Category: Home

It may have taken some time, but I finally have my own tiny slice of middle
class pie in the form of a house. And not just a house, but land, and trees,
and a strip of asphalt as a driveway. This is the end result of a long,
frustrating, vexing, and stressful process that began all the way back in 2014. A process resulting in 50
private house tours and open houses, thousands of real estate listings, and
countless sleepless nights. After all that hard work I ended up paying more
than I thought I would. I estimated it would cost me
$260,000 (with interest after the down payment), but in actually it will cost
me $310,000 (+ interest). A difference of $50,000 + interest. I also
underestimated my yearly houses costs by about $3,000 (estimated $5,500 with an
actual more around $20,000). The good news is I got exactly what I wanted
(garage, close to work, decent square footage, gas heat, quiet neighbor hood)
with only one draw back (an above ground pool).

Some Thoughts on the Process

1. The time of no financial obligations is over. I now have a very large
obligation (a mortgage for 30 years) and monthly bills of various forms. While
I hope to pay the mortgage off as quick as I can, monthly bills and quarterly
property tax payments are going to be no fun and will reduce the aggressive
savings plan I have had up to this point.

2. Dangerous financial waters ahead. While I do have some cushion to an
unexpected income loss (read job loss) I will be exposed for a bit to this
possibility. This will lesson with each paycheck, but it will always be a
possibility until the mortgage is paid and my investments start generating
enough money to live off of. That will be some time. A quick review of what
can happen if you do not pay is enough to keep me saving for those bills
and mortgage payments.

3. There are a lot of hungry mouths to feed when buying a home. Everyone
wants a cut of the action. The bank will add on a bunch of fees so you can take
out a mortgage, your lawyer has a fee to look over the agreements, the home
inspector wants a few dollars for every square foot he or she inspects. It can
be a little frustrating to see your hard earned green backs flowing out just so
you can buy a house, but they are providing a service, so it was not all a
waste.

4. A sense of melancholy. I had thought I would be very happy buying a
house, but for a few weeks or so I have felt pretty melancholy about the whole
affair. It is nice living very close work to work, and my friends and family
are only a 30 minute drive away, but something about living alone with all the
responsibilities that comes with that seems to be getting me down. I also have
very quickly changed my relationship with my parents. I am less child and more
family relation now. With time I think I will feel better, but it will take
some adjustment.

5. Heightened cost awareness. I am now very aware that I have to pay for
everything: food, electricity, heat. As such I have become hyper aware of
limiting when I can these costs. This is good for my bottom line, but perhaps
being so serious about turning lights on or off is of little importance in the
long term.

Ultimately, I am glad this has all been taken care of, but after exerting so
much time and effort what do I do now?

I have been at the house hunting gig for over a month now and I have learned
a couple things I would like to put to words in an ordered list. This is mostly
me just complaining so if you have better things to do (which if you are
reading my blog you probably do not), go do them.

1. You are buying a house for the next person who lives there.

You cannot just buy a house with only yourself in mind. You have to consider
the resell value which means you have to consider who might buy this house from
you. This means things like three bedrooms, good schools nearby, a decent
neighborhood, is of great importance even if you do not care at all. That two
bedroom on a busy road might be nice, but how can you sell that 10 years from
now to the family with three kids? This should not stop you from buying a house
that appeals to you, but keep it in mind.

2. House hunting is great for nosy people.

The most private place you can have is your home. Now how would you like
letting a bunch of strangers tramp around taking a bunch of photos, poking and
prodding in all your little hidey-holes. I am just acting in my best interest,
trying to find flaws in the property, but it is another magnitude of social
awkwardness to look in other people’s closets. I also now have a great quantity
of photos of other people’s houses.

3. House hunting is about convincing yourself to spend more money.

The first time you start considering to buy a house you will arbitrarily
pick a number and start to look at houses near that number. For me it was
$150k. Every house below that price is a crack house. Every house above that
price is a mansion. So unless you want to live like an extra on The Wire, you
bump that number up. Then when you are at $200k the houses start looking
better, but you also start seeing some real estate euphemisms like ‘needs sweat
equity’ or ‘perfect for a diy person’. This basically means the house stands
up, but you are gonna have to fix some stuff. I am pretty lazy about things
like that so you start thinking well, maybe I can bust it up to $250k and not
worry about stuff like that. Houses at this level are nice and even livable for
the most part, but they just are not quite there yet. It is like having eggs
with no bacon. Either the road the house is on is too busy, it is too far from
the highway, it abuts a train track, etc. So then you start thinking, maybe I
should stretch to $275k-$300k. Then you realize you exceeded your down payment
and bank loan and you have to stop. The point is you can always spend more
money on a house, at some point you need to compromise on something that is not
the price.

4. The easiest thing you can do is not buy a house.

I visited four houses, and looked at around a 100 hundred online listings at
this point. If this were a bar it would be 7:00AM, aka amateur hour. That said,
you can always find something you do not like about a house that would make you
not want to live there. Chief among them at this point is all the houses in
Massachusetts that have oil heat. So many promising prospects dashed because of
oil heat. Natural gas is cheaper home owners! Get your neighbors to band
together and get the gas company in to install a line. Then sell your house to
me for a reasonable price. This is just one example, but it is a whole litany
of big/tiny things like this that just make it so easy to not do anything. It
is of course not helping that it generally takes me forever to change anything.
I literally have worn the same shoes for five years because I cannot be
bothered to buy new ones.

5. This task is not exciting, you are not a better person for doing it.

People keep saying, “It is great you are looking for a house at your age.”
or “It must be fun to go house touring.” The last thing I need is more people
to inflate my head
further. I am not especially smart or good with money, I just happen to be
easily amused which means most of my money ends up getting saved. It is real
easy to get a house down payment going if you just SAVE MONEY. Everyone also
needs to disabuse themselves of the notion that this task is at all
entertaining. Every other homeowner must be so much more level minded than me,
because I am going mental running through all the possibilities here. This will
probably be the most expensive thing I have ever bought. Which means I have to
be extremely careful I do not buy a dud or a home that needs a lot of work or a
home that will lose all its value or any number of other obvious/not obvious
pitfalls I teeter on the edge of falling into daily. I cannot wait until I am
done with the whole sordid affair and have to (maybe) never deal with it ever
again.

So despite all that complaining I still want to do this. If that does
not make you question my mental state, stay tuned readers yet more disasters
await!

I have started to actually visit
houses with the intent to evaluate them
for purchase so it seems important that I justify why I am so insistent on
buying a house. My reasoning stems from the concrete to the nebulous.

1. A Generally Safe Financial Bet

Lets look at the big picture here:
Source

It is a bit misleading to see just the chart so the source bears reading,
but for the most part the chart tells a pretty convincing story. Generally the
price of a home will rise. The actual realized profit is mitigated by upkeep
costs, mortgage interest, real estate taxes, inflation, but in my estimation
this is a safe bet to make. In the best case I make some money. If I just break
even that is ok too, because then it is like I lived someplace rent free. If I
lose money, that is no good, but the market would have to be radically
different for the loss to be painful. Not to say that such things are
impossible, as evidenced by the downward trend on the graph. If I am going to
spend money to pay for housing I may as well try and have something to show for
it at the end as opposed to renting where I will have nothing.

2. Good Timing

Refer back to the graph and see how we are on a downward trend. Housing
prices now have not yet returned to their 2008 levels. There is no guarantee
such a thing will happen, but generally the housing market falls a cycle of
boom, bust, recovery.
We had our boom, now we are in a bust (slump) where prices are depressed.
Eventually, those prices will rise as we start to boom again. Best buy now when
the prices are lower and ride the wave up. This is no guarantee, but it is the
historical model.

3. I Could Never Live With A Landlord

I have always had a mistrust of authority. This does not carry over into the
workplace, as my employer buys control of me through my salary and benefits.
But the idea that I would willingly pay someone money and still let them exert
some authority of my domicile is not reconcilable. They may be completely
trustworthy and reasonable, but I would never be able to fully forgot that this
is their place, I do not own it, I have little to no influence over it, and
they can do as they will with it (minus certain legal restrictions). If I own a
house then the only authority over that house will be me.

4. I Need Space

I have spent my entire life living in a single room. Granted it is a
statement taken to an absurd exaggeration, but that is the way it feels. I want
space to spread things out. I want an office to fill with my book and machines,
I want a workshop stocked with tools and in flight projects, I want a living
room I can nap in. An apartment is not going to give me that, or at least my
budget is not going to allow for that. I house can give me all the space I will
need.

5. I Want To Build A Home

This is where I start to go off the track a little. Clearly if I am buying a
house that already exists I do not want to physically build a home. The idea
here is I want to build a place for the people I know. We are diaspora,
scattered. I want common ground if you will. A place anyone can come at any
time. Even more than that though I want people to think of it as their house as
much as it is mine. I may be on the financial and legal hook, but I do not want
to people think of this place as my home, but as the home of everyone I
know.

6. It Is Time For Some Risk

This reason is almost totally devoid from my standard character, but life
has just been too safe. This may be my most regrettable reason in the future,
but I just want more stochasticity. I want to take the risk that this plan will
absolutely lead to nothing but disaster. That is exciting or to put another way
exhilarating. I have always suspected I had some well repressed gambling
tendencies and this may be an unfortunate time for their presence to be known,
still I love the idea of taking a big chance, considering such a huge
payoff.