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RSSHouse #4 Under Contract
Call us crazy, but we have reached an agreement to buy a house for approximately $301,500. It was the 7th offer we had put on a house during our house hunting, but only the second seller who was willing to negotiate with us.
In-fact we were perhaps not aggressive enough with our offer since the seller quickly countered at our offer price without the extras we included (closing costs, allowances, etc). After a couple more counters we reached an agreement (see my account of the negotiations for House #2 to get an idea of what I mean). However after shopping around since effectively July we are excited to have some visibility to what the future is going to look like for us.
You might argue we are premature to the prime time to purchase a home, but we are still pretty much living out of our suitcases and feel a strong urge to start settling in, especially now that we are expecting.
These sellers were much more willing to sell at a loss than previous sellers whose properties we had made offers to. As it turns out there was a relocation company involved with the sellers so the company incentives to sell obviously helped us to get a price that we felt was more reasonable given the current market conditions.
We should close before the end of this month assuming we get through the inspections/repair negotiations ok.
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Comments (12)
Congratulations! And a belated congratulations on the baby on the way...
Posted by Saver in the City | December 10, 2008 9:05 AM
Are you going to rent or sell the townhouse?
Posted by Stephen | December 10, 2008 10:54 AM
How much of your cash stockpile are you planning on using as a downpayment? With this new mortgage, and your three existing mortgages, you'll probably want to hold back a significant cash reserve in case the rentals sit empty for a couple months and a new roof or furnace (or two or three or four) pop up.
Isn't this house price about 3.5 to 4 times your regular income? Is that a little aggressive? When my wife and I bought our house a couple years ago, we intentionally went for a lower-priced home in anticipation of her 'retiring' with a baby.
Posted by CPA1298 | December 10, 2008 1:05 PM
Congrats, that was pretty fast. Can you give a few details, size, no. of bedrooms etc. I'm always interested in what houses cost across the country.
Posted by Miss M | December 11, 2008 12:55 PM
Are you concerned about lawsuits and what have you done to protect yourself from them?
Posted by Robert DiNero | December 11, 2008 12:59 PM
CPA1298,
House price is now about 3x income. We are going to put 20% down. Yes we are stretching and will not have the cash reserves that I would like to have. Once we settle in, one of our priorities will be to start building up/replenishing our emergency fund.
Miss M - 3 bedrooms + bonus room, 2.5 baths. On a little over 1 acre. ~2,500 sq ft.
Posted by 2million | December 11, 2008 1:33 PM
How did the buyer's agent situation work out for you? I'm interested to hear!
Posted by Boston | December 11, 2008 2:49 PM
When you convert you home(s) to a rental that is. I didn't spell that out in my post.
Posted by Robert DiNero | December 12, 2008 10:07 AM
Wow, I was under the impression that NC was cheaper than that. You must've bought in a very nice suburb.
Posted by Mike | December 12, 2008 9:34 PM
Is the house 3x your household income including wife's wages, or 3x on just your wages? Isn't the plan for your wife to stay home w/ the baby? If so, would that bring the house closer to 4x your income?
I imagine PITI will run around $2,000 on the new home. This would run around 32% of your takehome income, if you're making $100,000.
With real estate and equity prices likely to be stagnant for a while, I stick with my recommendation of 1) live in one of your existing properties 2) pay down debt
Posted by CPA1298 | December 17, 2008 12:54 PM
CPA1298,
Wife isn't currently working. Its very roughly 3x my salary/bonuses/etc. I am expecting PITI to be around $1,600/mo and yes it would be well over 32% of take home pay. Will be tight in the beginning but we should grow into it.
Posted by 2million | December 17, 2008 3:26 PM
Congratulations on both having the house under contract and the soon to arrive baby. It is crazy that you can buy a house for $300k, I know that is the norm in a lot of places but where I live you need to spend at least twice that just to buy a tiny starter home. Prices here haven't really fallen at all, in fact they have remained pretty level and have still been increasing slightly in several places. That's the problem with the NYC area, out here a smack dab in the middle middle-class family is one that is earning around $250k per year.
Posted by TS | December 20, 2008 10:31 AM