The homebuying can be expensive post

I’ve blocked out this dark chapter in our financial history from my memory.

We bought a house that’s too big.  It’s a wonderful beautiful house.  It was, of course, the nicest one we looked at and right on top of our affordability range.  But we didn’t (and don’t and won’t) need 3000 sq ft.  We will never need 4 bedrooms and a study unless I accidentally have triplets.  (Somehow I thought we would need separate offices, but it turns out we miss each other.)  We bought it just on my income, not expecting DH to get a job right away, and the mortgage was less expensive than our big-city graduate student rent, but we did not need a house this big!  We could have gotten a perfectly livable house away from students for at least 30K less and a reasonably decent house for almost 100K less.

I underestimated how much cash we’d need with moving and not getting paid etc.  I took an interest free loan from the credit card company to shore things up.  I did estimate the closing costs correctly but they still took a huge hit from our savings.  IIRC, the problem was I mis-estimated how long it would take the stocks I sold to get into a checking account combined with having to pay for the move first and be reimbursed (a long time) after.

Right after we moved in, the one part of our house not covered by the homeowners warranty– the gas line to the house– broke.  Expensive repair #1.  Though we love the plumbers and they were perfectly reasonable, still not fun.  The roof skylight also leaked, but fortunately that was covered and just cost the $50 copay to fix.

It took a few months to save up to be able to afford a washer and dryer.  We did the laundry at a local laundromat/sports bar (ah, college towns).

Then the 15 year old water heater went poof.  We decided to replace the other 15 year old water heater the next month when our emergency fund replenished, just in case.

Then there was the car.

The dishwasher died, flooding over into the guest bathroom on the other side of the wall.  Only mild staining…  The a/c went kaput and smoked up the house while it was dying.

The sprinkler system broke, taking a huge section of lawn with it before we noticed.  Many things have leaked and dripped and flowed over the years.  The toilets have all had their cloggages.

And OMG HOA + lawns = $$$$ + pain.  (So MANY things that are too painful to think about in this post.)

Weather got a big portion of the fence which had to be replaced.

Four years later we still haven’t bought any furniture for the great room.  We still have the same furniture from our small big-city apartment in our ginormous house.  Minus one old futon, plus one Amish chair, 6 bookcases, two beds, and an Amish filing cabinet.  (Bookcases are always a spending priority!)  We ended up splitting up our living room set and putting part of it in the great room.  It’s sparse, but no longer looks unintentionally blank.

We do love this house.  The kitties love it too.  But we’d probably have been *almost* as happy someplace a lot cheaper.

What have you learned from your home-buying experiences?

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28 Responses to “The homebuying can be expensive post”

  1. First Gen American Says:

    We spent way more on repairs than I’d ever imagined. I’m sure everyone has a similar story. We bought a fixer, but even with that, we didn’t expect our sewer to back up into our basement and it wasn’t covered by our home warrante that came with the house.

    I think the best thing is to estimate an annual repair cost on top of your normal mortgage expenses. Houses have a lot of things on them that can break, so something is always at the end of it’s life or needs refurbishing. Now that our house is mostly done, I will enact a paint one room a year rule, so that it doesn’t all creep up on us at once.
    Next year though we have to repaint the outside on at least 2 sides.

  2. Everyday Tips Says:

    My house is 2700 square feet, and we don’t even use all the space with 3 teenagers. (Basement is finished too.)

    I love our house though, and I love the yard. The yard is what sold us and not the house. However, often times you don’t realize you don’t need such a big house until you actually live in it and get your ‘living patterns’ down.

    I have learned that houses are giant money pits and that you should never think of them as an investment. With taxes and repairs, I cannot imagine you come out better than renting, but who knows.

    • nicoleandmaggie Says:

      #2 just wants a place that I can customize in a way you can’t with rentals. Admittedly having someone else do the maintenance is nice. But I hate the way rentals can be taken away from you at any point, so there’s no point expending energy to make it nice. A house I owned would fix that.

  3. imawindycitygal Says:

    Ditto the comments about home repairs. I’m hesitant to say that I have had no MAJOR issues with my 50+ year old house because I’m afraid to jinx myself. Most of my home repair expenses have been maintenance related: replacing windows with more energy efficient ones, replacing storm doors for the same reason, modest remodeling of a bathroom and the kitchen (nothing fancy, just bringing them up to contemporary standards for configuration and appliances), new roof and gutters, landscaping, and plumbing repairs. That said, all of this stuff added up to more than I thought it would. I’m generous in my estimates, but the landscaping expenses have been much more than I imagined. (Tree trimming is expensive! And I’ve had to do it 3 times in 9 years.)

    Like Everyday Tips, the attraction of this house was the yard. It’s a great house, too, but it is definitely much larger than my (now ex) husband and I needed. We didn’t need four bedrooms and three bathrooms, plus a full finished basement. But, I loved the extra large lot that would allow me to have a nice flower garden and a special area just for growing food, too.

    Now that I’m divorced, I’ve been making my house do more for me by renting out the upstairs bedrooms. That also means that much of the home maintenance costs are tax deductible as a business expense, too. ;-)

    I’m also grateful that I don’t have to deal with an HOA. I hate lawns. They’re so wasteful in every possible way: they suck up water, dollars, and time, plus their maintenance is very polluting.

    • nicoleandmaggie Says:

      #2 swears never to live anywhere with a HOA. I also dislike huge lawns, and don’t want a gigantic yard that needs maintenance, whether it’s flowers or lawn or garden or bushes or whatever. #1 tried having someone else live in a room in her house but it didn’t work out well.

  4. Nick Says:

    Funny timing of this post b/c (My website link is to today’s post at SAFTM about small houses – the other extreme!).

    Anyhow – I made my first housing mistake buying an investment property w/ a friend. The day after closing the water heater burst. A week later the pipes froze and I was in a crawl space UNDER a 4-story brownstone w/ a buddy fixing that. Then the drain pipe got clogged – and clogged again – and again. Then… well, suffice it to say I could go on and on.

    I’m sure it’s no relief to know you’re not alone. I’m just happy to be a renter where I live for now. When I buy I may go for a new(er?) smaller home instead of a fixer-upper larger home. Even if I pay a little more per sq. ft. I’ve started to value stress and inconvenience more than Johann van der Smut loves gold. If you don’t know the reference, suffice it to say that he “loooveeesss goooooooold.” Or search for that in Wikipedia.

    :)

  5. bogart Says:

    Interesting stuff. Our home has much to recommend it. It’s just 1600 sq. ft., its yard is almost entirely treed (we can almost get away with not mowing and other maintenance is very minimal though see below), the lot is a decent ~3/4 acre, at 3 br/2 ba, the size of the house is pretty much perfect, it’s on a quiet (knock on wood) street a walkable 1/4 mile from an elementary and middle school in a good public school system, and on public transportation (though just one bus line and not a wonderful one). Oh, and no HOA.

    OTOH, we’re not within easy walkable distance of retail, at least not yet; 1 mile to a grocery store that’s across a busy road, and ~2 to a decent coffee shop, ditto a park with a playground (though the school has great playgrounds available afternoons/weekends/summer). We should really spend $10K to get many of the big trees in our yard cut down, and I’d like to do some grading and landscaping (not grass!) in the yard.

    Also our home was built in the 1970s … not a good decade for housing styles, or building codes (aluminum wiring, anyone?). We remodeled the public spaces (~$50K including a totally redone kitchen but not new appliances) and I’d like to do the back. The home’s all on one story, which is a big plus as we hope to live here until we keel over, and we paid attention to accessibility issues when remodeling; I’d like to do more in that regard. And over the roughly dozen years we’ve lived here, yes, we’ve replaced the roof (once, ourselves, cheap except for time) are on our second exterior painting (ourselves, ditto) completely razed and replaced the (10*10) shed (ourselves, $1K + time), got a new furnace and a/c (paid to have installed, ~$6K before tax credit), new septic tank (~$5K), plus the various miscellaneous smaller tasks/jobs/emergencies that arise.

  6. bogart Says:

    We can send trees! Believe me, even if we have ~20 cut down, we will have plenty. I want the sweet gums and many of the pine trees gone, and to allow the oak, the one dutch elm, and the several maples to thrive.

    The neighborhood one over from us has a nice pool (accessible only to residents/guests) and a small playground (accessible to all and used, as far as I can tell, only by my DC); unfortunately, I’ve yet to befriend anyone there but am cautiously hopeful that perhaps when DC starts school some appropriately residenced child will be befriended!

  7. Money Reasons Says:

    Our house is 2,100 square feet, and I enjoy it enough, but what I do hate is our yard! We only have almost a 1/4 of an acre and it’s sloped! I hate it!

    I would like a little bigger house (maybe around 2,500 or so sq ft.) and at least 1/2 an acre of land (1 acre being preferred!). Unfortunately, I’m the only one in my family that sees the house’s shortcomings…

    We built our house new, so it’s been pretty good repair wise so far (knock on wood)…

  8. frugalscholar Says:

    We bought a house somewhat beyond our means–small, but beautiful. We paid it off early and now we can afford it!

    Honestly, everyone has a few breakdowns (some very expensive) right after purchasing a home. Some awful karma thing.

  9. Molly On Money Says:

    I’d like to be all braggy and go on about my cheap house that’s only 1100 sq ft but the truth of the matter is when we bought it I thought we’d own it for a few years and be outa there! Eight years later we are still there and it was the smartest thing we did in a long line of very impulsive financial not so smart decisions.
    All those repairs made me cringe and well worthy of blocking out.

  10. Andrew @ 101 Centavos Says:

    Your experiences mirror ours in some ways. The new house ceases being new after a couple years, and all the cheap shortcuts developers take on spec houses start wearing out / breaking down. We know more now, and would have done things differently.

  11. Valerie Says:

    Wow! We nearly bought a house this summer. 900 square feet, no garage, and considerably cheaper than we could afford. It ended up falling through after the inspection… owner agreed to pay to replace the 40 year old carbon monoxide leaking furnace AND to replace the basement doors (which the 40 year old furnace to be replaced could not have fit through). But the seller balked when we found some dry rot… Estimates started at $2,000, and each inspector/contractor found more, and once we got up to estimates of $10,000 to repair it, we started to feel like it may be a money pit.

    In retrospect, we were really happy it fell through. With some distance, we actually think we our accepted offer was too high, and we were being slightly scammed by our realtor (who kept pushing for higher offers from us, rather than pushing the seller for a better deal for us).

    Our current hold up is finding a new realtor we trust. The house we were going to buy was a lovely house listed at $229,000. The next realtor we got claimed that there was “not a single house!” in the area for under $250,000. I’d already seen at least five under $250… alas.

    So, we’re still renting, and our down payment is earning us interest while we enjoy a managed building. (Only major non-owning peeve is the cat rent we are forced to pay…)

    • nicoleandmaggie Says:

      Ah man, realtors. Ours definitely managed to get us to buy the one at the exact top of our range and got the deal at that exact top. (They were asking 275– we bargained to 265. I don’t think either of us got a deal or were cheated though.)

  12. Rumpus Says:

    I think homebuying is often rushed. I know some people that spent a lot of time looking/thinking, but for so important a purchase (longevity and degree of impact), it often ends up not taking a proportional amount of time. Although, after living in a new city for a few years I never have a good understanding of even half the neighborhoods, so maybe it’s a satisficing decision. Or maybe it’s best to assume that there is a sizable chance that one may move in the next X years. The homebuying process has such an impact that I can’t wrap my head around it…much like choosing which career to work towards.

  13. Waiting For The Snow? Get The Coffee and A Pastry, And Enjoy Some Great Posts! | Everyday Tips and Thoughts... Says:

    […] Grumpy Rumblings of the Untenured discusses the expenses of owning a home, and her own personal pitfalls with home-ownership. (She had quite a string of bad luck I must say!) […]

  14. bethh Says:

    nice cross-link from today’s GRS post ;-)

    Thanks for this post – it reinforces my renter status as a good choice for me! I’m mostly a renter by default, since I live in an which is stupidly expensive (very cute 534-sf condo near me is listed at 275k, only $150/mo HOA… and it’s a foreclosure that last sold for 375k). BUT, I’m single, and not interested in cutting the grass and stuff, so I’d probably be a renter even if I lived someplace more affordable.

    It was harder when I lived in my favorite city and everyone I knew was buying, but I just kept reminding myself that I have to choose between saving for retirement OR paying a mortgage, and I’d rather have money than a (leaking) roof.

    I wish someone would do a post about median income as compared to median home price – with one income it just seems impossible to own in many of our cities. The bubble was NOT a surprise to me!

    • nicoleandmaggie Says:

      haha… yeah I so block this out that I didn’t even think to do the cross link until people started complaining and it started poking at that part of the past I’d rather have forgotten. Might as well share the pain, eh?

      The NYTimes has a really nice rent vs. buy calculator that will use that kind of information to advise you on whether renting or buying makes the most financial sense for you. http://www.nytimes.com/interactive/business/buy-rent-calculator.html Also MSN money occasionally does the best places to rent vs. buy based on things like median income.

      There are definitely non-economic benefits to renting.

      • bethh Says:

        Oh yes, I love that calculator. Though I never know what to put in for reasonable increases! I just took a stab at it (guessing 3% annual increases both for home values and rent, both of which I think are a bit high). It would take 21 years for the specific condo I mentioned to make sense (which is actually listed at 299k). I don’t really want to commit to living in 534 sf for the next 21 years!!!!


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