We’ve reached stalemate in bidding for a lovely 100yr old house we’ve found. It’s our first home purchase so we’re still trying to figure out the whole financail/emotional thing. We can afford to pay their full asking price but it certainly wouldn’t be a bargain at that price - but we are talking about a home here, not a financial investment. There’s also a bit of work to be done in terms of extensions etc to make it perfect which is a minor negative. The big disadvantage to missing it is that old houses like this don’t come along everyday so would mean at least a 3-6months wait to find another if at all. The problem is I can’t decide if it is the short-term temptation of just buying it that is attractive or if we really will be heart-broken if we miss it. So the question is, should we pay slightly too much for it now and undergo the necessary work or wait wait until an even better one comes along but risk missing out altogether…..?
I am an emotional buyer. I fell in love with a house that I thought that I couldn’t afford at the time. I didn’t buy it. If I had taken that extra risk, the house would have doubled in value. Instead I bought a much lesser house with less potential. I have always regretted not buying the first one.
However, the risk factor is not to be ignored.
April 18th, 2007 at 6:32 am
unless you’re a cash buyer, the other thing to consider is that mortgage interest rates are going up
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April 18th, 2007 at 6:32 am
the market is in horrible shape right now, use your head not your heart, how many people are looking for money pitts in this economy
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April 18th, 2007 at 6:34 am
I am an emotional buyer. I fell in love with a house that I thought that I couldn’t afford at the time. I didn’t buy it. If I had taken that extra risk, the house would have doubled in value. Instead I bought a much lesser house with less potential. I have always regretted not buying the first one.
However, the risk factor is not to be ignored.
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April 18th, 2007 at 6:35 am
Personally, if it is not exactly what you want why pay more for it? Will you be able to recoop your money quickly if "the perfect one" were to come available in 6 months?
Hard to say what I would do without actually being in your position.
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April 18th, 2007 at 6:36 am
I would not purchase a 100 year old home. Wood framed houses have a life expectancy of about 100 years, get ready to open your pocketbook big time if you do buy it.
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April 18th, 2007 at 6:40 am
right now, it’s a buyers’ market. if the seller isn’t willing to negotiate then keep looking.
and remember, you’re just buying the house. you’re not marrying it. if you decide that it doesn’t suit your needs, later on, then you sell it and find another. real estate is a fine investment. you’ll get your money back, and more, most of the time.
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April 18th, 2007 at 6:45 am
Have you had a home inspection done on the house? Do you know the full extent of what would need to be fixed/updated? Although I’m sure it’s a beautiful and charming house, it is very old and it could cost an awful lot of money to fix and update it. I would especially have the pipes and wiring checked out, as a lot of times in older homes, it all needs to be replaced. There are so, so many other things to have checked out too though. I would definitely have a home inspection before I bought any house, especially one that old.
Also, if you’re having to pay more than you expected, just make sure you aren’t going to stretch yourself too thin, financially speaking. Take into consideration the cost of property insurance, property taxes - and private mortgage insurance if you don’t have 20% to put down. You need to make sure you can afford to take care of problems as they come up, and problems do happen even with new homes.
DO NOT do any of the creative financing like an interest only loan or an adjustable interest rate. So many people are losing their homes now because they bought more house than they could afford and used creative financing to be able to get their house.
Another thing to remember, is that buying a real fixer upper can put a huge strain on even a good relationship (especially if you have no idea what you’re in for).
Good luck with whatever you decide.
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April 18th, 2007 at 6:49 am
1. Dig deep, how long the house is really on the market. Your real estate agent just wants to make a deal, he maybe hasn’t told you, that the house was re listed and was on the market since 1 year. Your agent has an obligation to tell you the truth.
2. Depends how long its listed (including re listings), you can go down with an offer 3% for each month.
3. Make a conditional offer, that you, based on the inspection report, can review your offer. If you find something, and you will, ask to get repaired or a the price lowered, or get out of the deal.
4. Don’t trust your agent, check and counter check his words.
5. Ask your agent to change the contract with him, to lower his brokers percentage. You can’t lower the percentage of the seller.
6 Make sure the roof is good, the basement is dry and there are no infestations of any kind (mice, rats, ants, birds, gofers, bees, bats…) Get it in writing into the offer.
7. Find out, what is in the planning for that area. New streets, Bridges, Highway, Schools, Strip joints, Malls, Industries…..
8. Don’t trust your agent
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April 18th, 2007 at 7:00 am
evilindependent has a good point, but even then, i don’t envy your position.
When my wife and i were looking to buy, we were in a bit of a rush as our co-tenants had moved out and we faced paying for the entire rental by ourselves. We spent 2 months frantically searching for a place and eventually ended up where we are now. Though the area is good, parking sufficient, and everything we’ve done so far to improve the place has been fine, there are many other problems that slowly cropped up over time. Walls started cracking, bathroom ceiling started leaking, floor tiles start to pop up.. the list goes on. Its come to a stage where we’re deciding (again) whether to move, or to invest more money making good the home.
Thing is, we realised that short-term, especially when faced with a sense of urgency (in your case, the possibility that you might not find another ‘nice’ old house in a short period of time), we tend to be impulsive and make that emotional ‘buy’. We also realised that we could have done much better if we had invested a bit more time and effort in researching. However, whatever i’m saying will probably fall on deaf ears if you are really dead set on the property. But before you do, just ask yourself these 2 questions:
1. Is there a possibility that a nicer, more solid house, that suits you exactly, could come into the market in the future?
I’m sure the answer is ‘yes’ since there is always that possibility. Which brings you to the next question..
2. Can you live with yourself if you miss this ‘opportunity’ to buy this particular house?
Since i’m sure it won’t be the end of the world if you do miss the opportunity, why not try talking again to the seller and letting them know that you really really like the place, but you just cannot afford it at this time and therefore will have to decline if he doesn’t reduce the asking price. Then just wait a few months and see what happens. Best case, he calls you up because he remembers you and he has yet to sell it off. Worst case, he doesn’t, and you live to find another much better property at a much better price.
Hope that helps.
PS. I’ve decided that we’ll stay here and save our money and eventually build our own home. That way i have full control over every aspect of it and it will also cost much less.
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