The following is adapted from a recent forum post by user Hyperbola.
After a year of occasionally posting comments on this blog, it’s only fair to disclose that my wife and I just bought a house in Woodinville! My rationale about the overall market hasn’t changed — I still think we would have gotten a better deal by waiting. There were many factors that influenced our decision:
- The house is only a few years old and in good condition.
- The price was good for the neighborhood and recent comps.
- The commute to Redmond/Bellevue is about the same as our current apartment.
- Our (downtown Seattle) apartment is too small.
- We find significant sentimental value in owning our home. We wanted to be able to redecorate, make improvements, and not have to worry about being forced to move if our unit goes condo.
- We were only willing to look at houses we could reasonably stay in for 10 years or more.
- We were only willing to consider arrangements where my wife could stop working once we start a family.
- Our plan is to pay off all loans except a $417k 1st mortgage within 3 years. For the first 3 years, our net expenses will be quite a bit more than our apartment. After that, it’ll be less than our apartment by several hundred. Of course, our house costs much less than our apartment would sell for, so this is apples to oranges. In any case, our expenses are well within our means, but we won’t be saving as much for stocks/bonds as before.
- We were not willing to move to rent somewhere in the burbs with enough space, and then move again when the dust settles from the bust.
- Our loan package is as follows: $417k 1st mortgage, with a note rate of 6.25%. 10% and change for a HELOC at PRIME+1.5, with a teaser rate. 10% down.
The RedFin experience was perfect for us — we did the research that we would be doing anyway and got 2% back. The field agent that actually accompanied us to the property did a good job looking out for us, but it wasn’t the same person as the agent in their office that helped us negotiate the paperwork. It really didn’t matter; they stayed in touch. Our loan agent got very confused when we wanted the rebate to be applied to our closing costs. She kept trying to bully us into using the rest on points instead of taking a check after closing, saying we weren’t allowed to take a credit more than closing costs, etc.
The biggest problem by far was the seller and their agent being completely dishonest with us (and each other) about the repairs and their (in)ability to move out on time. Ended up closing one day late after a standoff between us, the seller, and our loan agent. Yuck!
But the deal is done as of yesterday and we are officially homeowners!
Some people seem to be under the impression that Seattle Bubble is a site for people that think buying a home is never a good idea. On the contrary, the purpose of Seattle Bubble is to educate people about the realities of the housing market, and equip them with the facts so they can make a decision based on reality instead of some real estate agent’s slick sales pitch.
Hyperbola and his wife went into the home buying process with both eyes open, weighed the risks and benefits, and decided to buy. He got a loan he could afford, and bought a house he will be happy staying in for at least 10 years. This is exactly what Seattle Bubble has been promoting here since day one (here’s an example post from April 2006).
Congratulations to Hyperbola. He and his wife get that you buy a home as a place to live, not as some sort of can’t lose investment account. I agree with what Hyperbola said in his post, that they most likely could have gotten a better deal by waiting, but they were comfortable with the price and the risk, and they bought smart. Good for them.