Author Topic: House buying: Now or wait and keep renting  (Read 7034 times)

Wolf_Stache

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House buying: Now or wait and keep renting
« on: February 06, 2014, 10:45:49 AM »
Hi all. I need some advice about buying a house. Here is the info:

I make about $68K per year as a Financial Accountant. I live in Seattle and am currently renting a house. House was built in 1910 - still has all the original single pane windows so it gets really drafty and cold.

Rent: $1000 a month
Utilities at rental house -
Water ~ $160 a month (billed every other month)
Electricity ~ $140 a month (billed opposite months from the water)
Gas $80 a month

Total with all utilities - $1380

I suspect my rental house has a water leak as the driveway is always flooded. We had people come out and look at it, but they couldn't determine if it was really a leak or if it is just water pooling. I still suspect a leak, as we don't water the lawn and I really doubt I use that much water just doing dishes and showering (no dishwasher).

House has LOTS of other problems, and landlord is slow to respond (for example, the gutters FELL OFF the house a few months ago... they are still sitting in the lawn.)

I can't find a new place to rent - I've been searching for a year. Reason: I have three cats and a dog. The rental market in Seattle with Pets is almost non-existant.

I'd like to buy a house however, I don't feel comfortable, alone at my salary, spending more than $150K, but I've been looking for a few months and can't find anything under 200K. I refuse to look at Condos/townhouses, due to a nightmare inducing experience with first place I owned (I won't go into details, but lets just leave it at cop shooting neighbors attacking me as the cherry on the shit cake)

I was pre-approved for $250K with a 5% downpayment.

I have $15K cash for the downpayment, and $60K sitting in a 401K that I could take a loan out of.

Should I just tough it out for a few more years until I can get a bigger downpayment and buy a bigger place? Or should I take a 401K loan?

Other options I've considered is moving out of Seattle, but I REALLY like my job currently, and don't want to leave it. Also not sure where I would go.

Numbers Man

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Re: House buying: Now or wait and keep renting
« Reply #1 on: February 06, 2014, 10:52:26 AM »
1) Buy your own place
2) Don't touch the 401(k)
3) You are making an awesome salary at the age of 25. Your income is heading higher
4) You'll have a secure home for your pets w/o worrying about landlords or the tight rental market

Wolf_Stache

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Re: House buying: Now or wait and keep renting
« Reply #2 on: February 06, 2014, 11:02:40 AM »
1) Buy your own place
2) Don't touch the 401(k)
3) You are making an awesome salary at the age of 25. Your income is heading higher
4) You'll have a secure home for your pets w/o worrying about landlords or the tight rental market

I'm actually 33.

But yeah, the rental market here is crazy. The apartment I was renting before the house was also $1000 a month, had rats and black mold, the neighbors were drug dealers, and someone broke down the 3" STEEL security door (and I only lived there 5 months!)

I'm also wondering though if I should wait. The downpayment will eat up all my cash, leaving me with no emergency fund.

I could get a cheaper house if I go farther out, but I currently ride my bicycle to work and want to keep doing that....

soccerluvof4

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Re: House buying: Now or wait and keep renting
« Reply #3 on: February 06, 2014, 11:05:59 AM »
Buy your own place but be patient in the purchase and agreed Dont touch your 401k. In the meantime i would be very aggressive on that water issue because that's insane per month for a water bill.  Tough to rent with that many animals.

Eric

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Re: House buying: Now or wait and keep renting
« Reply #4 on: February 06, 2014, 11:16:48 AM »
I would stick it out.  It doesn't sound like you're that close to being able to afford to buy anything decent without moving far away from your job.  That said, the water bill is out of control.  You have to have a leak somewhere.  I also think you need to find a way to seal your house better so it's not so drafty.  Heavy curtains or that plastic sheeting might be your answer here.  I would find the local tenants rights organization and contact them to see if they have advice on any of these repair issues.  Leaking water that's causing your bill to be so high would be something that the landlord needs to fix right away in my estimation.  If s/he doesn't, in most areas, you can have it fixed and deduct the amount from your rent.  Again, find your local tenants rights organization to find out what your options are.

Numbers Man

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Re: House buying: Now or wait and keep renting
« Reply #5 on: February 06, 2014, 11:24:02 AM »
1) Buy your own place
2) Don't touch the 401(k)
3) You are making an awesome salary at the age of 25. Your income is heading higher
4) You'll have a secure home for your pets w/o worrying about landlords or the tight rental market

I'm actually 33.

But yeah, the rental market here is crazy. The apartment I was renting before the house was also $1000 a month, had rats and black mold, the neighbors were drug dealers, and someone broke down the 3" STEEL security door (and I only lived there 5 months!)

I'm also wondering though if I should wait. The downpayment will eat up all my cash, leaving me with no emergency fund.

I could get a cheaper house if I go farther out, but I currently ride my bicycle to work and want to keep doing that....

Whoops - Sorry for that misread on the age. Someone broke into your house? I would move ASAP. I wonder if the general lack of upkeep (gutters on the ground forever) made it seem like the house was empty.

Eric

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Re: House buying: Now or wait and keep renting
« Reply #6 on: February 06, 2014, 11:33:23 AM »
1) Buy your own place
2) Don't touch the 401(k)
3) You are making an awesome salary at the age of 25. Your income is heading higher
4) You'll have a secure home for your pets w/o worrying about landlords or the tight rental market

I'm actually 33.

But yeah, the rental market here is crazy. The apartment I was renting before the house was also $1000 a month, had rats and black mold, the neighbors were drug dealers, and someone broke down the 3" STEEL security door (and I only lived there 5 months!)

I'm also wondering though if I should wait. The downpayment will eat up all my cash, leaving me with no emergency fund.

I could get a cheaper house if I go farther out, but I currently ride my bicycle to work and want to keep doing that....

Whoops - Sorry for that misread on the age. Someone broke into your house? I would move ASAP. I wonder if the general lack of upkeep (gutters on the ground forever) made it seem like the house was empty.

I think you need some coffee or something.  Maybe a nap.  :)

Wolf_Stache

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Re: House buying: Now or wait and keep renting
« Reply #7 on: February 06, 2014, 11:34:13 AM »
1) Buy your own place
2) Don't touch the 401(k)
3) You are making an awesome salary at the age of 25. Your income is heading higher
4) You'll have a secure home for your pets w/o worrying about landlords or the tight rental market

I'm actually 33.

But yeah, the rental market here is crazy. The apartment I was renting before the house was also $1000 a month, had rats and black mold, the neighbors were drug dealers, and someone broke down the 3" STEEL security door (and I only lived there 5 months!)

I'm also wondering though if I should wait. The downpayment will eat up all my cash, leaving me with no emergency fund.

I could get a cheaper house if I go farther out, but I currently ride my bicycle to work and want to keep doing that....

Whoops - Sorry for that misread on the age. Someone broke into your house? I would move ASAP. I wonder if the general lack of upkeep (gutters on the ground forever) made it seem like the house was empty.

No, the break in was the apartment I had before I moved into the house. I was saying it was the same price per month as the house, but the situation was way worse.

Wolf_Stache

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Re: House buying: Now or wait and keep renting
« Reply #8 on: February 06, 2014, 12:00:46 PM »
I would stick it out.  It doesn't sound like you're that close to being able to afford to buy anything decent without moving far away from your job.  That said, the water bill is out of control.  You have to have a leak somewhere.  I also think you need to find a way to seal your house better so it's not so drafty.  Heavy curtains or that plastic sheeting might be your answer here.  I would find the local tenants rights organization and contact them to see if they have advice on any of these repair issues.  Leaking water that's causing your bill to be so high would be something that the landlord needs to fix right away in my estimation.  If s/he doesn't, in most areas, you can have it fixed and deduct the amount from your rent.  Again, find your local tenants rights organization to find out what your options are.

I've never lived in a stand alone house before, so wasn't sure if that was normal or not.

I didn't think it was but like I said, the plumber I brought in did a dye pack in the toilet. He looked for that color in the driveway, but the water just ran clear so he said it wasn't a leak.

But maybe its leaking on its way in?

I'd be more ameniable to continuing to rent if the utilities weren't so high and if I could actually get issues fixed in a timely manner.
« Last Edit: February 06, 2014, 12:03:50 PM by GamerGirl »

skunkfunk

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Re: House buying: Now or wait and keep renting
« Reply #9 on: February 06, 2014, 12:13:06 PM »
I wish somebody had told me to keep renting. I never imagined how much having this stupid house could cost, and the payback period on it is so long as to be non-existent at this point.  I'd have much more flexibility if I were renting.

Just my two cents.

Eric

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Re: House buying: Now or wait and keep renting
« Reply #10 on: February 06, 2014, 12:21:18 PM »
I've never lived in a stand alone house before, so wasn't sure if that was normal or not.


I'm sure this varies by area of the country, but you're not exactly in the desert up there.  Do you know any of your neighbors well enough to ask to see their bills?  If not, maybe this is a good opening to make some friends.

Wolf_Stache

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Re: House buying: Now or wait and keep renting
« Reply #11 on: February 06, 2014, 12:29:55 PM »
I've never lived in a stand alone house before, so wasn't sure if that was normal or not.


I'm sure this varies by area of the country, but you're not exactly in the desert up there.  Do you know any of your neighbors well enough to ask to see their bills?  If not, maybe this is a good opening to make some friends.

Oh, thats an idea. I'm passing acquantances with one neighbor. I'll ask her next time I see her.

To compare, I was in charge of the finances of my condo association. Our water bill (Salt Lake City, UT) for 8 units was $50 a month. I know my boyfriend told me water is more expensive here, so I talked myself into believing it must be normal water bill in Seattle after the plumber told me there wasn't a leak.

And maybe I'll call a different plumber and see if they have any suggestions as well.
« Last Edit: February 06, 2014, 12:33:50 PM by GamerGirl »

MsSindy

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Re: House buying: Now or wait and keep renting
« Reply #12 on: February 06, 2014, 12:37:52 PM »
It's unfortunate that your current renting situation sucks, but you're not quite ready for home ownership yet.  Some of the things to consider about home ownership: you'll need more than just the down payment for closing costs, also figure in real estate taxes (school, county, township, etc), if you're not putting down 20%, figure on paying PMI insurance.  There are plenty of calculators out there to figure the PI, it's usually the rest of the stuff that people don't take into account.

Also, you need to figure in maintenance costs.  What kind of condition is a house for $200 - $250K?  Can you fix things?  If not, you'll be paying to have these things fixed.  For example, if your gutter fell off, can you fix it, or would you have to call someone?  Do you need a garden hose, lawnmower, curtains, etc.?  These things all add up.

I'd save up more money for a down payment, make sure that I had some float money, and really, really, know exactly how much I would need to budget to purchase a house.  You can do it, I just think you're too close to the edge.

Also, when you buy a house, think about taking on a roommate to reduce the cost.....or find someone who is handy to rent a room.

TLV

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Re: House buying: Now or wait and keep renting
« Reply #13 on: February 06, 2014, 12:41:26 PM »
Your water bill should have some kind of break-down of base charges vs. usage charges. Our water bill out in Bellevue is a similarly high $125ish per month, but only $20 is our water usage. The rest are base charges and the sewer charge (which is based on last year's [previous tenant's] usage).

soccerluvof4

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Re: House buying: Now or wait and keep renting
« Reply #14 on: February 06, 2014, 12:41:39 PM »
There is no justifying that water bill. I agree with Eric completely! I have 6 peeps in my home (and i have a week bladder! lol)  and i pay what you pay quarterly in a expensive water bill area!

soccerluvof4

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Re: House buying: Now or wait and keep renting
« Reply #15 on: February 06, 2014, 12:43:37 PM »
Your water bill should have some kind of break-down of base charges vs. usage charges. Our water bill out in Bellevue is a similarly high $125ish per month, but only $20 is our water usage. The rest are base charges and the sewer charge (which is based on last year's [previous tenant's] usage).

I lived there for a year in the Navy back in 82"...

Anyhow this could be what its all about..Knock on a neighbors door!

sassy1234

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Re: House buying: Now or wait and keep renting
« Reply #16 on: February 06, 2014, 06:29:13 PM »
It might not be a leak.  We had this issue in our house. We had a plumber out for another issue and we mentioned it.  He said it was a water pressure issue.  He installed a regulator type of thing, and it reduced the speed, flow of water into the house.  Our water bill decrease from $400 every 3 months to $120 every 3 months.  Much better. 

needmyfi

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Re: House buying: Now or wait and keep renting
« Reply #17 on: February 06, 2014, 06:49:33 PM »
If you have been preapproved for 250000, have you looked at any properties in that price range that have rental income, like a duplex or house with a garage apt?  Don't know a thing about real estate in your area, but bought a fourplex when I was younger at the very top of my range and it worked out really well for me.  I got a better neighborhood, still got lower interest rates and lower insurance of owner occupied.  Paid it off in 11 years and never put any money at all toward the note, rents covered everything. I bet if you allow pets you will have a zero occupancy rate.

Wolf_Stache

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Re: House buying: Now or wait and keep renting
« Reply #18 on: February 06, 2014, 07:13:29 PM »
Your water bill should have some kind of break-down of base charges vs. usage charges. Our water bill out in Bellevue is a similarly high $125ish per month, but only $20 is our water usage. The rest are base charges and the sewer charge (which is based on last year's [previous tenant's] usage).

I pulled the bill out when I got home. Is this normal?

No. of Days: 60 (this is billed every other month)
Consumption in gals: 8228
Ave consumption/day: 137.13 gal?!?!?!?!?!?!?!?

That can't be right, can it? WTF? How the F**** would I be using almost 140 gal of water a day?

Anyway, here is the rest of the bill:

Water service
CCF Usage 11 @ 4.5 + service charge $27 = $76.50 for water

Sewer usage 11 @ 11.65 = $128.15 for sewer

Solid waste - Mini garbage $45.80
Yardwaste - $19

Total bill for Nov/Dec = $269.45. And this was a low one.

What is 11 CCF? How do I bring that number down?

bikebum

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Re: House buying: Now or wait and keep renting
« Reply #19 on: February 06, 2014, 07:45:10 PM »
if you're not putting down 20%, figure on paying PMI insurance.

Yes, and PMI sucks big time! Definitely know what you are getting into. When I bought my house, the lenders talked about PMI like it's nothing. I had to ask pretty specific questions to understand what was being offered. I waited til I had 20% and I recommend the same to everyone else. If you put less than 20% down, you pay PMI until you have 20% of equity in the home, which takes a LONG time since your early payments go more to interest than principal. I think there is usually a 5 year minimum on PMI too, so you may not be able to make extra payments to get out of it. One estimate I got was something like $100 or $150 a month for PMI on a loan for less than $120K. Ripoff!

Someone please correct me if I'm wrong. This is all anecdotal and from memory.


SoftwareGoddess

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Re: House buying: Now or wait and keep renting
« Reply #20 on: February 07, 2014, 12:33:53 PM »

No. of Days: 60 (this is billed every other month)
Consumption in gals: 8228
Ave consumption/day: 137.13 gal?!?!?!?!?!?!?!?

Sounds a bit high. We currently use around 7500 gallons in a similar period of time, and there are two of us. And frankly, I think we're wastrels, it should be lower.

Quote from: GamerGirl
That can't be right, can it? WTF? How the F**** would I be using almost 140 gal of water a day?

Washing machine, dishwasher, showers, toilets (especially if you have the older, higher water volume kind). And maybe a leak.


Wolf_Stache

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Re: House buying: Now or wait and keep renting
« Reply #21 on: February 07, 2014, 12:52:40 PM »

No. of Days: 60 (this is billed every other month)
Consumption in gals: 8228
Ave consumption/day: 137.13 gal?!?!?!?!?!?!?!?

Sounds a bit high. We currently use around 7500 gallons in a similar period of time, and there are two of us. And frankly, I think we're wastrels, it should be lower.

Quote from: GamerGirl
That can't be right, can it? WTF? How the F**** would I be using almost 140 gal of water a day?

Washing machine, dishwasher, showers, toilets (especially if you have the older, higher water volume kind). And maybe a leak.

Its frustrating, because I have nothing to compare it to. I've never lived in a house before - all my apartments had the water included in the rent. Same with my condo - the water bill was paid by the condo association.

I asked a friend who lives here, and he said the ONLY time his water usage gets that high is during the summer when he is constantly refilling his pool.

So I'm going to have a plumber come out ASAP and look at the house.

I feel like face punching myself for not checking this out sooner. I asked around, people said Seattle has a high water rate, and so I didn't investigate. I didn't even think of looking at the gallons used per day.

Next is my electric bill. I found out the library has one of those energy consumption things you can check out. My boyfriend is going to help me go around and figure out why my electric bill is sky high.

Mori

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Re: House buying: Now or wait and keep renting
« Reply #22 on: February 07, 2014, 01:48:30 PM »
I don't know if you have a readable water meter (my meter shows me numbers), but have you looked at the meter to see if there's still water being used when you have everything in "off" position in the house? That would indicate a leak, too. Or something running you don't know about. :)

Wolf_Stache

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Re: House buying: Now or wait and keep renting
« Reply #23 on: February 07, 2014, 02:59:57 PM »
I don't know if you have a readable water meter (my meter shows me numbers), but have you looked at the meter to see if there's still water being used when you have everything in "off" position in the house? That would indicate a leak, too. Or something running you don't know about. :)

My coworker said to try this too. That is how they discovered they had a leak at their house.

Now I'm frustrated though because my water bill is crazy, my basement is filled with water, and my driveway is a flooded ice slick, but the plumber says there is no leak.

Mori

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Re: House buying: Now or wait and keep renting
« Reply #24 on: February 07, 2014, 05:05:14 PM »
If the leak was on the city side it wouldn't show up on your meter, but you'd still have excess water. Wouldn't explain your bill, though.

Time to get a second opinion with a different plumber.

SoftwareGoddess

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Re: House buying: Now or wait and keep renting
« Reply #25 on: February 07, 2014, 05:25:06 PM »
my basement is filled with water, and my driveway is a flooded ice slick, but the plumber says there is no leak.

The basement flooding could be unrelated to the leak, if there are drainage issues with the property. For instance, if your house has no weeping tile (as did my last house) or if the slope of the property around the house directs water towards the house, then excess water at ground level can seep into your basement.

Check for a leak for sure, but if there are drainage problems, then that's a separate issue altogether.

Eric

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Re: House buying: Now or wait and keep renting
« Reply #26 on: February 07, 2014, 05:53:23 PM »
I don't know if you have a readable water meter (my meter shows me numbers), but have you looked at the meter to see if there's still water being used when you have everything in "off" position in the house? That would indicate a leak, too. Or something running you don't know about. :)

My coworker said to try this too. That is how they discovered they had a leak at their house.

Now I'm frustrated though because my water bill is crazy, my basement is filled with water, and my driveway is a flooded ice slick, but the plumber says there is no leak.

Look on the bright side.  At least you don't own this house.

Wolf_Stache

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Re: House buying: Now or wait and keep renting
« Reply #27 on: February 08, 2014, 09:01:56 AM »
So I asked my neighbor last night about her utility bills (similar house, also one person). Her electric is $70 every two months and her water is $150 every two months.

So her water AND electric are HALF of mine. What in the world could be using that much electricity? I still suspect a plumbing leak somewhere onthe water, but now two plumbers have said there is no leak.

I'm on amonth to month lease, so I'm going to give my notice for moving at the end of march. The utility bills on this house are absolutely insane. I could rent somewhere else for 50% more and still be paying less than this 'cheap' house.

That will also give me incentive to find something else pronto.

Thanks for all the advice. I never really questioned the utility bills after the first month when everyone around Seattle told me 'oh, utilities are expensive here.'