The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: coolmom on September 05, 2014, 11:34:31 AM
-
Hello! I have been reading the MMM blog for a while now, and it has changed my perspective on lots of things, one of which is my house/location. My husband and 2 kids and I currently live in an "up and coming" neighborhood about 18 miles from my husband's office, which is on a hellish traffic route, so it takes him between 30-60 minutes each way, depending on traffic. If there is no traffic, it takes 20 minutes. His office is also very close to my mother's house, where by parents and 3 sisters live. That neighborhood is only 7 miles from my husband's office, and none of it is freeway driving -- should take between 10-15 minutes. Additionally, that neighborhood has "good" schools, as opposed to the "bad" schools in our current up-and-coming neighborhood. We would be able to walk to my mom's house and to/from my daughters' schools. We will also be able to buy a cheaper house in this neighborhood, and put some money in savings.
So, all of this sounded good to us and we are set to list our house next week, but now I am having last minutes doubts about whether I am doing the right thing! We are in an up and coming neighborhood, which everyone says is the next big thing -- I am a fool to move now before it gets big?? Our house has already appreciated a lot since we bought it, though. I have an infant -- am I a fool to move now while she is so young? What if our house doesn't sell -- will it be awkward with our neighbors? Our block is pretty tight knit (bordering on nosy). Our house is very unique and all of our friends think it's so cool. Will I even be able to afford a house this cool again?
Are all of these last minute doubts normal?! I have never sold a house before. This was our first home, and we brought both of our daughters home from the hospital to this house. There is an old MMM post about moving houses/downsizing that inspired this idea to move but I can't find it now -- can anyone help me find it?
-
I'm not much of a second guesser unless new information has come to light. The closer you get to go time, the more emotion can take over. I'm guessing that you did originally make a rational and logical decision - the one that was right for you and your family. Stick with it.
-
Can you afford to keep the house as a rental? How much equity do you have in the house?
If it is truly up and coming you might be able to rent it out pretty easily.
-
Hello! I have been reading the MMM blog for a while now, and it has changed my perspective on lots of things, one of which is my house/location. My husband and 2 kids and I currently live in an "up and coming" neighborhood about 18 miles from my husband's office, which is on a hellish traffic route, so it takes him between 30-60 minutes each way, depending on traffic. If there is no traffic, it takes 20 minutes. His office is also very close to my mother's house, where by parents and 3 sisters live. That neighborhood is only 7 miles from my husband's office, and none of it is freeway driving -- should take between 10-15 minutes. Additionally, that neighborhood has "good" schools, as opposed to the "bad" schools in our current up-and-coming neighborhood. We would be able to walk to my mom's house and to/from my daughters' schools. We will also be able to buy a cheaper house in this neighborhood, and put some money in savings.
So, all of this sounded good to us and we are set to list our house next week, but now I am having last minutes doubts about whether I am doing the right thing! We are in an up and coming neighborhood, which everyone says is the next big thing -- I am a fool to move now before it gets big?? Our house has already appreciated a lot since we bought it, though. I have an infant -- am I a fool to move now while she is so young? What if our house doesn't sell -- will it be awkward with our neighbors? Our block is pretty tight knit (bordering on nosy). Our house is very unique and all of our friends think it's so cool. Will I even be able to afford a house this cool again?
Are all of these last minute doubts normal?! I have never sold a house before. This was our first home, and we brought both of our daughters home from the hospital to this house. There is an old MMM post about moving houses/downsizing that inspired this idea to move but I can't find it now -- can anyone help me find it?
Yes.
It's up to you to get control of your emotions. MMM is about using rational and logical thought as opposed to letting emotions control your decisions.
"Up and coming" is not a tangible, measurable, or beneficial thing.
"7 miles," "close to family," and"good schools," on the other hand, are.
-
The neighborhood may (or may not) be up and coming, but my guess is that the schools will remain bad for quite some time, and possibly forever. And the more popular the neighborhood is, the more hellish the commute will be. That will not change no matter how desirable the neighborhood becomes.
"Mover's remorse" happens to everyone. Just ignore it. You made a decision for sound reasons; just follow through. One step at a time.
And so what if your house would have been worth a zillion down the line? You're saving yourself time and sanity by making a move for a good reason. Moving five or ten years from now would mean 5-10 years more draining commute, distance from relatives, bad school, etc. Endure all that for a possible (not even certain) gain in money? Nope.
-
Thanks for these replies. I think it is what I needed to hear. My husband says that I add more stress to our lives by re-evaluating every decision, and he is probably right! I need to focus on how much easier our lives will be once we finally make the move. I am reassured to know that last minute doubts are normal.
We thought about renting out our current house, but it is really a unique, high maintenance (read: expensive maintenance) house. The whole back side of the house is glass. We have to keep the garden perfectly tended because the back of the house is almost all glass and it looks onto the garden. I don't think it's a good rental. Plus, we have around 400k in equity that I would like to pull out. It was a foreclosure and we spruced it up so we will make about 200 k off of it. We plan on using 100k for the new house down payment and putting 300k in savings. I need to remind myself that we don't need to live in such an expensive house! (this was a pre-MMM decision).
-
First, please take a deep breath. You haven't even listed the house yet.
If you could provide more information with numbers, I am sure we could help your perspective.
1. How much equity do you have and what is the estimated and professionally documented likely selling price range?
2. What are the purchase prices of homes you are looking at near your parents? What is your "pro-forma" budget once you move in (at least what percentage of your income will go toward P-I-T-I)? What will your balance sheet look like after closing including cash reserves.
3. What are the taxes pre and post move (cost of school district)? This is to determine what the better schools are costing.
4. What would suitable non-public schools cost in your "up and coming neighborhood?
My biggest concern is your uprooting for the purposes of a not so bad commute. I've been around long enough to realize that a job is not forever, so why make a long term commitment based on a not so bad job location, everything else being equal?
-
Second what everyone says - the reasons you've laid out scream "move". Usually we're discussing where to draw the line as to how much more you should be willing to spend to be close to work / school / family - in your case it is actually cheaper.
Moving sucks, so try to make good decisions so you don't have to do it often, but when everything lines up like it is now, pull the trigger. When we moved, my father in-law, who used to build houses for a living, said "I've never worked with a couple who didn't seem to be headed straight for divorce during the project." No one he knew actually had gotten divorced over it. So yeah, the emotional toll during the whole process is not going to be fun. But people move all the time - it will be OK long-term - the challenges are temporary.
And remember, the house you live in costs you a lot of money. It may appreciate, but you've either got to sell or take out a loan against it to use that. Higher home values = higher taxes and insurance, often bigger houses so higher utilities and maintenance. So even if you miss out on some big gains in a decade or two, you've also avoided a lot of additional costs along the way.
-
Coolmom - Then, I agree with you and all of the other replies. Leave the other home behind and look forward to new memories in your new place. You have made a wonderful decision for your family and you should be celebrating your new home/lifestyle! Congrats on your new place!
-
It sounds like you're making the right decision, but as someone who recently shed tears when discarding an old laundry cart, believe me, I understand the last minute panic. I think you know it's the right choice, and once the trigger is fully pulled, you'll never look back - especially with a happier husband with a shorter commute and great schools and closer friends and family. Besides which, you're not like a regular mom, you're a cool mom (http://s3-ec.buzzfed.com/static/enhanced/webdr03/2013/5/10/20/anigif_enhanced-buzz-7078-1368232160-7.gif)! You can do it!
-
My biggest concern is your uprooting for the purposes of a not so bad commute. I've been around long enough to realize that a job is not forever, so why make a long term commitment based on a not so bad job location, everything else being equal?
Everything else is not remotely equal.
By not moving they are costing themselves close to $3,000 a year in commuting expenses AND dad is costing himself 3 weeks of waking hours with his family. The only way that this is "not so bad" is if you operate with a depraved definition of "good".
In addition they are stuck with a bad school and a costly to maintain house.
Sounds to me like they are making an incredibly wise decision.
-
MOVE!
MOVE!
MOVE!
MOVE!
MOVE!
MOVE!
MOVE!
-
Thank you all for your responses! This forum is very helpful. Sounds like my last-minute panicking is fairly normal. I just need to remind myself of the reasons we want to move in the first place.
In response to frugalIknowit:
1. How much equity do you have and what is the estimated and professionally documented likely selling price range?
Purchased for 700, set to list house at 950-975k. We have a mortgage of 460. We live in California, which is why these amounts are so high.
2. What are the purchase prices of homes you are looking at near your parents? What is your "pro-forma" budget once you move in (at least what percentage of your income will go toward P-I-T-I)? What will your balance sheet look like after closing including cash reserves.
New house purchase should be between 650-700k. We are downsizing, even though our kids are still young. We decided we didn't need a huge house. Our plan was to keep the same loan amount, so our PITI won't change much. Our savings will go from 450k to about 650k. This is one of our main motivations. Our PITI is approximately 40% of our income -- yes, I know this is very high but we live in California! Seems sort of standard here. We have considered moving elsewhere but it is so hard to leave California. :)
3. What are the taxes pre and post move (cost of school district)? This is to determine what the better schools are costing.
Taxes should be the same since we will be staying in the same large city, and same school district.
4. What would suitable non-public schools cost in your "up and coming neighborhood?
The cheapest private school would be about 6000 per year, per kid.
Ok, typing all of that really reminded me of why we made this choice. I just have to get over the hurdle of the actual move!
-
Thank you all for your responses! This forum is very helpful. Sounds like my last-minute panicking is fairly normal. I just need to remind myself of the reasons we want to move in the first place.
In response to frugalIknowit:
3. What are the taxes pre and post move (cost of school district)? This is to determine what the better schools are costing.
Taxes should be the same since we will be staying in the same large city, and same school district.
Same rates, but ~30% lower because you'll have a significantly less expensive house, right? This move is a slam-dunk from a financial perspective. Good luck with it!