I want to move closer to work, but I don't know how. Help.

[tkaraszewski]

Last year I bought a house, I like everything about it, except that I bought in the wrong place. If I could lift the property up and move it over about a dozen miles, I would, but I can't.

Here's what I've got: I paid $550k for a house in California, using an FHA loan and putting 3.5% down. I owe $530k on the house. I don't think it's underwater (zillow thinks its actually appreciated by $70k since I bought it, but I find that hard to believe).

I would like to buy another house for about the same price (or maybe a bit more, it's a more expensive area). I would also like to only move once. Is this possible without having to sell the first house, move into a rental, and then buy the second house? Will I need to save 20% down on the new house before I even start this process?

What advice would you give to someone in my situation? I bought the wrong house, but I don't know how to turn that into the right house without an amazing amount of overhead (moving twice, a year or more delay while I save a big down payment for another house, paying the mortgage on two houses while I wait for the current one to sell, or a combination of these).

The current house is also complicated by being in the country, giving it more of a niche appeal and making it harder to sell or rent (I am also fairly sure I couldn't rent it for enough to cover the mortgage).

[smalllife]

I think it depends on how much of a financial hit you are willing to take and how badly you want to move closer to work.  I would run the numbers on your commuting expenses to figure out where the trade off line is and go from there.

[Another Reader]

The good news is your house in Corralitos has appreciated.  The bad news is houses in Silicon Valley have appreciated as much or more, at least in most areas.  And your selling expenses will eat up the bulk of the profit.  You might be able to get a small tract house in the Blossom Valley, Santa Teresa or Evergreen areas of San Jose for what you can sell yours, after all expenses.  Also, the lower priced houses move quickly, and offers contingent on selling a house go to the bottom of the pile.  Not sure where you want to move.  Getting into the heart of Silicon Valley will take more than "a bit more".

You are involved in a start up that could make some substantial money in a few years.  Or you could move on to something else.  Rent is significantly less expensive than buying here, why not do that until you know what direction you are heading?  If you make a bundle on the start up, you can buy higher up the housing ladder at that point.

And don't even think about renting the Corralitos house.  The rent will not support the mortgage and tenant quality there is very poor, putting it nicely.

Having said that, it might be possible to buy if your house is in escrow.  Talk to a couple of agents to see if that will fly in any of the areas you like.  Also talk to a couple of lenders about being approved contingent on the closing of your current home.

Last time you checked in, this was your dream house and you did not want to move.  What changed your mind?

[tkaraszewski]

I want to move to Scotts Valley, which is not in the heart of Silicon Valley, and thus less expensive, but would still cut down any commute I have into the valley by about half an hour each way, and yet keep me in the community where my friends and family are. The current house is also 4br/3bath/2400 sq ft and I would be willing to live in something a bit smaller.

I have, to keep the story short, been thinking a lot lately about where I do or don't want to work, and for how long I want or need to keep working. Realistically, I probably have a decade of full-time work left ahead of me, or more, and while working from home full time is feasible in my industry, there are a *lot* more employment options available to me if I'm willing to be in an office most of the time, and those offices are not very close to my current house. Even most of the work-from-home positions in this industry are held by people who used to come into the office every day, and proved themselves valuable before being given the option to telecommute. I have to ask myself - how many hours do I want to spend commuting over the next decade, and what happens if I want to switch jobs?

Also, Scotts Valley has much better schools (I have a 1-year-old daughter).

I have not 100% decided that I am definitely selling the house, but the more I think about it, the more it seems like the sensible choice, despite the emotional attachment to the current place. Try and read my comments on here as coming from someone who's recently had a mustachian epiphany, and who has just started to question a lot of different aspects of his life that he may have been taking largely for granted, and so his viewpoints might be changing fairly quickly as he thinks through these things.

But, the decision of whether or not I *want* to move is moot unless I can come up with a good strategy that actually lets me be able to move, which is what I wanted to ask about here.

As I sit here writing this post I have almost convinced myself that I should take a job where I can work from home more often, irrespective of the decision to move.

[Another Reader]

Why the need to own if you are not completely settled?  If you have to rely on an FHA loan to buy, can you really afford to do so?  Why not rent for two years, save everything you can, and then decide what to do.  If the start up comes through, that's great.  If not, you are not tied down to the house and mortgage payment and you have a decent amount of money saved.

Corralitos is great for a hobby ranchette.  It does not sound like that's the priority at this point in your life.   In your shoes, I would consider selling, and simplifying things for awhile.

[tkaraszewski]

Heh. But where would we put the chickens (yes, we have chickens) while we rent, or the vegetable garden? Seriously thouh, even our cats pose a problem with renting around here, as a lot of places do not allow pets.

But I see what you're saying, and I'm not being dismissive. Renting and saving is not a bad idea, especially from a purely practical standpoint. Staying here for a while, and saving may also be a reasonable choice, especially while I do have the option to work from home part of the time. Maybe we could move sometime before my daughter starts school, which gives us about four years, which would be a lot of saving.

I am not going to rush into anything, especially considering how quickly my viewpoint on this issue has been changing lately. I am still interested in hearing about strategies for getting out of this house and into another one for a reasonable amount of overhead, just to be prepared with good information.

[Another Reader]

Because the market is very competitive in your price range, your strategies are very limited.  Contingent offers and FHA offers are very difficult to get accepted.  Contingent offers fall apart, FHA appraisals tend to be low.  When there are 10 offers on the table, the seller's agent usually recommends taking the highest clean offer. 

Talk to your lender about your financing options.  A bridge loan for the down payment is not an option because there is not much equity.  Talk to a couple of agents in the Scotts Valley area, see if the market there is as competitive as it is down the hill. 

I don't see many houses in Scotts Valley under $500,000 on mlslistings.com, or under $550,000 for that matter.  You may have to go over $600,000 to get what you want.

If you had a sizable down payment and inventory was not so thin, you could sell and move into a short term rental while waiting for a house to come along.  More savings and inventory might put you in that position in a couple of years.