasn’t really had a lot of fluctuation in its character for the last fifty years. It is, interestingly, exactly the kind of house we’ve been looking for, and at easily 50k less than we ever thought we’d get — regardless of The Wookiee’s attachment to it. The finances, though…
I think what we’re probably going to do is go look at it again, and press with more specifics about the condition of the house. If there’s any structural problems — in need of a new roof in the next five years, for example, or a foundation problem, etc — we’ll pass and wait. If it looks good aside from the ugly carpet and need of a paint job, though, we’ll probably throw ourselves on the mercy of the bank.
wonderspot — Oh, God, SoCal. You’re fucked.
And $115k for a house you’re in love with is actually an amazing price. Here, with no exaggeration (it doesn’t even sound like exaggeration to my ears anymore) a nice 2-bedroom condo (not house, condo) would be around $600k to $800k.
A house in Los Angeles is unaffordable.
[...] Sure. Whatever. I’m facing my worries, because goddamn do I want The House. [...]