Author Topic: Updated! How much would you pay for stability (relocation to MN)  (Read 4819 times)

MayDay

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Updated below- post #19.

We are relocating to the Twin Cities.  The housing market there is insane.  We have 2 elementary school kids, one boy, one girl, one has autism.  The move is going to be hard enough as it is.  I am going to be back to work FT for the first time since my first kid was born (yet another transition).  I am supposed to start in 3 weeks.

We just got back from our house hunting trip.  We found one house we put an offer in on, and long story short, the sellers are being completely inflexible to the point that our realtor says they are unreasonable even considering the hot market.  He is worried that even if we agree to their price, they will refuse to budge on inspection and appraisal issues if there are any.

We looked over the house carefully and are pretty sure it needs 2 new chimney caps (I assume this is fairly cheap) and possibly has water damage in the chimney due to the missing caps (I assume this could be more expensive).  The other mystery is some possible water damage on the wall behind the bathroom.  It is the original bathroom and preserving the vintage tile is important to us, so it could be a pricey fix, or it could be nothing.  It is the only shower in the house, so we can't just not use it indefinitely. 

We are talking about paying 20-30K (my guess- 10-20K of overpaying plus 10K in repairs) over market on a 340K house if we really want it. 

The 4 alternatives are:

1.  H and I go and stay in a residence Inn or something and keep looking while the kids stay with my parents for the summer and my cousin is their nanny (risks:  kids flip out due to lack of consistency, still don't find something and then we can't even get an apartment by school start, as apartments are already booked out to Aug 1 or Sept 1.)  Cost of residence Inn or Airbnb room = ????

2.  Rent older 2 bedroom apartment sight unseen, 12 month lease.  I think this provides some stability for the kids, and is cheap (1000 a month) but I think both the adults and children will lose their everloving minds in a tiny apartment in a MN winter.  Our kids also do not do well sharing a bedroom, which we all kids *can* share, and that it is character building, etc etc, but fuck me if I want to go through a year of that. 

3.  3 month lease on a "luxury" building at 2100 a month rent, month to month after that at even higher rent, and a ton of red flags that management is shitty in terms of property upkeep, and will swindle us any chance they can get. 

4.  We did find one house for rent, 2000 a month, crappy rental house, and the landlord was pretty clear that she wants longer term tenants and won't let us out of the lease early.  On paper I feel like this makes the most sense, but for some reason H and I are both really resistant.  I don't know why.  She also might not even rent it to us since we were very frank with her that we were trying to buy a house and asked her questions about if we could have a shorter lease or get out of the lease. 

Financially, we have the full 20% DP saved, but it will take most of our brokerage account and we'll need to resave an emergency fund.  My salary will be 90K and H makes 125K. 





« Last Edit: July 02, 2017, 09:04:50 PM by MayDay »

Bucksandreds

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If you love the house then enter into contract. If the inspection is a problem then back out. Spending $12,000 to rent an awful apartment for 12 months is not a good idea. overpaying $10-$20,000 on a house you "Love" is not much in the grand scheme of things.

Lady SA

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I always advocate renting for a year when you relocate so you can scope out neighborhoods, school districts, etc.

Are the jobs in St. Paul or Minneapolis or a suburb?
What area are you looking for houses in? There are certain neighborhoods that are insane, but others that are much more reasonable.

1. I would personally not do this because of said renting for a year.

2. MN winter is really not that bad. The apartments will have heating :) Many Minnesotans get out and enjoy the outdoors even in winter (skiing, sledding, building snowmen!), so don't count on being cooped up for 4 months. Get everyone good coats and snowpants and you'll be running around outside with no problem. Even though the kids might complain about sharing a room, I really think this option is your best bet (cheaper rent in the short term, gives you time to really find a house you like). You can do things to separate the sides of the room to make it more manageable and give both kids their own space. With 2 kids, I would absolutely do this, with 3 I would not (unless the 3rd was an infant, in which case the baby would sleep with mom and dad).

3. I see this as the same option as above except slightly more space and a lot more money. Ok, sounds like you are talking about one particular place, where the heck are you looking? There are many, many reputable and reasonable places out there, are you only looking in one place??

4. Don't do this. Your gut is telling you no for a reason. No matter what paper tells you, follow your gut. Your gut is telling you this is a bad idea.

MayDay

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I always advocate renting for a year when you relocate so you can scope out neighborhoods, school districts, etc.

Are the jobs in St. Paul or Minneapolis or a suburb?
What area are you looking for houses in? There are certain neighborhoods that are insane, but others that are much more reasonable.

1. I would personally not do this because of said renting for a year.

2. MN winter is really not that bad. The apartments will have heating :) Many Minnesotans get out and enjoy the outdoors even in winter (skiing, sledding, building snowmen!), so don't count on being cooped up for 4 months. Get everyone good coats and snowpants and you'll be running around outside with no problem. Even though the kids might complain about sharing a room, I really think this option is your best bet (cheaper rent in the short term, gives you time to really find a house you like). You can do things to separate the sides of the room to make it more manageable and give both kids their own space. With 2 kids, I would absolutely do this, with 3 I would not (unless the 3rd was an infant, in which case the baby would sleep with mom and dad).

3. I see this as the same option as above except slightly more space and a lot more money. Ok, sounds like you are talking about one particular place, where the heck are you looking? There are many, many reputable and reasonable places out there, are you only looking in one place??

4. Don't do this. Your gut is telling you no for a reason. No matter what paper tells you, follow your gut. Your gut is telling you this is a bad idea.

We lived here until 5 years ago so we are familiar with the area.  I think that affects the usual advice to rent.  I am very familiar with the winters, and although I enjoy xxskiing, etc.  I don't know if it is just my kids, but liking to go sledding or whatever does not seem to translate to them dealing well with tiny indoor spaces and needing to put on lots of winter gear to play outside.  Partially that is probably because it is a shit ton of work for me to kit them up, and then in 20 minutes they want back in, and I have to deal with piles of wet gear, and demands for cocoa. 

H will be working from home.  I will be in Stillwater.  We are very committed to being central (might change jobs at some point), being in a walkable/bikable area, and being in certain school zones which obviously hugely limits options. 

Option 3 is one specific apartment building, the only one I could find with shorter leases in the school zones we are looking in. 


scantee

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Whereabouts are you looking in Minneapolis? Minneapolis proper or a surrounding suburb? I'm in SW Minneapolis and I've noticed that in just in the past month or two, the housing market has cooled down ever so slightly. Houses aren't going quite as fast as they were even a few months ago. Some are sitting on the market for more than a month and need several price drops to sell. I would hesitant to pay $20k more for a house that wasn't even in some sort of bidding war. That said, when I bought my house a few years ago I overpaid a bit (maybe $5-10k) because I was in a similarly urgent situation. I don't have any regrets about that.

Do you have an extra week or two to look? I feel like there will be many new houses coming on the market in the next couple of weeks. Maybe that's not an option for you, since you're out-of-state and wouldn't be able to see them anyway. But that would give you some time to not feel forced into overpaying for a house that you're not 100% about.

Were I in your situation, I would look more for short-term rental options that would allow you to get here and have a place to stay while you look for something more long-term. Your employers might be of assistance here, if they have existing connections with companies that do long-term corporate housing.

Lady SA

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We lived here until 5 years ago so we are familiar with the area.  I think that affects the usual advice to rent.  I am very familiar with the winters, and although I enjoy xxskiing, etc.  I don't know if it is just my kids, but liking to go sledding or whatever does not seem to translate to them dealing well with tiny indoor spaces and needing to put on lots of winter gear to play outside.  Partially that is probably because it is a shit ton of work for me to kit them up, and then in 20 minutes they want back in, and I have to deal with piles of wet gear, and demands for cocoa. 

H will be working from home.  I will be in Stillwater.  We are very committed to being central (might change jobs at some point), being in a walkable/bikable area, and being in certain school zones which obviously hugely limits options. 

Option 3 is one specific apartment building, the only one I could find with shorter leases in the school zones we are looking in. 

Ok, this does change my advice. Since you are familiar with the area (that wasn't clear in the OP), then renting doesn't make as much sense.
If you are constrained to Stillwater, then I think I might go with the keeping the kids with your parents and staying for a few weeks while you search for a place where you guys could be happy -- meaning both rentals and houses (with the goal of finding something before the school year). Obviously, if the idea is to stay here long term, a house would be good, but if the market is as ridiculous as you say, I would also keep my eye out for appropriate rentals that pop up.

MayDay

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We will stay in Mpls permanently.  We will probably sell the house at age 65-70 and get an old folks condo, but we aren't moving out of a house before then.

My company has intern apartments that we could stay in, but they are in the wrong school zones, so it is similar to option 1 of H and I staying somewhere for the summer and my parents taking the kids.  We would HAVE to have something in the right school zones by Sept 1, and to get that we need to sign a lease now.  So the problem is that if H and I go look for a bit and don't find anything, we may now not be able to get an apartment by the time school starts.

scantee, I agree that the market seems to have cooled slightly, but these sellers obviously don't need to move urgently. We are looking in the north central metro, first ring suburbs mostly (being in a dense area with good parks and shops, etc wthin walking distance is important, and on bus lines, so we aren't considering further out suburbs).  Basically the central southern half of Roseville, SAV, and New Brighton.  those give me a 30 minute commute, H will work from home, and we will later be able to take a job anywhere in the metro.  We are not at all considering Woodbury, Stillwater, etc as the whole point of moving is to be back near a city, not in a far flung suburb.

scantee

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I just looked up the house you mentioned. (Is that creepy? Apologies in advance if it is!). I agree that it is seriously overprices. My good friends live in SAV, plus I seriously looked there three years ago when I was buying, and I really think you can get just as nice of a house there, for that price or even less, that does not back up to a big condo building. Month-to-month rental would be my first choice were I in your situation, but I know that is much easier said than done!

MayDay

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I just looked up the house you mentioned. (Is that creepy? Apologies in advance if it is!). I agree that it is seriously overprices. My good friends live in SAV, plus I seriously looked there three years ago when I was buying, and I really think you can get just as nice of a house there, for that price or even less, that does not back up to a big condo building. Month-to-month rental would be my first choice were I in your situation, but I know that is much easier said than done!

Not (too) creepy :)

I called the short term apartments back and told them I will not rent without knowing my month to month price is the same as my 3 month lease price and they agreed.  They also told me all the rental prices are dropping by about 100$ effective today.  H and I have to discuss tonight, but I am guessing that is what we will go with.  I do not want to rent AGAIN and move AGAIN but I am sure it is the best (non-emotional) decision.

birdiegirl

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Do you really love the house?   I get the sense maybe you don't.   If that's the case, the short term rental definitely seems like the best solution. 

If you truly love the house and would be sad to lose it, you could go forward with the inspection so you are armed to negotiate with the sellers for repairs.  They might be willing to budge and at least you'd have a better sense of the cost of all the repairs needed.   Make sure your offer is contingent on inspection and appraisal/financing of course. 

I feel for you...we went through a similar thing last year with difficult sellers.  But we loved the house and we had been looking for almost a year, so we conceded on the inspection items ($7-10K).  Looking back I think we made the right choice but it was extremely stressful and we weren't even dealing with a timeline like you are.   

Blonde Lawyer

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My preferences are not one of your listed options so I'm not sure what I'm missing.

(1) take a trip out there, even if it is just one of you to apartment hunt.  Find a 3 bedroom that you stay in for a year or 2 until you buy.

(2) Take the kids with you when you stay in a Residence Inn.  Get a suite with adjoining rooms.  Pick out the apartment/house together. Kids love hotels! There's a pool!

Zero Degrees

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Hey MayDay. I hopped over here after reading your comment on my thread in the Real Estate Forum. It's too bad you ruled out suburbia. My house is going on the market late summer/early fall and has one of the best school districts in the state. Your kids would love all the amenities offered in my little community.

It's funny that I am moving so that I can downsize and rent now that I am nearly an empty nester.

I wish you luck!

 

MayDay

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Hey MayDay. I hopped over here after reading your comment on my thread in the Real Estate Forum. It's too bad you ruled out suburbia. My house is going on the market late summer/early fall and has one of the best school districts in the state. Your kids would love all the amenities offered in my little community.

It's funny that I am moving so that I can downsize and rent now that I am nearly an empty nester.

I wish you luck!

Well we want to downsize from what you have! We are looking for a main level of 1200-1500 sq ft, plus basement. Whar suburb is your house in?

MayDay

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My preferences are not one of your listed options so I'm not sure what I'm missing.

(1) take a trip out there, even if it is just one of you to apartment hunt.  Find a 3 bedroom that you stay in for a year or 2 until you buy.

(2) Take the kids with you when you stay in a Residence Inn.  Get a suite with adjoining rooms.  Pick out the apartment/house together. Kids love hotels! There's a pool!

1. There are no 3 bedrooms available. I've called everywhere. There is a 2 bedroom +den in a smoking building.

2. This is a potential option but H and I will both be working full time, so we would have to find a daycare center of summer camp program that can handle our autistic child. I am going to look into this. My parents are 3 hours away and my cousins can nanny the kids, and H and I would come back for the weekends. That might be a better choice. Depends on what I turn up for childcare options here. Our experience with Y daycamp type programs has been mixed.

Laura33

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Will your company pay for a Residence Inn or short-term rental?  We got 3 months in a Residence Inn as part of the relocation package when we moved out here (which we ended up extending a bit on our own dime, as it was 2004 and sort of near the height of the crazies).

If this is your permanent home, don't rush into something that you don't love and don't feel good about.  I like the Residence Inn idea, either for you or for the whole family -- for me, having maid service, breakfast provided every day, and "snacks" (a/k/a dinner) several times a week was freaking awesome.  Not to mention the pool for the kiddo and on-site laundry.

NextTime

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In most situations I'd tell you most kids are resilient and adapt quickly to change, so it wouldn't be a big deal if they switched apartments/houses/schools at their age. My son will be going to kindergarten next year and has changed pre K/day care every year for the past 4 years.

However, you mentioned that one of your children has autism. I'm not an expert on autism, but I know most autistic children need a higher degree of stability to function at their best. Not knowing your situation, I'd say you have to decide whether the children can handle that type of change.

omachi

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Housing in the Twin Cities seems to be going a little crazy. I know somebody that put their house on the market and had an offer for $20k over the listed price in a mere 8 hours. This wasn't some fancy or well updated house, and it wasn't put on the market at a silly low price to move it.

If you've found a place you love and aren't planning to move from there, I'd make a higher offer in your shoes. The opportunity cost of finding something else includes the search, cost of another move, missed equity if you rent, and upsetting your sanity and stability when you do move. If you haven't found something you love, how much time do you have?

Also consider expanding the search to the suburbs inside the 494/694 loop. Depending on where the jobs are, you can find a suburb that is still bikeable to downtown or will take 15-20 minutes of driving depending on traffic.

Finally, some kids don't take well to a parent moving away for a period of time. My niece flipped out when my sister moved ahead of her family for a month. Could hardly be pried off for a couple months once reunited. If stability is important, I'd be wary of option 1.

Cyanne

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School zones don't have to be a limitation if you are willing to do open enrollment. The downside is that you have to provide your own transportation. I did it with my kids. Live in one school district but open enrolled them into a different district. This way you can have more options for renting while you look for a house located in a school district you want to live in.

MayDay

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School zones don't have to be a limitation if you are willing to do open enrollment. The downside is that you have to provide your own transportation. I did it with my kids. Live in one school district but open enrolled them into a different district. This way you can have more options for renting while you look for a house located in a school district you want to live in.

2 of the 3 districts we are looking at have closed open enrollment. The other has at least 3 of the elementary schools closed to open enrollment. We also will probably depend on bussing since we both work full time. 

MayDay

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Re: Updated! How much would you pay for stability (relocation to MN)
« Reply #19 on: July 02, 2017, 09:04:33 PM »
Updates galore!

We set the short term apartment option into motion. Luckily for us they love like molasses in winter. Still haven't actually gotten the lease although we know we are approved.

Meanwhile the house we loved came back to us. So I summary, listed at 345, on market for 30+ days in hot market, we offered 320, they countered No, we offered 335, they countered No. They came back after a week at 340. We said no. They came back after another week and took our offer of 335.

Did inspection and some moderate electrical issues. We had an actual electrician come give a quote. About 5k needed to bring it up to code. This was mostly that the electrical panel was in a bathroom and needed to be moved out.

They said No.

We ran up to MN tonight to see a new listing. We have until midnight Tuesday to either buy the first house as is at 335, or cancel the contract.

Here is the low down:

335k house is 1600 or 1800 sq ft, 4 bed 2 bath, larger kitchen, more closets. Basement is nicer with a higher ceiling.  2 car garage. Yard is a bit odd as it is corner lot and hilly. We think no water in the basement. Backs up to condo building and new apartment development which we don't mind but our realtor thinks that is why it is sitting.

New house: 250k. Will probably offer 240k. 1100 sq ft, 3 bed/1 bath, smaller bedrooms and closets. Kitchen very small with limited counters and no dishwasher. No hardwood under half the floors. Major bummer is the basement ceiling is super low, and definitely gets a little water in one part, aka we will be drain tiling. Much better location and yard.

The main debate is whether we are being ridiculous be to want a touch more space. We would probably put a sunroom type addition on the back with an estimated price tag of 30k.  Someday. And possibly do something to the kitchen to add dishwasher.

We have two kids, 9 and 7.

H works from home for now. His desk will be in the guest room or master bedroom depending on house.
« Last Edit: July 02, 2017, 09:07:37 PM by MayDay »

SingleMomDebt

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Re: Updated! How much would you pay for stability (relocation to MN)
« Reply #20 on: July 02, 2017, 10:30:10 PM »
So can you offer 330 since they won't pay for the electrical? My thought is they will say no, but come back with a yes a few days out because your offer is good. their bad: on the market 30+ days. their good: they know you are on a time crunch. but if you can hold out...

if you plan to stay long term, then I say the bigger house. With you DH working from home and the kids nearing their tweens, everyone is going to need their space. You might be hiding in a closet for a few minutes of peace. ;)

best of luck!

Mgmny

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Re: Updated! How much would you pay for stability (relocation to MN)
« Reply #21 on: July 03, 2017, 05:42:11 AM »
I wouldn't purchase either of those houses - sounds like you're settling on each.

The real estate market here IS crazy. If I were you, I would consider cold-calling or knocking on doors in the neighborhood (s) you're interested in. Use Zillow to find houses that people have lived in for awhile (10+ years) and tell them how much $$ their house is probably worth. Because of the hot real estate here, people might be enticed to sell you your home because they didn't realize how much they could get. You're looking for empty nesters who could downsize. This will take guts and confidence, but you have literally nothing to lose except time. Odds are your perfect home is out there, but probably not listed on the MLS.

You'll want to ask if they know anyone around considering to sell their house ("Dorothy next door has been talking about moving closer to her son in Lakeville for years!"). You could even bring your kids to help sell the image of the vibrant family moving into their house. This July 4th weekend would have been perfect, but you've got other options.

No one has mentioned this, but you really don't need to buy a house until labor day when school starts again for the fall, so the school district your temporary home is in really doesn't for another 2 months.

scantee

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Re: Updated! How much would you pay for stability (relocation to MN)
« Reply #22 on: July 03, 2017, 09:16:36 AM »
Were I in your situation, I think I'd go with the $250k house, knowing that I'd probably drop around $50k into it over the next couple of years to make updates. It is so rare to find a house in decent shape, in a good neighborhood, for that price. Your PITI would be like $1200/mo for a 30 year mortgage!  If you make some updates to this place, you could probably turn it around in a few years for a nice profit, should you decide at some point that you want more space.

You said the basement has low ceilings. Are they so low that it would difficult to put in a bathroom? I think that would be the deal breaker for me, plus your need for a home office. I'm guessing the basement will become the main kid hang-out area and it will be really nice to have a second bathroom down there.  Put in a basement bathroom, add drain tile, hardwood floors in the upstairs areas that lack it, simple update to the kitchen, maybe another egress window in the basement, then a sunroom. Those would be the updates I'd do and I think it would be a very livable space even as your children become teenagers.

My friends live in a very similar house to the $250k one, in St. Anthony, with two kids the same age as yours. They are very happy with it and have no plans to move, ever.

How does your spouse feel about having an office in the same space as your bedroom?

Did you look at the one on 33rd? That seems to have what you're looking for and is in the price range of the $335k house, but in a better location.

(I'll just be over here, playing realtor over the internet...)

MayDay

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Re: Updated! How much would you pay for stability (relocation to MN)
« Reply #23 on: July 03, 2017, 11:37:12 AM »
We looked at the one on 33rd and it was in fairly rough condition.  For example, the kitchen cabinets are "new" but they are cheapo laminate and the white finish is peeling and chipped in a lot of places. The bathroom tile was coming off the wall. Etc.

We could theoretically add a basement bathroom to the 250k house. Of course we haven't gotten an actual plumber to look at it yet.

We drove by both houses this morning. With fresh eyes we are pretty confident we are going with the 335k house.