Home buying thread

For one, I have to start looking somewhere. I'm already an hour out of DC which is a dick punch commute. I wanted to start looking local and local here a lot of older homes run $600k. It takes $750k to $900k to buy a modern nice size home in this area. So that was the starting point.

I looked at homes and wasn't happy with the homes or the price so I started running my own numbers, considering what I've afforded in rent, looking at all the options. 5x base salary is the upper limit from everything I've been told. It certainly wasn't what I wanted to start with. The upper end I was thinking when I got the first preapproval was $500k.

If I go another 10 miles out adding another 30 minutes or hour to my 1 way commute to work (3 days/week is the current requirement - post covid it might be reduced to 1 or 2/week not sure yet)... then house prices start becoming much more reasonable.

If I was in the middle of NC I'd be looking at $300k monstrosities outside of major cities. If I was in NYC area still I'd be struggling to find a 2 bedroom condo for $250k for a reasonable commute or I'd have a 45 minute commute to work and 2 hours going home and fucking forget about it Fridays to afford any sort of house. Home prices are all relative as Silver said above.

Nija said:

MY MAN! Same, I'm scared shitless at these huge home values AND I've been in CA for 20 years where it's normal. I never, ever considered the stupid SF Bay Area real estate "normal".

As for $600k houses on $120k income, I have a coworker who pulls about $150 who has an $800k house in Daly City. If you've ever been to Daly City, it's the typical 3bed/1.5 bath 900 sq ft places on a 6,500 sq ft lot. For 800k.

I'm dropping links to AR housing like they are bombs and it's driving him nuts.

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We know we aren't staying here long term, its just where the work is right now. When we look for houses we really want to be in, we check out Nashville TN, Knoxville TN, Greenville SC, and Charlotte NC. Beautiful country (mountains, lakes, river) and lots of fun stuff with decent weather. Can get double or more bang for the buck.

LachiusTZ said:

Did you check that area I posted?

Might still be a hour out tho... My buddy only goes into DC a couple times a month

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My realtor is looking out that way. I think it's closer to 2 hours than 1 hour and I currently have to go to the office 3x/week. They may revise that to 1 or 2x/week but it's hard to say. Government does stupid shit sometimes and we aren't known for good telework policies.

So I know how I've generally built my budget. I don't itemize everything because I get really fucking irritated with all that structure. Generally what I try to do is pay my rent in 1 paycheck and have the other free to pay my other bills, eat, go out, etc. Generally that works really well - I get paid 26x/year so there's 2 extra paychecks of fluff. I set up $600/check to go into my retirement and then I save another $400 after tax that go into allotments $50 for each of my niece/nephew (1 boy/1 girl) for their college, $50 for my emergency fund and another $250 to pure savings. $2227 left after taxes all the other deductions in each check. Clearly a $650k mortgage would take damn near both of my paychecks... which seems unreasonable.

How do yall judge how much is reasonable to pay in a mortgage? I expect my rule of thumb where I subtract out retirement and savings then take 1 paycheck to pay my mortgage is out the window. I don't want to have to significantly change how I live but I'm ok with moving a bit of money around in how I have things set up. I could easily stop the pure savings and go to $2477/pay check. I could even walk my retirement contribution down a bit. I'm at step 1 of this pay band and steps 2/3/4 come in 1 year intervals the next 3 years at about $3500-$4000 each so I can increase my retirement back up when those come in.

One scenario I ran was $500k home, $50k down, mortgage at $2632. That seemed reasonable.

Burren said:

We've been looking at $700k on $350k incomes. I can't fathom how you can justify that price on a $120k income. Mortgage + taxes (insane in Houston; 2.75%) + insurance is nearly $4,500/mo. And we have zero debt as well, which is pretty un-American. I think I would have a nervous breakdown doing what you are.

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As I keep thinking about that how can you be scared to buy a house for twice your income? Is it the taxes and insurance? I think taxes here are around $5k/year, maybe twice that. Insurance isn't terrible - estimated at $150/month. I have about $15k in student loan debt is all, car's been paid off for 5 years. Are you not sure your jobs are stable?

To me, worst case scenario is I realize I've pushed myself too far, I dial back my savings and retirement contributions, the raises come in the next few years automatically and I manage where I'm at or sell the place or get promoted or take a new job elsewhere that pays for my permanent change of station (sell my house, closing costs, whole 9 yards) or I go to Afghanistan for 6 months or a year and rebound with that 2.5x standard pay over there. Hell, thanks for making me think through all my options lol. There are actually a lot of outs in case I do get in too deep.

I really don't spend a lot of money either. I hate clutter. I drive an accord that's paid off with only 85k miles on it. I grew up poor. Stuff doesn't make me happy but I would like to have a nice house and stop paying rent.

LachiusTZ said:

25% at most? of net.

With my wife working we were around 10 or 15%.

Was not possible until the past few years tho.

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where do you live though? In NY I was used to 50% of my net going to just my rent before the other bills. That's part of why I LEFT that shithole but half my net AFTER I pull over a thousand out of each check for retirement and other savings has worked easily for me. I know it doesn't fit the rule of thumb of 25%.

A buddy of mine that retired recently said to get used to living on much less than your actual income - that will help you save and be well prepared for retirement. I was netting $1938/paycheck (26/year) in NOLA living just fine on half the salary I have now. I moved to NY with a much higher cost of living, had $24k in raises over what I first made in NOLA and pushed my net down to $1600 and survived just fine.

Not saying I want to be retarded but I've driven hour commutes each way and hated it. This is going to be an even longer commute by train but at least I can read. From what the realtor has shown me I can get something decent for around 500k. That's where it is now, I may say fuck it and buy a condo near DC for half that a month from now...

Personally I think I plan to leverage WFH opportunities to buy some land somewhere cheap and live for almost nothing while maintaining the higher cost of living income. I'd be willing to bet that the next 10 years sees people start to spread out from cities as telework becomes more palatable for employers. I feel like right now is the absolute worst time to buy in to a HCOL area.

Regardless I would say its a mistake to dedicate half your take home to a mortgage, yikes.

Cathan said:

As I keep thinking about that how can you be scared to buy a house for twice your income? Is it the taxes and insurance? I think taxes here are around $5k/year, maybe twice that. Insurance isn't terrible - estimated at $150/month. I have about $15k in student loan debt is all, car's been paid off for 5 years. Are you not sure your jobs are stable?

To me, worst case scenario is I realize I've pushed myself too far, I dial back my savings and retirement contributions, the raises come in the next few years automatically and I manage where I'm at or sell the place or get promoted or take a new job elsewhere that pays for my permanent change of station (sell my house, closing costs, whole 9 yards) or I go to Afghanistan for 6 months or a year and rebound with that 2.5x standard pay over there. Hell, thanks for making me think through all my options lol. There are actually a lot of outs in case I do get in too deep.

I really don't spend a lot of money either. I hate clutter. I drive an accord that's paid off with only 85k miles on it. I grew up poor. Stuff doesn't make me happy but I would like to have a nice house and stop paying rent.

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Well, some of the reasons might sound strange to people, to be perfectly honest. No, we aren't necessarily worried about our jobs. However, they are sales positions and in the current market, sales are harder (financial services). My wife's company has a 401k and a pension (super rare) but I have nothing through my company so I have to save and fund my own retirement. We like to travel since we don't have kids. In a normal year, that would mean one international trip for a couple of weeks and several North American/Hawaii/Caribbean trips per year. For me personally, I had very little growing up and I've always worried about losing everything so I am more frugal about some things that most people.

In any event, everyone sharing ideas and advice here is really helpful and appreciated.

Commuting an hour each way every day to work will take a toll on your mental well being. It's a big time stress inducer.

Having the large majority of your paycheck get sucked down by your home to the point where you're living paycheck to paycheck will take the same toll on your mental well being.

At least with the commute you're not risking your entire financial future and ability to retire.

Went out to Woodbridge yesterday. I found one house I love on 1.22 acres. Needs a big soaking tub put in it but it's an awesome house well below $600k too... Realtor showed me a bunch of other houses in Woodbridge that frankly kinda sucked. The house would be nice but holy fucking shit neighbors are literally up your ass. I understand the concept of housing developments from the developer perspective... I am a civil engineer so more lots = more money but my god who wants to look out of your windows and see into your neighbor's home 10 feet away?

We're going out toward Stafford today. I'm going to seriously have to think about the commute. One property is $487k I believe for a really nice house on 10 acres. That's enough land to actually consider breaking off a chunk of an acre or 3 on a corner far away and building a house to sell, or build my dream house and sell this first one.

The commute could be 2 hours each way 3 days/week but I was thinking through options on that. For one, get up early... Work out at lunch in the office to help break the day up. Finish the work day - do a lot of reading on the train... I have friends/coworkers that live in DC closer that I could see about swapping a couch surf day at their place for coming out to the country whenever they want to get away from everything. Just turning things over in my head is all.

Home shopping is really fun. At least it is here in Virginia. I wasn't all that thrilled with apartment shopping in NYC...

The realtor asked me what I felt comfortable paying for a mortgage so I started breaking out my finances looking at a lot of options to move things around, what I've lived on, what the next few years' raises look like... This isn't to justify paying more because I honestly don't think I'm going to get anywhere near $600k at this point. That said, one thing I noticed is I don't think I know how to spend money - meaning I grew up poor, we never took vacations, I always had food and a roof over my head but mom was generally at the cut off point for all the bills as a single working mom with no degree raising 2 kids by herself. She's intelligent but not ambitious. I've had to count my change out to eat a few times when things got rough between jobs before I finished college. Once I counted all the pennies out while I was eating one meal/day living on my own then borrowed $80 from my mom to get through until a near sure thing job started. I've talked for several months about buying gym equipment, a projection tv and some other large purchases but I can't part with the money. What if something happens... My vacations typically are back to stay with family in NC.
I used to go down to Mardi Gras each year and ride in a parade for about $2k total but I've done that several times since 2009 when I moved there that I'm kinda bored with it (haven't gone for 3 years now - could argue that was fortunate vs covid this year).

I still won't get near $600k but maybe I'm kinda pathetic at not doing more fun things in life that people tend to spend money on. My exwife always wanted to go on vacations but it never made sense to me based on our finances. How can you take a vacation or buy a new car when she's got $13k in CC debt? We paid that shit off first and I put a lot of work into her house (ours when I moved in, hers when we divorced lol).

Cathan said:

Went out to Woodbridge yesterday. I found one house I love on 1.22 acres. Needs a big soaking tub put in it but it's an awesome house well below $600k too... Realtor showed me a bunch of other houses in Woodbridge that frankly kinda sucked. The house would be nice but holy fucking shit neighbors are literally up your ass. I understand the concept of housing developments from the developer perspective... I am a civil engineer so more lots = more money but my god who wants to look out of your windows and see into your neighbor's home 10 feet away?

We're going out toward Stafford today. I'm going to seriously have to think about the commute. One property is $487k I believe for a really nice house on 10 acres.

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Yeah luxury homes built so close aren't luxury to me. Those sorts of neighborhoods usually have deed restrictions up the ass, too.

Speaking of space, I love it, but acreage can bring some upkeep challenges--more than just a bigger garden tractor and weedwhacker can handle. I pissed away a lot of money last year on storm-damaged trees. And you can run into surprises with things like utility lines being a private expense because they only serve your house.

Locnar said:

Thats funny, I live on acreage and have not owned a lawn mower in years. And fallen oaks fall where they may and stay there. Dying pine trees? Don't touch them, the snags make great wildlife/bird habitat and by the time they do fall over they are mostly hollowed out and light.

Goats (or whatever) and portable electric fence or netting is all you need. You got to live with the land , not fight it.

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Wish I had your lot. I feel like I bought mine right as all the mature trees' luck had run out. Some of it's layout, though. We had stuff still along driveway, near the house, and along utility lines. And then a couple of tornados came through.

The pines were no trouble in my experience. Easy to deal with when they age or fall, keep the ground around them in check, too.

EVERYTHING we saw today was a bust, literally everything. The listing agents really dressed the houses up to look like more than they really are - both my RE agent and I agreed on that.

It's all a learning experience though so I really don't mind. I learned a shitload about what I like, what I don't like, where homes are in my price range, what I absolutely don't want, where I may have to compromise, etc etc. Going by one house we saw another house had an open house so we stopped in. It listed for $837k waaaaay the fuck out in the boonies, probably $200-400k higher than any house in the area, literally. I didn't know that when we drove up. It had 3 fully finished levels with enormous rooms, incredible appliances and everything. The master bedroom/bathroom and closets were like holy fuck... It had so many damn rooms I was like what the fuck would do I with the half dozen rooms in the basement? Nothing??? It really did show me what truly nice can look like though.

The house I was MOST interested in today got pushed to the very end at 5pm when we started at noon. We get there and it looks nice. It looked amazing on MLS in the link the realtor sent me. We get inside and it's nice, really nice. I like most things about it. There's linoleum on the kitchen floor but that's just 1 problem - I can get that tiled. Go upstairs and there's linoleum in the master bathroom - ok 1 more section to tile. A few other small oddities like the huge window on the front of house is actually in the master closet, what the fuck??? such a waste but ok... whatever. I go out to walk the property and I walk passed this wooded line to find high tension power lines run RIGHT THE FUCK behind the house. I stand there thinking about it and thinking and finally it was just like fuck no am I going to want to look out there at them out the back of my house forever. Major dick punch at the end of the day.

I saw the house across the street FAR away from the power lines was for sale so I looked it up because I REALLY like the area. Holy motherfucker... it's close to the top of my price range (not $600k...) but it has a fucking pool in the back yard and it's waaaaaaaaay nicer. Going to go look at it tomorrow.