Monday, August 10, 2009

House Hunt... The Search Begins.

Intent on buying into this “ownership society” thing we’ve heard a few things about, we have started to hunt for a house. A place to call our very own. The American Dream and all that good stuff. Given our price range and our refusal to end up stuck in a bland condo building up equity on a geological pace, we’re probably going to be purchasing what is commonly referred to as a “handyman special.” At first, this sounds appealing. It conjures up images of us donning overalls and frolicking around a charming old house painting the walls while a peppy 80’s song blasts in the background. After looking at a few “handyman specials” however, I can now report that substantially more work is involved. But we’re still pretty determined to shoot for it.

Now I’ll leave it to more knowledgeable economists to discuss the overall trends in the U.S. housing market. I’m hardly a real estate novelist. What I can tell you is that the area where we’re seeking a place to buy teeters on ludicrous in terms of affordability (which is to say, it isn’t). What makes matters worse is that there are some seriously delusional homeowners out there. Honest to goodness assholes.

Look, I don’t care how wonderful the local schools are—an 1,100 square foot one-level house with a creepy basement that looks like it was lived in by Jigsaw from those “Saw” movies SHOULD NOT cost $439K. Say, what model of house did you say this was? A cape? A colonial? Oh, "A Kaczynski," how charming.

I kid you not about the basement in this place. Something very wrong happened down there. “Oh look honey, there’s the workbench where he carved up his victims! And there’s the wood burning furnace where he tossed the dismembered body parts! And there’s the corner where the dog sat and told him to do it all!” This would be funny, if only we hadn’t seen five houses just like this. I’m pretty certain that the bathroom in one of them doubled as a meth lab (although that is a potential cash cow if we wanted to find a way to pay off our mortgage quicker).

Yeah, so the owners sanded and refinished all the hardwood floors in the house and put in some recessed lighting. In their minds these may be MAJOR SELLING POINTS, but that doesn’t entitle them to tack on $100K to the listing price. Would the homeowners be insulted if we submitted a bid at half that amount? Probably, but I felt offended that somebody out there thinks I’m stupid enough to pay that kind of cash for a house. Furthermore, I’ve played more than enough “Sim City” in my life to realize that residents don’t like to live directly next to a zoned industrial area. They'll leave, now matter how low you slide the bar to the left on the tax meter. And then you've gone and spent all that money building a virtual neighborhood with firehouses, police stations, and schools, all for nothing. And then the rolling blackouts hit, followed eventually by UFO attacks. I'm telling you, "Sim City" is a merciless bastard of a game. Never, ever get into it.

Also, I don’t mean to alarm you, but the taxes in the area we’re looking… well, they just might turn me into a Republican. After closing on the property, there is a substantial tax rebate you can apply for, but there’s a byzantine process involved in getting it and we wouldn’t be eligible to receive it until calendar year 2011. This of course begs the question: why not just eliminate the rebate program altogether and just lower everybody’s taxes across the board?

Yes, I’m familiar with the conventional wisdom: keep looking. We’ll know the place we want when we see it. However, I would like to go on the record and state that I’m giving serious thought to moving under the sea.

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Bob said...

I am now in my third house in 13 years. A few things I have learned:

-Do NOT use the inspector recommended by your realtor. They may be just a yes man to get you to close the deal. Learned that one the hard way.

-Look at homes owned by old people. The house may have that old person smell and pink shag carpet, but it may also be well maintained. If it has four square walls and a good foundation, the uglier, the better.

-Keep in mind the first time homeowners tax credit of around $8k.

-Try not to buy the starter home. Moving sucks.

-Realtors don’t know everything. They are often house snobs.

-“Pottery barn houses” may be pretty, but I will bet you $20 bucks that you replace it with the ugly, yet practical family home that you scoff at today.

-Wish I were buying this year, it is a buyers market.

Bob said...

One more thing...
Don't be one of those dumbasses that moves an hour away from work to save $4k in taxes and then burns $5k in gas going back and forth. Isn't 10 hours per week of your life spent driving worth something too?

Smitty said...

Ask when the roof was last shingled. Ask how many times its been shingled-over. Start saving DAY 1 in a "new roof" fund. Found out the hard way that a total roof replacement can be more than $10,000, and that "we can worry about it in five years" goes quicker than you think. Next thing you know...5 years is up and you have a roof that needs an expensive facelift.

Also, and this seems trivial, stand in the room in which you will watch tv, and have your spouse flush toilets, run showers, turn on the outside spigot, etc. In our old "1st house," if Mrs. Smitty took a shower upstairs or the heater kicked on, I had to turn the tv up so loud it could wake the dead.

George said...

And if you have to turn up the TV so loud you could wake the dead, be sure you don't live near a cemetery. Just saying.

wfta said...

Rickey may need to look a little north of Westchester County or (God forbid) across the Tappan Zee for greater affordability. I bought houses in ’81, ’85, ’89, and ’02 and I don’t believe in any of those years the mortgage rates were as low as today—so you have a lot going for you. If you have a place with structural integrity, kitchens, baths and floors can be done later when you have a little money saved.
Roof is important, but take a good look at the plumbing and especially the heating system.
Don’t be in a hurry. And don’t be embarrassed to offer 20-25% less than the listing price (fuck ‘em if they can’t take a joke.) Interest rates should remain attractive and if we get another wave of defaults, there could be some more downside in house prices. There is little to be lost in buying after prices start to rise.

Bob said...

"And don’t be embarrassed to offer 20-25% less than the listing price (fuck ‘em if they can’t take a joke.)"

My current house was on the market for about 8 months. In that time, the sellers were forced to replace the blue shag carpet and the roof to sell. Plus they kept dropping the price. In the end I offered and even lower price based on what I felt I could pay and what I thought the house was worth to me. My realtor said don't bother going that low. I did it anyway.

They ended up taking my offer.

Sassdawg. said...


Being a math geek, you can also comp to rents in the same area where you are looking to move. The wifey and I just recently moved into a gorgeous 3br apt in Downtown Jersey City which even in this depressed real estate market would still be listed for 500k. We rented it for $1450. It would take us 28.74 yrs of renting to just reach the principle balance and 50.9 yrs to reach the cost of principle and interest costs over 30 yrs. Just not worth it. I wouldn't do it if I were you.

If you still insist on doing it, listen to these guys, but ignore the nonsense about the $8k, it's $8k...Seriously