Rowyn (rowyn) wrote,
Rowyn
rowyn

The Most Expensive Mistake of My Life


This was going to be my title for the last entry, but I decided to save it for a bit.

I don't know, of course, that buying a house is a mistake. Obviously, I'm betting that it isn't. But if it is, it'll probably be the priciest.

The sellers rejected my request that they pay closing costs, unless I upped my bid by the amount of said closing costs. There is a sort of logic to doing this -- it means the closing costs can get financed by the mortgage, instead of me having to pay them in cash. For example, if I buy an $80,000 house with $2,500 in closing costs, and I want to put 20% down (and I want to put 20% down) I need to come up with $16,000 for the downpayment, plus $2500 for the closing, or $18,500 total. On the other hand, if the price tag for the house is $82,500, and no closing costs, I only need to come up with $16,425 in cash up front. Of course, my loan in the first case is for $64,000, and in the second it's for $66.075. I'm paying the same amount either way.

But I don't really have great piles of cash lying around, so having to come up with less is, in fact, convenient. I dropped the estimate for the closing costs down a bit (I doubted they'd come in low, but I'd feel dumb upping my bid so the sellers would pay closing costs, and then having the costs come in at less than my increase), added it to the price, and told the agent to go back with it. That was about 2:30PM; haven't heard back from her yet, but Amy thought it wouldn't be until the morning. Knowing Amy, that'll mean around noon; I don't think she's called me earlier than that yet. :)

But it seems likely they'll accept the bid -- from their perspective, it's the equivalent of what they asked for.

I cashed in one of my index-fund accounts -- the only non-retirement savings I have. It's all money I invested between '99 and '01. That means I was buying while the market was nearing a peak that it hasn't approached even with the recent recovery, so I'm realising my first losses in the market with this transaction. On the bright side, at least I don't have to pay capital gains tax.

And I called an inspection company that had been recommend to me, to see about getting the house inspected.

Amy had told me that the cost of an inspection should be between $175 and $250.

The company I called gave me an initial estimate of $760.

I had them break it out: $300 was for the structural/mechanical part. $50 was for termites. $110 was "safety": checking for things like lead paint and radon. And $300 was for the septic tank.

While I'm not convinced that I care about radon in my house (the woman at the inspection company was convinced this was a big deal, but frankly, I doubt I've ever lived anywhere that had been tested for radon and I don't know why I should start worrying about it now) I do want the place checked for termites, and I do want the septic tank checked. I may or may not need to do that from the perspective of financing, but I sure don't want to find out there's major trouble with it after I've bought the house. (Ugh.)

$650 (or even $760) as part of the cost of buying the house doesn't bother me too much. I liked this house better than houses that were $10k more, so it's a good deal for me even if the closing costs come out to be more than anyone expected.

But what does bother me, though, is the thought of spending this much not to buy the house. I mean, if the guy looks at it and tells me "the foundation's shifting" then I've just spent $650 for the opportunity to go find somewhere else to live.

I dunno. Maybe if I go out with him I can get him to do the mechanical/structural part first, and if there are any indicators of certain DOOM on that one, we can skip the rest of it.

In any event, I'm certainly calling some other companies as well. Even the basics from this place were higher than Amy's estimate.

I still haven't told my current apartment complex that we're moving. We're supposed to give 30 days' notice. The trouble is, I'm not going to feel confident that I'm moving until I've got the inspection done and there are no problems with it. I don't want to wind up paying rent here for all of December if I've got a house by Thanksgiving -- but if the deal falls through, I don't want to be out on the streets for a month, either.

Of course, I doubt that the current place would kick us to the curb if we said "oops, changed our minds, staying another month after all". But I do need to talk to them about it. Bleah.

I could talk about my day at work now, but I think I'll skip it.
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