We are renting this house and we need to make a decision to buy this house and make it what we want (location is exactly where we need to be for our jobs and schools) or move to a different house and buy that one. This house has great potential but if it going to work for all of us (3 adults one being a senior citizen, 3 children one being a baby on the way) then we need to figure this out, pronto! We need a bigger down stair master bathroom, my Mom is going to need one of those standing walk in tub/shower contraptions and an assistant chair to keep her mobile up and down the stairs aas she ages. ANd of course the easy stuff like painting and changing the flooring, I need to figure out how to divide my girls very large room into 2 separate spaces one of my girls is almost a teenager and desires more privacy. Originally she was going to have her own room but with the baby on the way she gets stuck with sharing with her little sister. I don't know, it comes down to buying this house and fixing it up, moving to a house that costs a lot more but is already fixed and not a location that we like. We really like the neighborhood, schools, proximity to our jobs..but we have to decide by March, lease is up in April, our son is due in mid March...I'm a little bit freaking out.
We have never bought a home before.
Have you talked to any contractors to determine costs of making the changes you described?
Have you spoken to lenders to determine your loan eligibility and terms?
Do you have the means to purchase the house as well as pay for the updates? After purchase/updating, will the money expended be equal to or less than the cost if you were to buy another house that would suit your needs without remodeling?
With the updates, will the home's value be equal to or less than the value of other homes in the neighborhood? Or, will the house be "over-improved"?
Have you had the house appraised to see if the assessed value matches the price your landlord wants for it?
Always remember that you have more than the two options you mentioned. Don't rush and force a solution that you may later regret.
I have yet to talk contact any contractors. I am having two estimators for the roof come out next week. I need to find a trustworthy contractor, I'm guessing the BBB is a good place to start looking.
We have our financing secured. I would need to get all of my estimates in to know if the money expended would be equal or less to purchasing a home that would suit our family.
I haven't personally had this house appraised I looked it up in our local appraisal district website and it is appraised at more than what the landlord is asking. I am assuming that the home value will be worth more than the other homes in the neighborhood after updates and it would be over-improved. Is that not a good thing?
Since we have all of the financials in place I am really nervous to spend the money and end up regretting it for sure.
I love how you told me there more than the two options I mentioned, not to rush. What else should I be looking at as options?
The danger with over-improving a home for the neighborhood is that you're less likely to re-coup your investment in the home when it's time to sell. You've probably heard that it's best to buy the worst home in the best neighborhood you can afford because that gives you a lot of financial flexibility without the risk of losing out on return on investment. By owning the best home in the neighborhood, you have no where to go but down (**$ wise) unless other home owners improve their homes to match or exceed yours.
For contractor referrals, consider Angie's List instead of the BBB (which, in my opinion, is pretty much a paper tiger organization).
Other options: 1) continue to rent (this house or another house); 2)wait to see what other homes are listed this spring/summer that better suit your needs without the extensive remodeling; and 3) consider other neighborhoods than just the one other you mentioned (there are always more than just two).
There's a reason why your landlord isn't asking for the appraised price. So, if you go forward with purchasing your current home, be sure to have a real estate attorney guide you and include contingencies of an inspection, appraisal, and financing in the contract. Should any of these go awry, you'll have an out of the purchase contract.
Call a Realtor... some homes have wide hallways and specials showers for access of wheelchair. Give your list of criteria including 1 story home and let her come up with the selections- MOVE IN READY!
JenLoera, First welcome to the real estate boards!
You have already received some good suggestions and I hope you consider them carefully. Myself, I note that this will be the first house that you have ever bought and, so, it is a VERY important decision for you and your DH to make.
And it's never a good idea to make important decisions when you are stressed or under a timeline ~ baby's arrival in March and your landlord's desire to sell when the lease is up in April. Instead, I would suggest that you talk to the landlord about a six month lease extension while simultaneously locating a new rental available by April so you are running the show instead of the landlord. If you know you have options, then you can negotiate from a position of power instead of meekly asking the landlord to consider the extension.
From what I understand, you have your mother who needs her own room (bedroom number one), you and your DH (that's bedroom number two), your two daughters - one a bit younger and one a bit older who would like her own room - sorry but that's not going to happen right now but don't worry sisters have shared bedrooms since as long as I can remember (bedroom number three) and one for the new baby (bedroom number four).
Of course, one of the girls could share a room with the infant but doubt that THAT would go over well or you and your DH could keep the infant in your room but that only works for so long so that's not really a solution or, since you absolutely need four bedrooms right now, you can explain to your daughters that five bedroom homes are way too expensive to afford BUT, if you take your time looking, you just might find one that would work. Tough love....
I don't think your current rental house is a good option to consider ~ the renovations would be costly and probably counter-productive re re-sale. It might "over-improve" re the neighborhood but it's every bit as possible that your renovations would not be considered "improvements" ~ they sound to me more like temporary solutions to your specific situation.
You say that the landlord has priced it below the appraisal and it hasn't sold yet. Doubt that many people would pay more later (than they are willing to pay right now) for "a large bedroom split into two by whatever means" and the downstairs master being modified into a suitable area for an aging adult. Don't do it!
Instead, find another suitable rental in the area you like and/or try to negotiate an extension on the lease of the current house. You asked a question so I'll answer ~ DO NOT TRY TO BUY THIS HOUSE OR ANY OTHER HOUSE IN THE NEXT THREE MONTHS!
Your first house should be special to you ~ take your time to find it. And, just an aside, broaden your horizons re location; there might be many places that you have never considered that will end up being the perfect place for all of you. Post back and up-date when you can.
Thanks for the input everyone. I will consider everything carefully. I have been looking on HAR to locate some other homes and neighborhoods, I need to drive around those neighborhoods to see what it's like.
This house has four bedrooms I've turned half of our current 4th bedroom(we use it as a family room) into a half baby half family room...for now. But I'm still feeling flighty, the more and more I think about it, the less and less I want to buy this home.
I have a question, if a house is appraised at less but is being sold for more what does that usually mean? By the looks of it on HAR it has been very updated and we could move right in and not have to make any improvements except modify the bathtub for my Mom. I haven't even seem the inside in person and I love it.
Also, any advice on how to calm down my preteen about going to a new middle school next year? For some reason I am letting her emotions get to me as far as not wanting to move her. I need some wise counsel on that one. She's my first born, she's got me wrapped around her finger!
Jen, Congratulations on the new addition to your family.
Some great advice so far - If you can wait, then wait.
About your last question. Your lender will only lend based on the appraised value. So if you are qualified to borrow - $300,000 (most important number to start with) and the house you like is priced at $250,000 - great in your price range. However, if the bank has the appraisal done (not the county property tax number) and it comes in at $225,000 - then bad. That means if you are looking at a traditional 80/20 financing they will loan 80% of $225,000 and you are responsible for the difference.
Yes - do not assume that the county appraised value is what the house will appraise for.... Best of luck, but I think any time you are rushed into making an important decision, emotion (like your daughter's) can push you into the non-optimal decision. Take a DEEP breath, and get all those people in to get a realistic view of your options.....
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