Author Topic: Emotions, and rules of thumbs about buying.  (Read 1702 times)

alaskadad

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Emotions, and rules of thumbs about buying.
« on: May 07, 2015, 11:08:43 AM »
Background:
My wife and I saved up $45 k for a down payment on a $120 k condo and then paid off our $ 75k mortgage over the course of the next three years. Just got my deed in the mail. Feels good to be debt free (even though, yeah, I would have made more in the stock market, but oh well- hind sight is twenty twenty).

My wife just finished her PhD and has decided to accept a post doctoral position at WSU in Pullman. I'm betting we will stay for only one or two years, then we will move back to Alaska or maybe Seattle.

My wife is obsessed with buying a house (selling our condo and then paying cash) when we get down there. To me this is crazy- we may only be there for ONE YEAR. It seems obvious to me that we should rent, even though I hate renting and I love owning. There are a lot of emotions clouding both of our brains. She wants to get the fuck out of Alaska, and cut all ties. I absolutely hate realtors and think they are a scam, which is why I'm reluctant to put our condo on the market. Neither of us are thinking calmly.

If we pay cash for a new home, there will be no origination fee, but we are still going to pay several thousand in closing costs, right? Is there ANY scenario where you would buy a home in a town that you only intend to live in for one to two years? I mean, if you could be sure that values are going up, that would be one thing, but I keep trying to tell my wife that we really just got lucky with our current condo going up in value over the last three years.


arebelspy

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Re: Emotions, and rules of thumbs about buying.
« Reply #1 on: May 07, 2015, 11:39:47 AM »
Only if you are evaluating it as a rental property, purposefully buying it for that purpose (and it's a good investment) and just living it in a year first.

If you aren't planning on holding it as a rental, no way.

Selling and closing costs (on both ends) will hit ~10%, so even if you see 5-10% appreciation in that year (probably one of your better case scenarios), you'll be losing money.
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Poorman

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Re: Emotions, and rules of thumbs about buying.
« Reply #2 on: May 07, 2015, 12:33:17 PM »
It sounds like maybe your wife's goals are different from your own.  She wants to leave Alaska forever, but you want to keep your place and seem open to returning to Alaska eventually.  I think you guys might need to sit down and really get on the same page, no matter what course you decide.

There's no reason to buy unless you know for sure that you will stay put for 3-5 years.  Likewise, I don't see any reason to keep your current place unless the likelihood of returning to Alaska is pretty high.  (With your wife being against it, sounds like 50/50 at best.)  There's just too much uncertainty in your situation to be owning a personal residence.  You need mobility.  Renting is the better choice because it gives you the flexibility to move anytime you like.  Once you have found a place to lay down roots for the long term, then pay all cash for a house.

Retire-Canada

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Re: Emotions, and rules of thumbs about buying.
« Reply #3 on: May 07, 2015, 12:46:43 PM »
Rent out the condo via a management company. Decide what to do with it later.

Rent something for a year. Even if you were to stay in the WSU area longer term for some reason take a year to get to know the area and then buy a house with that knowledge.

Buying something for a year is silly.

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