<p>“I know NoCal a little bit – I have a nephew and niece-in-law who are in Walnut Creek. Bought their house for $950K. Something like a $700K mortgage. I think the house is now worth $650K or so. Not a happy thing.”</p>
<p>Yes…prices are down quite a bit…in retropsect …I should have sold 4 to 5 years ago…</p>
<p>dstark – 20+ years old…you’ll be looking at replacing heating and air, roof (maybe), appliances, water heater, maybe a tub if the finish is peeling… Try to find a house you like where some of that has been done within the last 5 years. A/C units last about 10-15 yrs and that’s about a $10G expense so that’s the second thing I’d check…the roof is first! </p>
<p>Fortunately, since the housing market is not very hot, you should be able to make an ‘conditional on passing inspection’ offer. During the hot market of a couple years ago, it was not unusual for a house to have competing offers with inspection waived – Yikes! That’s a big risk. Glad I didn’t have to take it.</p>
<p>"dstark – 20+ years old…you’ll be looking at replacing heating and air, roof (maybe), appliances, water heater, maybe a tub if the finish is peeling… Try to find a house you like where some of that has been done within the last 5 years. A/C units last about 10-15 yrs and that’s about a $10G expense so that’s the second thing I’d check…the roof is first! </p>
<p>Novelisto…good advice, thanks.</p>
<p>“Fortunately, since the housing market is not very hot, you should be able to make an ‘conditional on passing inspection’ offer.”</p>
<p>I will not make an unconditional offer…</p>
<p>Yeah, an unconditional offer and an unconditional surrender have a lot in common…</p>
<p>:)…</p>
<p>I like this calculator…</p>
<p>gives a rough idea what a person can afford…</p>
<p>I don’t have a mortgage…but it comes out close to what I think I can afford…</p>
<p>[Affordable</a> Home Calculator from CNNMoney](<a href=“http://cgi.money.cnn.com/tools/houseafford/houseafford.html]Affordable”>http://cgi.money.cnn.com/tools/houseafford/houseafford.html)</p>
<p>I just checked out that calculator…whatever happened to the rule of 2.5 times gross income? It gave me a number over 5x income…no way, no how, never in this lifetime.</p>
<p>Yeah…you’re right…</p>
<p>Once we sell the house, my plan is to buy something else without a mortgage. It will be smaller than where we are now, so I won’t have a mortgage, the taxes will be less, the insurance will be less, the heat bill and the electric bill will be less . . . . and so on and so forth. So it will be OK that I’m also earning less.</p>
<p>Right??</p>
<p>Yes!! All those things will go down. </p>
<p>Unfortunately, the reverse is true too. H chose this super-sized house. The price was good,…we just didn’t realize how much more the taxes, the insurance and mostly, the heat would be…especially the heat. Space was great with 3 kids growing up. Now that 66% of them are gone, I cringe every month paying for the floor we don’t use.</p>
<p>
Assuming a normal downpayment, that rule works out to the mortgage being around 13% of your gross. This is very low, the banks use 28%.</p>
<p>In my area, it’s practically impossible to find a decent house for 2.5x your salary, even if you make $100K. If you want good schools, even 5x is tough.</p>
<p>
We are thinking seriously about doing this, just moving across a town line will get me a (slightly smaller) house with 1/3 the taxes, paid for by the equity in the current house, so no mortgage. That would put at least $2500/month in my pocket, which will help tremendously when kid #2 starts college. The schools in this town are crappy, but I won’t care (well, I’ll care some) since I won’t have any kids in the schools.</p>
<p>I really like my house, we’ve spent 20 years getting it how we like, but the savings may be too good to pass up.</p>
<p>I am following this thread really closely, getting up some nerve. H has 3 years left to work, I 3.5 (assuming we can survive our jobs that long-we really no longer enjoy them).</p>
<p>S has been living in Spain since 2003, getting married in July. D graduates in May, and told us last February that she was going to live there as well. That night was when H and I stayed awake until we came up with the dates I mentioned above.</p>
<p>We decided we will sell the house, only keep the “musts”, and retire to Spain. The decluttering will be rough. Getting the house in shape, rougher.</p>
<p>However, we have decided on an area, and part of this summer will be spent looking for a suitable place along the eastern Spanish coast of the Mediterranean.</p>
<p>We inherited a place in a great part of Madrid, but need someplace near water, warm enough to enjoy a good part of the year.</p>
<p>When son visited us at Christmas, I told him he might not want us too close, because he might need to help his old 'rents, to which he replied, “That’s the point! I want to help!”</p>
<p>Sorry for the ramble, I’m learning a lot here.</p>
<p>Wow – he wants to help. Can I adopt that kid??</p>
<p>Ours is already assuming the same…with no angst!I do love the kid. But I hope we can arrange things such that the impact will not be enormous. (fingers crossed)</p>
<p>notrichenough,
We live in a major metro area with very high COL and extremely good schools, and bought at just under 2x salary in 1998 (kids were in K and 2nd grade; we had just paid off the last of DH’s student loans and were pretty much done with day care by that point). We had no desire to be house-poor, and that decision was validated when I got seriously ill four years later and was on unpaid medical leave for five years. We had to tighten the belts, but we were never in any danger of losing our house.</p>
<p>Sure, we could “afford” a much bigger/nicer house, but that’s not the way we live. We KNEW college bills were coming and that these kids would be expensive. DH and I put ourselves through school and have never received financial support of any kind from our families, so we knew whatever was needed, we’d have to provide ourselves. </p>
<p>We’d rather spend our money on the EFC than on a house.</p>
<p>I know, Very Happy!</p>
<p>And no, nobody can adopt him. Well, his fiancee’s family has, but that’s different.</p>
<p>And, CountingDown, I’m with you about EFC bit. My block could be the poster block of people who spent money foolishly. My kids were the only ones whose parents could even consider the kids “going away” to college. None of them thought about it at all. Never figured out why we never bought a lake house. Now they know.</p>
<p>We bought in 1992, paid about 3x our combined salaries, and got a 2200 sq ft colonial on 1/2 an acre. Great schools.</p>
<p>This house is now worth about 2.7x what we paid for it. Our salaries did not keep up this pace, but they did increase, which made the house much more affordable over time. Plus, we were serial refinancers - started at around 10% interest, and chased the rates all the way down to 5%.</p>
<p>This house would now be almost 4x our current salaries. I don’t know if I would spend that much now. Much of my town is even more expensive and would be unaffordable to me today. I don’t know how young couples can afford my town these days. I sure hope there are buyers when we go to sell in a year or two.</p>
<p>There is literally nothing in my town that I could buy for 2.5x our salaries.</p>
<p>responding to post 240 about the 6 week sale thing: We just bought a house that was on the market for 3 months before our offer - the first one. Now we have to sell the old one, so I’ve been working on the punch list of what needs fixing, updating, etc. So I’ve been avidly following this thread. </p>
<p>We are half-way moved, and left an assortment of furniture at the old house for staging. It’s pretty overwhelming trying to figure out a starting point; do we focus first on moving everything surplus out of the house (which really means focusing on the new house), attending to interior projects, tackle the landscaping? Going over there tomorrow to start stripping wallpaper at least. Ours doesn’t need much structural work, but little things like paint, new light fixtures, floor refinishing, etc. The list can get long very quickly. </p>
<p>VeryHappy - I’m impressed that you are tackling something every weekend; you inspire me! And dstark, it sounds like you’re really moving along with this - great to line up all the workers and projects so methodically, and to get advice here.</p>
<p>Fauxmom – I’d get rid of the surplus stuff first – it’ll make it easier to move around efficiently. Try working from big to small. Take the things that ‘hit you in the eye’ first. Wallpaper/paint, old or ugly fixtures, the <em>visibly</em> broken/dirty/tarnished…then stuff that doesn’t work when you try it and any deferred maintenance that is less obvious…then the small stuff like knobs, grout, etc. Of course, you may be a ‘finish one entire room at a time’ person. I’m more a ‘ride off in all directions’ girl. I prefer tackling the big jobs when my energy is at the highest. </p>
<p>Last thing is landscaping – esp. if you are going to try to be on the market in the spring. Get the bushes trimmed and plants bedded out a week or so prior to listing. They’ll look fresher; stick to a single color palette, white pansies or yellow marigolds or whatever goes with the colors of your house. Makes it easier to replace if one croaks. Mass them in, odd numbers look better than even, and 7 looks better than 3. Pansies are cheap and cheerful. Mulch is a great hider of sins. An inch or so around the bedding plants and smoothed out where you can’t plant makes the eye slip over certain faults. It’s like foundation in make-up! Consider mulching and planting around your mailbox…and get a new mailbox! It’s the first thing your buyers will see. </p>
<p>Okay, y’all ready for a grout cleaning substance that really works? Buy Oxy-clean powder in the plastic tub…DO NOT follow instructions on the side for grout cleaning. For some reason, their instructions create a crystalline substance over the tiles that it is really tough to remove. Get yourself a bona fide grout brush – a narrow, stiff-bristled brush available at any home fix-it place – much better than a toothbrush! Mix a small amount of Oxy-clean with very hot tap water. Slosh onto manageable area of tile. Wait a bit. Get a little Oxy on your brush, dip in hot water, then scrub. The dirty grout will brighten right up but (unless it’s really, really old) should not <em>come</em> up. I went from having dark grey-ish grout between white tiles to white-white-white. I even used it in the rental we lived in for a while – I think it’s why we got our deposit back no trouble!</p>
<p>notrichenough, we have a 2400 sf split level, half an acre, 45 years old. It was at about 2.5x purchase price before the market came down, and comps are now at 2.2x. We refinanced after five years to a 15 year fixed at 5.625. Will pay off a couple years after S2 graduates. We wanted the equity to help pay for whatever EFC we couldn’t cover with current income/savings.</p>
<p>We’ve talked about getting a townhouse or condo, but there’s not much around here that would cost less than what we’d get on our house right now. We’re not inclined to move out of the area for the forseeable future, so we’re just going to sit tight. :)</p>