Author Topic: Doubling price of house is making me panic!  (Read 3320 times)

Lago

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Doubling price of house is making me panic!
« on: October 28, 2019, 12:55:34 AM »
I came here for some help/ advice since other frugal people might understand me.

My husband and I have decided we have to move to get better public schools. We live in a nice old house now, but in an undesirable low income area of town. We are homeschooling because we like our house so much, but this needs to end! We have the money to buy a very nice home in an amazing school district, but this is our FIRE money. It has been sooo hard for my husband and I to pick a home! We are looking at things in a price range of $300 to 700k. A huge price range, mostly because we can buy more, but we want to stay cheap. This house hunt is hurting our marriage and our happiness. We spend every night looking at homes on our phones, but we canít bring ourselves to pull the trigger and spend the money to get what we want: a good public school and a nice large house. I think the big reason we canít spend is that we have a competing FIRE goal.

Any advice for getting mental prepared to spend this money? I want to make a wise choice, but I am also getting very depressed from looking a homes on my phone, frequently disagreeing with my husband and losing homes (2 now) just because we wonít raise our offer. I feel terrible and want to quit house hunting, but we have the school problem.
« Last Edit: October 28, 2019, 12:58:18 AM by Lago »

RFAAOATB

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Re: Doubling price of house is making me panic!
« Reply #1 on: October 28, 2019, 07:46:18 AM »
Is buying a house a better option than private schools?  How many years of work is buying a better house going to cost you? 

Spend the money if it will make you happy.  Eventually the money will come back to you, and things will be ok.

Going home from work to a stressed out house is not a good way to spend your life.  How much income earning does homeschooling cost you as opposed to good public schools?

Money just exists as numbers on an excel file, but the house is where you regenerate.  If you or your family canít regenerate well in your current house then itís time to move.

Kl285528

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Re: Doubling price of house is making me panic!
« Reply #2 on: October 28, 2019, 08:19:36 AM »
can you rent in the area you are considering - take the pressure off for a year

Malkynn

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Re: Doubling price of house is making me panic!
« Reply #3 on: October 28, 2019, 08:35:03 AM »
It doesn't sound like you two are aligned in terms of finances.

I would work on that as a top priority before making a massive house purchase.

charis

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Re: Doubling price of house is making me panic!
« Reply #4 on: October 28, 2019, 08:47:17 AM »
What's the concern with your current public school options?  Research shows that poor school districts have the highest percentage of impoverished students and that when wealthier, educated families send their children there, their performance is not negatively affected and their disadvantaged peers improve performance.

Jon Bon

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Re: Doubling price of house is making me panic!
« Reply #5 on: October 28, 2019, 11:48:53 AM »
First off we need your numbers.

Current House
Current mortgage balance and rate
~salaries

Target house price
DP %
Anticipated mortgage balance and rate

Net worth
% taxable
% non-tax
% cash and cash equivalents

# kids and ages
Cost of decent private school in your area

Your post sounds VERY emotional, which is about the worst thing possible when approaching a house hunt. Numbers help with emotions, give us the numbers!




Finances_With_Purpose

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Re: Doubling price of house is making me panic!
« Reply #6 on: October 28, 2019, 09:39:43 PM »
I would back off house shopping and get aligned on what your goals are.  Then, re-approach it. 

This isn't about numbers; it's about larger goals. 

First, you want to decide whether you want 80% retirement, 10% house, and 10% other, or vice versa (maybe 33-33-33, or 70-20-10 -- you get the idea).  And get on the same page about the big picture.  Compromise.  Talk about what each of those pots gets you, and when.  (Delay retirement 5 years v. 1 extra bedroom v. slightly better district, or whatever it is.) 

THEN and only then, shop for houses with a set amount as your max.  (E.g.: budget 300k-350k max.  Because we already set up our joint goals.) 

Otherwise, you're begging for stress: house shopping is full of sales tactics, plus, you'll be comparing houses more than 2x as much as what your low end looks like, which is just a recipe for discontentment (rather than looking at ALL of the 300k options). 

You don't want to mediate the bigger issues and conversations through a sales/stress procedure... 

Linea_Norway

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Re: Doubling price of house is making me panic!
« Reply #7 on: October 29, 2019, 04:17:18 AM »
Buying an expensive house from your FIRE money is not the end of the world. After your children are done with their school, you can sell it again and move to a cheaper home. Then you won't get the stock market growth from your savings, but probably only inflation correction.

I am not recommending it, but it is an option. I am in the same situation myself, having invested all our savings 4 years ago in a clown house and now needing to sell it to be ble to FIRE.

If you currently like your house so much, then moving might not be your best bet. Have you tried the public schools in your area?

Dee18

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Re: Doubling price of house is making me panic!
« Reply #8 on: October 29, 2019, 05:46:55 AM »
Why do you want a large house? 

Lmoot

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Re: Doubling price of house is making me panic!
« Reply #9 on: October 29, 2019, 10:38:54 AM »
^ This. Multiple bedrooms doesn't need to mean large house.

Cb1234567

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Re: Doubling price of house is making me panic!
« Reply #10 on: October 29, 2019, 01:03:15 PM »
Hi - We're house hunting, too, so I can understand the stress and emotion. Plus, it's not like the rest of life stops just because you want to schlepp over to yet another showing at the last minute for a new listing! Put the phone down - Please consider taking a break to figure out some boundaries for yourselves on this adventure - you'll end up with a better result. If it's that crazy about the schools, move and rent to buy time - we are doing this. I'm not thrilled, but it's the best choice in our case.

We've found it helpful to look at our budget (from selling the current house, no loan on it/plenty of equity) and decide how much of it is going to buy house, and how much of it will be used to buy us some retirement. DH came up with that - I think it's brilliant. It makes me want a smaller, cheaper house, because we're talking years in terms of retirement. No clue what the 350K vs 700K houses are like in your area, BUT - budget first. Shop second. Don't even look at it if it's not in your price range. You WILL blow your budget. Don't forget, usually more house = more budget 4ever (insurance, taxes, maintenance/upkeep, utilities).

Also, not sure of your asset #s, but when you say the purchase is coming out of your "FIRE money", I'm assuming this is not in retirement accounts - which would be a no-go for us.


Kierun

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Re: Doubling price of house is making me panic!
« Reply #11 on: October 29, 2019, 02:55:18 PM »
^ This. Multiple bedrooms doesn't need to mean large house.
True, my 3br 1.5ba is 850 sq ft.

Lago

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Re: Doubling price of house is making me panic!
« Reply #12 on: October 29, 2019, 03:37:22 PM »
Hi. Thank you for your replies!

Why do you want a large house? 

We have 3 kids and we both work from home. We need space so that it is quiet for work phone calls.

It doesn't sound like you two are aligned in terms of finances.

I would work on that as a top priority before making a massive house purchase.

YES!! This is true. My husband is frugal, but he has never gotten on board with FIRE. I love FIRE and worldschooling and all of these alternative ways to live that prioritize experiences. I follow groups on facebook and really love this dream, but the truth is that we are not this family. Both my husband and I work, we get stressed when we travel with the kids and we are pretty normal other than we are upper-middle class, but live in a cheaper area. Buying a nice house in good area of town seems like a loss of my dreams, although FIRE and worldschooling aren't realistic for us right now.

First off we need your numbers.

We don't want to do private school, because I want my kids to have the neighborhood school experience. I did run the numbers. Our current house is valued at $300K (no mortgage) and the new house would be $600K to be in the good area and have the same size home. We have 3 kids, but only one is Kindergarten age now. Next year it would be even to stay here verses pay for private school, but when brother reaches kindergarten it will be better to move. So we could delay 1 year, but we are ready to move somewhere and have a change now. It's not only the numbers. We actually used to own a more expensive house, but 5 years ago sold it for $450K and bought this house for $300K. We thought we were so smart! It was awesome! But we can't keep going down in price. I wish I could live in a cheap fixer upper, but no one else in my family would go for that.

I think my husband and I need to talk about our goals. Buying this house is like a piece of my identity is dying. My dream of getting out of my hometown, worldschooling and FIRE. We will just be the normal suburban family working to pay the mortgage.

Yes, we could always sell the house in the future and get the money back. Sorry this seems like a first world problem. My mom says money is to be used. I can see both sides on this.
« Last Edit: October 29, 2019, 03:40:13 PM by Lago »

BECABECA

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Re: Doubling price of house is making me panic!
« Reply #13 on: October 29, 2019, 03:40:57 PM »
How bad of a public school are we talking? And how old is your kid?

When I was in elementary school, my family lived in a former redlined district. The associated urban public school was poorly rated but it was a wonderful school for me. There was a choir that I participated in (we even got to sing on the radio once!), I got into the tech class and was learning to do things on Mac OS computers in the late 80ís! Since I was at the top of my class, I was then eligible to go to a gifted middle school (although my parents opted out, because they thought I was already too much of a nerd).

Then we moved to another state that supposedly had a much better school system. The junior high school I was put into there was top rated, in an upper middle class suburban neighborhood. They didnít have a choir, their tech class was still using DOS and really only taught typing (in the early 90s), the math class was only teaching things Iíd already learned 3 years earlier. After two years there I was eventually able to find my way into the honors classes so I could get closer to the learning trajectory that I had been on when I was going to the ďbadĒ elementary school.

This is all to say that a kidís school experience is more about the kid and the parental support than about the rating of the school.

Lago

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Re: Doubling price of house is making me panic!
« Reply #14 on: October 29, 2019, 04:00:24 PM »
Hi - We're house hunting, too, so I can understand the stress and emotion. Plus, it's not like the rest of life stops just because you want to schlepp over to yet another showing at the last minute for a new listing! Put the phone down - Please consider taking a break to figure out some boundaries for yourselves on this adventure - you'll end up with a better result. If it's that crazy about the schools, move and rent to buy time - we are doing this. I'm not thrilled, but it's the best choice in our case.

We've found it helpful to look at our budget (from selling the current house, no loan on it/plenty of equity) and decide how much of it is going to buy house, and how much of it will be used to buy us some retirement. DH came up with that - I think it's brilliant. It makes me want a smaller, cheaper house, because we're talking years in terms of retirement. No clue what the 350K vs 700K houses are like in your area, BUT - budget first. Shop second. Don't even look at it if it's not in your price range. You WILL blow your budget. Don't forget, usually more house = more budget 4ever (insurance, taxes, maintenance/upkeep, utilities).

Also, not sure of your asset #s, but when you say the purchase is coming out of your "FIRE money", I'm assuming this is not in retirement accounts - which would be a no-go for us.

All of what you say is so true! We are obsessed with checking out the latest listings and we are wasting so much time!

We are definitely considering the higher taxes, insurance and upkeep charges.

The money isn't coming out of retirement, but we would have a mortgage with the new house. We don't have one now. We would still be able to contribute the maximum to our retirement accounts, but wouldn't be stashing into our FIRE brokerage account at nearly the same level. A lot of our FIRE money would be tied up in the house and we would have to downsize in the future if that was still our goal.
« Last Edit: October 29, 2019, 04:04:31 PM by Lago »

nancyfrank232

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Re: Doubling price of house is making me panic!
« Reply #15 on: October 29, 2019, 04:03:00 PM »
Conflict with the new house purchase is a symptom of a more important issue

meandmyfamily

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Re: Doubling price of house is making me panic!
« Reply #16 on: October 29, 2019, 07:22:05 PM »
You talk about worldschooling...homeschooling is very different than public school even in a "great" district.  Are you sure you want that change for your family?  Maybe where you are is actually okay.  The idea to rent and try out the school before committing might be a good idea.  Really think about why you are dragging your feet. 

nancyfrank232

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Re: Doubling price of house is making me panic!
« Reply #17 on: October 30, 2019, 07:15:34 AM »
Conventional schooling curricula is useless so I would prioritize where you want to live your life over the school district

reeshau

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Re: Doubling price of house is making me panic!
« Reply #18 on: October 30, 2019, 07:29:32 AM »
We are looking at things in a price range of $300 to 700k. A huge price range, mostly because we can buy more, but we want to stay cheap.


THEN and only then, shop for houses with a set amount as your max.  (E.g.: budget 300k-350k max.  Because we already set up our joint goals.) 

I agree with everyone else who stresses that you need to set your overall life goals first.  But when it comes time to look at a house, I wanted to emphasize @Finances_With_Purpose 's point:  set a price point, within your overall financial goals, and stick to it.  Having such a wide range will just drive you nuts:  of course we could have a sauna, or a gold-plated toilet, or an elevator.

There is a reason why all the real estate shows have 2 similar properties, and one expensive one.  Guess which one gets chosen?  OK, in the shows, it's because they are rigged.  But in reality, your real estate agent will also see if they can upsell you--show you something "nicer," for comparison--and to boost their commission.

Set a range, a very narrow range.  And stick with it.  Browsing above your means is just a formula for misery:  either to see what you are denying yourselves, or to fall prey to it and then experience buyer's remorse at the damage you will have done to your plan.

Malkynn

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Re: Doubling price of house is making me panic!
« Reply #19 on: October 30, 2019, 07:44:41 AM »
Hi. Thank you for your replies!

Why do you want a large house? 

We have 3 kids and we both work from home. We need space so that it is quiet for work phone calls.

It doesn't sound like you two are aligned in terms of finances.

I would work on that as a top priority before making a massive house purchase.

YES!! This is true. My husband is frugal, but he has never gotten on board with FIRE. I love FIRE and worldschooling and all of these alternative ways to live that prioritize experiences. I follow groups on facebook and really love this dream, but the truth is that we are not this family. Both my husband and I work, we get stressed when we travel with the kids and we are pretty normal other than we are upper-middle class, but live in a cheaper area. Buying a nice house in good area of town seems like a loss of my dreams, although FIRE and worldschooling aren't realistic for us right now.

There's a lot of reality between worldschooling and buying an expensive home that has both of you stressed out of your minds.

Also, FIRE isn't necessarily all about dropping "normal" life and trotting around the globe as perpetual adventurers.
It's not one extreme or another, which seems to be where your head is at, which isn't healthy.

It's not an all or nothing thing, it's a process of understanding your own needs, understanding your own spending, and building your best life within whatever parameters you decide are most important.

Above all though, it's about questioning those parameters.

You already know that you and your spouse are not aligned.
Okay.
Well before jumping to conclusions that the answer is to spend an extra few hundred thousand on a house, why don't you two actually do the work to hammer out a financial alignment?

Just because globe trotting and worldschooling isn't a realistic option doesn't mean that you can't/shouldn't work towards establishing common values and goals.

You are living this life *together*, that can either mean a perpetual state of compromise or synergy, and by that, I mean that it can either be a process of failing to achieve either partner's dreams and landing somewhere in the middle where you are both kind of okay with it, or you can come together, be creative, and develop a collective vision for your whole family where everyone is on board.

There are realities we all have to deal with, but it sounds like your family has the health, wealth, and intelligence to have all of the options available necessary to be truly happy.

...so do that.

firemane

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Re: Doubling price of house is making me panic!
« Reply #20 on: October 30, 2019, 08:09:26 AM »
Glad I found this thread as I can relate a lot. I too am in a unit I like that that Iíve been in over a decade that is in a lower income side of town (but somewhat gentrifying). Crime is not bad, but things that irk me like cars in jackstands on driveways for years at a time and poorly kept lawns irritate me a bit. My hoa also leaves a bit to be desired. Boats, pop up campers, etc parked in places they donít belong. Like you, we have been looking on Zillow regularly for a couple of years and just havenít been able to pull the trigger. Sometimes looking at houses gives me a bit of anxiety, itís like I really donít feel that i want to spend the money bad enough or something. I remodeled the unit with my own labor and it has a bit of sentimental. I drive an antimusrachian sports car so I am not a stranger to an occasional splurge, but for some reason looking at houses sends me into a panic.

charis

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Re: Doubling price of house is making me panic!
« Reply #21 on: October 30, 2019, 10:36:10 AM »
Several folks have asked about why your current neighborhood school is deficient.  How much research has gone into rejecting it?  Unless it is unsafe, there is almost no kindergarten program so bad that you couldn't try it for a year.  Many families in my neighborhood move before their kids hit elementary school because of how "bad" the district is as a whole.  Part of our research was to interview families who chose to stay.  Ultimately, there was no reason to not at least try it for a year.  We loved it and now all our children go there.

tyrannostache

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Re: Doubling price of house is making me panic!
« Reply #22 on: October 31, 2019, 01:44:28 PM »
I'm not going to second-guess your decision that you need to move. Your post history shows that you have many times decided to sell the house, and you have been stressing about this for a LONG time. Long enough to have listed your house and started renting in a different area.

You seem to be having a lot of black-and-white thinking on the issue: either you're maxing out your path to FIRE and trotting the globe with your family, or you're suburban schlubs. As Malkynn said, there's a lot in between these extremes, and thinking that way is not necessarily helpful or healthy.

I want to address something that you didn't say.

You were previously experiencing extremely intense, seemingly unwarranted anxiety about all spending (exhibit: repeatedly feeling nausea at the prospect of spending money on special occasions or experiences, not eating yourself, making your kids share a plate of fries, etc). You declined therapy due to the expense. And in this thread you claim that your inability to make a decision and your anxiety over all spending is having an impact on your marriage.

By your own admission, your relationship with money is not healthy. Please start there. Please get some help figuring out how/why you can get to a healthy place. Anxiety is a medical issue. You have described your relationship with money as similar to anorexia/bulimia. It's possible that this forum is not a healthy place for you.
« Last Edit: October 31, 2019, 01:46:20 PM by tyrannostache »

ender

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Re: Doubling price of house is making me panic!
« Reply #23 on: October 31, 2019, 07:36:39 PM »
You should narrow your budget as 300-700k is a massive budget.

Figure out what you are going to spend first, then look at houses in that range.

Lago

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Re: Doubling price of house is making me panic!
« Reply #24 on: November 17, 2019, 11:00:10 AM »
UPDATE: We decided to stop our house hunt and to go to marriage counseling. This has been a very hard time for us! I hope it helps, but it seems to take months to get any help from counseling. We went one time and the whole hour was taken up just filling the counselor in on what was going on.

I'll write again to update you guys when we do move. THANK YOU! I'm always blown away by the caring thoughtful responses I get from total strangers on this forum!


Dicey

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Re: Doubling price of house is making me panic!
« Reply #25 on: November 17, 2019, 11:15:01 AM »
Wise decision. In the meantime, there's a decent chance that the RE market will cool off. Easier to buy in a trough than a peak. I have far less problem spending large amounts of money when I know I'm getting a solid value.

lhamo

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Re: Doubling price of house is making me panic!
« Reply #26 on: November 17, 2019, 01:13:29 PM »
Gentle suggestion:

While you are working through things in counselling (it will take some time, be patient), put your school-aged child in the local public school.  It may be better than you think.  Or it may be worse.  But then you will be weighing the decision whether or not to move to a different/more expensive district based on something more concrete than general reviews of the school or test scores, both of which can be misleading. Being integrated in the school environment may also help your whole family build more solid connections in your current community, which will likely make all of you happier.