Post # 1
FI and I weren’t planning to buy a house quite yet, but an amazing opportunity has come along, and I’m 99% sure we are going to jump on it, but I am just feeling a roller coaster of emotions right now!
My sister and her family recently left the city for the ‘burbs. Their city home has been on the market for 6+ months with not so much as a bite. They have already lowered the asking price substantially. Well, they just got a lowball offer another $50,000 less than their current asking price. Their realtor said they could probably negotiate the potential buyer up about $25k.
So, my sister came to me and said that if I was interested in buying the property at the same value, they would give it to me because we are siblings and there are several advantages involved in selling to a sibling that we would both benefit from. Sis and her hubby are essentially losing money because they would be selling it to me for $10,000 LESS than they bought the house for several years ago, at the peak of the market.
The house is super cute and cozy but tiny 2-bdrm. It is in a GREAT neighborhood where houses on their block and nearby easily go for close to double what I would pay.
My FI is out of work at the moment, but I was able to qualify for a mortgage on my salary alone. Interest rates are so low right now. The housing market at the bottom and I feel that prices will only go up over the next five years. I’m getting a fabulous deal from my sister. I have enough for the downpayment and they will assist with closing costs. FI and I discussed and we are spending about 60% of what our monthly mortgage cost will be on rent now anyway and better to invest in the house than throwaway on rent. I think it would be a great investment.
I am just so overwhelmed and nervous because I literally have to make a huge life decision in a period of hours. My biggest concerns are FI not working and will he get a job? I can afford the mortgage on my salary alone, although it leaves us with VERY little disposible income after. Our wedding is coming up this spring, and I now wish I hadn’t planned such an expensive wedding but too late now coz a lot of stuff is already reserved and paid for. I am also in grad school part time so I just took out a student loan which I will have to start paying back in another two years.
I am a little overwhelmed but this seems like a great opportunity. What do you bees think? Am I taking on too much, being the sole breadwinner with the mortgage right now? What if FI doesn’t get another job or god forbid I get laid off (doubtful but you never know). Is this opportunity just too good to pass up? Deep down I feel like it is the right choice. If the offer hadn’t been presented the way it was, I probably would have ideally waited to be out of grad school, with FI steadily employed, and maybe get a slightly bigger house. But all things considered, I think things happen in life and sometimes you just have to jump if a good opportunity arises. But I am freaking out!!!!
Post # 3
I say do it but I am impulsive like that!
Post # 4
My immediate reaction would be do it.
However, I don’t know what your finances are. If you like the house (enough to stay there for a long time), you crunch the numbers and it works out to be managable, do it. You have to pretend FI will never be able to contribute. What if he doesn’t find a job? What if you end up breaking up and his name was never on the mortgage? You could be stuck paying for it by yourself.
Post # 5
If we/I live a very, very frugal lifestyle I can manage financially on just my salary, if I had to. But that means absolutely no extras – no going out to eat, no going out for drinks with friends, no new clothes, no nice haircuts. After mortgage payment I will have enough leftover for my utilities, groceries, and a tiny little bit extra for the miscellaneous. ack! but crossing fingers FI gets a job then we would life quite comfortably..but yes I think I can do it on me alone if I HAD to ..
Post # 6
Well if you want this house, then do it.
But I disagree with you that housing prices will only go up…we are still knee deep in recession and housing prices are likely to remain low at least for the next year or two..so if you feel pressured only because of this, they I wouldnt buy it and would wait until FI has a job.
Post # 7
It’s a great opportunity and you should take it, BUT only if:
You have enough savings to keep you afloat for a few months in the worst case scenario (you get laid off)
You have a game plan in place for what would happen if you had to sustain the house on your own, not even factoring in your fiance. Right now this decision depends solely on you financially.
I’m generally not a fan of going into home ownership with someone before marriage (personally), so you have to be smart about this and in no way depend on your fiance’s possible future job.
Post # 8
I wouldn’t, but I’m a pessimist. Buying a house can be one of the worst investments and nothing but a giant black hole money pit. We’re trying to sell a house right now and it’s a nightmare. The freedom and flexibility of renting is so, so attractive and I wouldn’t buy a house just because its a good opportunity. It should be something you both are ready for, financially, emotionally, whatever. Spending 60% of the mortgage on rent right now is not a bad deal at all – especially when you consider how much a house REALLY costs to keep – repairs, lawn stuff, maintenance, insurance, taxes, you name it.
/exit raincloud 😉
Post # 9
my concern would be if there’s any chance you all would be moving out of your area within the next few years, especially since your fi is out of work–what if he got a job opportunity away from your current city? is he at all looking elsewhere? this was the main reason hubs and i haven’t bought a home together–when we first moved in together i was planning on applying to grad school and potentially moving out of state (which we did) within a couple years so it wasn’t worth it
Post # 10
@finnaroo: I did think about this. The good thing is that we are in (fairly) reasonable commuting distance of two other major cities (yay tri state area!) so he could really expand his job search to either of those places, if necessary, and could still be ok.
@KristenGotMarried:The good thing is, it is a city home so no lawn maintenace – yay! Homeowners insurance and property taxes are all rolled into the mortgage payment. Obviously, if something major breaks down, it would suck – but since my sibling is selling it to me, I already know the house inside and out – roof was completely re-done last year, etc, etc, so I know I am not getting a total lemon of a house – I think I have a good idea of what is likely to go wrong, and we will have some savings set aside in case something totally unexpected strikes.
Post # 11
Kristengettingmarried and KatyElle both make really good points. I know this sounds like a really good deal but for me it would be way too scary to buy a house with only one person working and basically NO cushion for emergencies. Really expensive things can and do go wrong all the time. And this is not a decision you should have to make so quickly. Maybe it will work out but if not, there will always be another house. Especially when you are married and both have jobs. I think this is just cutting things too close for comfort.
Post # 12
I agree with the naysayers – sorry! I would not make a huge decision like this under pressure – you say you only have a few hours, and you weren’t even planning to buy anytime soon. Also you mentioned the house is tiny… Could that be part of why they’re having trouble selling it? What if prices don’t go up? (As we know, that can totally happen!) Do you want kids? Is there room for them? What if you can’t get out of it? There are SO many people in that predicament. They can’t afford to sell, they can’t move, they are just stuck in a house they’ve outgrown.
There will be other houses. I’d pass!
Post # 13
@tarlonda: Yup – my sister and BIL had two kids in there! Obviously, they moved out when the littlest was getting mobile.
The thing is, this isn’t just ANY deal…doing an intra-family transfer is saving us close to $10,000 over an already amazing price, almost no down payment needed b/c they are assisting with closing costs, so I still get to maintain my safety cushion emergency fund.
Sure, there will be another house down the line – but not in this neighborhood, for this price. I’ve kept my eyes on the market casually for over two years and you just don’t get something like this in the area for under $350,000. Yes, the small size is a deterrant, but it isn’t “that” small. It is perfectly comfortable for a couple – and a baby even!
Thanks for all your feedback, but just talking through this in the post has made me feel like it actually will work out and while it is possible the market could stay stagnat for the next five years…I tend to be an optimist and think things will look up 🙂
Post # 14
I definetly wouldn’t do it for all the points listed above. Buying a home is a HUGE decision, not one that should be made in a matter of hours. Plus, what happens when you have a couple of kids? If the house is already tiny, it sounds like you don’t have much room to grow.
In this economy who knows what will happen in 5 or 10 years when you want to sell and buy a bigger house.
Post # 15
I think it depends on what city you live in to e honest. I understand where the naysayers are coming from, but I can see why it would be an attractive option. If a great deal came up for me in the tri-state area and I was in your situation, I just might have to jump on it myself! Also, 2-bedroom is perfectly fine for a young family in the city.
Post # 16
Do it!!! I would love to see this house, if you aren’t opposed to posting pics of it