What would you do? Making my dream home a reality...

[frugalbabe]

Okay looking for opinions here people! Dh and I have been living in our current home for 5 years. It is large enough for our family and we can easily afford it. We had decided a year back to start looking for a slightly larger home with acreage. We have always dreamed and planned of owning land and making our second home the one where we would settle in permanently. When the whole national economic mess started crashing down we decided to stop house hunting and hunker down we have been paying off our debts steadily. We do not carry excessive debt (more than I like but easily managed) dh makes a good wage and his job is as secure as anything is these days. Well, a week ago our dream home came on the market. It is exactly, precisely what we want. It is listed much lower than it is worth because the present owners have gotten themselves into a financial tight spot. We can afford it and have been prequalified for the amount it is listed. I am ready to jump at it but feel uncertain with the dire predictions of what could be ahead. And there is the problem of selling our existing home although I think if we were willing to break even and list it low enough it would sell. I know no one can predict the future but what would you do? Would you give up the house that is adequate and you know you can afford for the one you've always wanted but is definitely going to take a bigger chunk of your monthly earnings and risk whatever we're headed for? Just looking for other's perspectives and any input you may have to give!

[stinkbug]

Well...since you asked - I'd stay put.
Some considerations: You have small children at home, your expenses are just going to go up. The older they get, the more $$$ for everything from clothes to sports to dental, etc.
You don't know how long/if/how much your current house will sell for. Has it been appraised? Have you had a market analysis? How much equity do you have?
Is the other home further from town/work/school/stores? (with land, I was thinking it's more rural)
I don't know if there's ever a perfect time for such things....I think it's a really personal decision depending on your comfort zone with finances. Just because the bank approved the loan doesn't mean you can afford it in real life! (not implying that you can't)
I'm a real dork. We made a huge list of pros and cons when we were looking. And put all the numbers on paper in two columns, comparing expenses and other factors. It's lot more to consider than *can we afford it*.

[madhen]

Well, if the house is your dream house, you've been looking to move for a year now, and the purchase is within your financial reach, I have to admit, I'd go for it. You can always make its purchase contingent on the sale of your own house, so you are not stuck with two mortgages. Now is a fantastic time to buy, and you are one of the few who are in a fantastic position to buy. How much more in alignment are you waiting for the stars to get.

I moved from my little suburban existence to ten acres out in the country, and I have never ever looked back and wondered if I made the right choice.

[Greebo]

The only way I'd consider putting in an offer is if the offer is contingent upon you finding a buyer for your home.

You do NOT want *two* mortgages, after all.

[PrairieRose]

It's absolutely a buyers market but I'd be sure to have an EF in place before I went for it. You just never know when the heater/ac will go, or some other major something and with economics what they are right now you need a safety net.

*eta*
I would absolutely put the contract on contingency of selling your home, too

[frugalbabe]

You cannot even buy a house anymore without the sell of your existing home at least that was the regulations last Thursday (changing every day!) Yes we have had a market analysis done on our home it is worth (on the market) $165,000 we could sell it for $150,000 and still make enough for a down payment on the new home. The new home is rural which will definitely add to our driving, maintenance etc. We are capable of doing all of the maintenance/upkeep on our own -- in five years we have completely redone this home dh is a nuclear engineer but on the side he does carpentry and used to build homes so he has customed everything in our home. I swear I wouldn't even consider it if it wasn't what we had been searching for for so long. Decisions decisions.....the conservative (chicken) side of me says to stay put. But the adventurous part says to go for it, it may not come along again!

[frugalbabe]

All right here are my pros and cons; (uh feel free to ignore just talking out loud here) but I do appreciate the candor I knew I would get it!

Pros;
-We would have over an acre and a half (not huge but big enough for my gardens and chicken plans etc)with full water rights.
-House is big enough for our family and in-laws when we have to take over their care. Two families could live comfortably and privately.
-House comes with a separate shop very important for dh who is a serious carpenter. (how he handles a stressful job)
-House has the lay-out I have been looking for it even has a private main-floor office for my homeschooling room (swoon)
- We have proven we can take care of land and home we have just used up every part of our yard and decided years ago suburban life was not for us!
- We do have a sizeable EF. We met with a mortgage lender and she said we are in great shape and have managed ourselves well, our debt to income ratio and credit score are good.

Cons:
- Bigger house more-land equals more $$ we would need a ride on mower, bigger snow blower etc etc etc. and there are more things that could go wrong and that always costs more.

- I have a good bird in the hand I know every inch of this house and can fix all of it ourselves and we can comfortably afford everything. It will be tight when we have to start caring for older family members but we can manage.

-I will be starting all over again with a mortgage UGH I have worked so hard on this one and bam here we go again on another 30 years. ~sigh~

-What if something really devastating and unforeseen happens in the economy that makes my dh's seemingly rock solid job shaky? I keep hearing dire predictions and President Obama has said he is anti-nuclear power that does directly affect us.

I know a chunk of my decision making is pure emotional- while I think I have a good head on my shoulders I worry that I am letting the emotional side take over and that is never a good way to make a major financial decision

Oh and Madhen thank you!! I really do look at our home in the city and just feel like it is time to move on and I have wondered am I going to miss all of this when I am out in the country?? Your post heartened me.

Stinkbug-- totally agree with you we sat with our very conservative banker as she ran all of the numbers she told us what we could afford and both dh and I immediately took $50,000 off her number. What THEY say we can swing and what I know our lives are like definitely don't agree! And the first thing our realtor said was we would make the offer on that house contingent on the sale of ours, and I do know that may be a long haul in this market.

[madhen]

If you get a decent price for your current home, you could always put a large amount down, then pay extra on your new mortgage to knock it out early. That is what I'm trying to do with mine. I add a couple of hundred on each payment.

Bigger house, more land = more $$, but it also = more equity.

I see six pro's and only four con's. And one of the pro's is that you can have chickens.

Of course, you could always wait until housing prices go up again and pay 30% more for your dream home.

[stinkbug]

frugalbabe, you're in IF right??? Has your realtor given you an average days on market for local house sales? Just curious. We've had houses in our neighborhood sitting for months and months....but Boise has a huge overage of houses.
We had a contingency when we bought this one. We had 45 days to sell our other house. We offered on Friday and our house listed and sold on Monday. That was in 2002 before the real craziness started! So....anything is possible. The people who bought our house were in town for one day to look....they looked at 6 houses. Our realtor said they bought ours (get this.....) because it was clean!
We have only 1/2 acre, so I understand wanting elbow room!!! (there is literally no land for sale here....that we could afford.) Dh settled for the 4 car garage.

[stinkbug]

PS....Do you have a link to the listing? I'd love to see it!

[frugalbabe]

Yes I am in IF. We have had houses in our neighborhood sitting for 100+ days - very slow market. However we live right by an irrigation canal and the houses on the other side of it are selling pretty briskly I think because they are in the mid 150 range so they still have a market. The homes in my neighborhood are all priced right around the high 160's so my thinking is if I am willing to take a big hit in what I would profit it and price it right it might give it an edge. Our home has been updated and kept up well and it isn't a super small home (2600 sq. feet) and we have a large private backyard. Let me work on getting a link to the listing to the home we are considering.

And Madhen when I get chickens can I pick your brain for advice??? I will be a total newb at chicken raising!

[Momof3girls]

I would go for it and see what happens. If you put it contingent on the sale of your current home, you are out nothing.
If you rented your current home out and bought the other, would that make the mortgage on your current house? If so, that may be another option for you.

[frugalbabe]

I can't seem to link it the MLS # is 14988 Idaho Falls priced at $259,9000

[FrugalMomof3]

I have to admit I would go for it.... with that being said we are doing exactly what you want to do.

Our home is currently on the market been there for 56 days, in about 3-4 days we will be closing on our dream home, it was too good to pass up and while we can afford 2 mortgages, things will be tight.

I say go for it, but if things get tight there are several options.... rent out your first home, cut out cable, cell phones, etc.... That's what we are going to do.

Am I crazy? Maybe but when does your dream home come along?

[stinkbug]

I looked it up but can't get the link to work.....is it the big two story? Very cool! You couldn't touch it in Boise for double the price!