Rationalizing The House That Got Away
My wife and I just went through one of those roller coaster weeks in our house hunting search. We had a house on our radar screen that was out of our price range, but got drastically reduced. It was just what we had dreamed about living in although even at its drastically reduced price I hesitated about the price tag. We still don't "need" a home for another 6 months (till we get back from our assignment).
After an in-depth discussion about how it was everything we ever wanted and how we could stretch to pay for it we agreed to make an offer. Mentally we were ready to reach an agreement at the asking price - after all it was dramatically reduced. By the time we called our realtor to make the offer, the sellers accepted another offer. What a downer! It was a rare opportunity for us to grab a beautiful property on the top edge of our price range and it had everything we were looking for - by far the best value we have seen.
Looking past the frustration of missing out on something we had already mentally made the leap to living in - I recall:
- As a rule a thumb I have to believe its better to minimize our living expenses (ie read smaller house) rather than maximize them (read big house that just got away).
- Where there is one opportunity found lies more opportunities yet uncovered.
- I like to believe that we will end up in a house less expensive than this one that slipped through our fingers. While this house may have been a great value and decent investment, I believe that we will be ultimately better off if the delta we save will be invested in something that that works for us like an equity investment or a rental property.
My wife now thinks we have to hurry and find another house. Her concern over rising interest rates is a valid one. However I am less concerned over interest rates and more concerned over the price we pay. We can always refinance if rates drop, and paying a higher interest rate means that the option to prepay our mortgage may have a higher return when compared to other risk free investment options. I am just hope housing prices will drop -- at least in our area, Raleigh, NC, there is little sign of a dramatic slowdown. My fear is we end up with a lesser house at a higher price tag than the one that just got away.
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