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nope, not yet

April 25th, 2017 at 09:40 pm

Nope not yet. No house. Offer way, way too low. But my realtor said a sucker born everyday. Apparently they had multiple offers and ended up about 10% above asking price without a home inspection or mortgage/appraisal contingency. No getting out of this for the suckers/buyers. Trust me if they need these buyers to close because now they know there is a roof leak and I believe they'd have to disclose if the deal falls apart. But I doubt it will. It would be really interesting to see what happens.

On another note, I spoke to a friend who is in over her head with her house. I made a lot of financial suggestions and I think she really shared with me all the details because she lives where we used to live and it's easier to talk/chat with someone who doesn't judge and can't see you face to face. It's easier than admitting you made a mistake to a friend you see all the time in person. Truth is it's easy to get into financial trouble even though you know better.

So what happened? Well when we moved two years ago they had just bought a massive fixer house for $1.2M. They are planning on moving in this Friday about 2 years later. The renovations initially budgeted at $600-800k turned into $1.6-$1.8m so they are into the house for $3M. Yes those are real numbers where I used to live.

Anyway the monthly note on the place hasn't been too bad since they didn't finance the entire renovation but paid a lot of cash out of pocket. They are out $8k/month. The problem? Her husband switched jobs last year into a commission only job and hasn't made an income in a year because he hasn't closed any deals. Now the income they were counting on hasn't appeared and they have been burning through savings.

She's stayed at home with their 3 kids but isn't sure what to do. She's been at home for 7 years now. And she realizes it's not so easy to find a job. But it's a difficult position to be in because her husband could take a salary position but it might not be enough to keep up with the lifestyle they have. Or she could go back to work but it might not be at the salary they hope. He also could find a job that could support their lifestyle but it would likely mean moving. She isn't sure what to do. Without income it could be difficult to qualify for a conventional mortgage since right now they have a construction loan. They became aware of this yesterday. They have savings but the bank isn't counting only on their equities.

They could rent out the house I suggested but she isn't sure where they would live since they are moving out of their rental. I also suggested looking for any high paying job. I think a dream house can come and go. Maybe it wasn't meant to be.

Going through this right now I'm really talking myself into accepting and understanding that no house is perfect. There is not only 1 dream house in the world. And it's super easy to get caught up in a dream. Even the most financially savvy people can get caught up in emotion over logic.

6 Responses to “nope, not yet”

  1. creditcardfree Says:

    Yes, emotion over logic happens to all of us at different times. That's why money is personal. I'd say they both need to be looking for any job to bring in any income. And your idea to rent the new large home out was a good one. They may need to find another rental if the jobs can't be found.

    Sorry about the house, but I think you at least went in with eyes wide open. Another house will come that is probably even better! Hang in there.

  2. Carol Says:

    It's too bad they refused your offer, but how good that you had that home inspection! The story about your friend scares me -- wow! I hope they make some decisions that work out better ASAP.

  3. CB in the City Says:

    I think you handled it wisely; a low-ball offer on a house with problems makes sense. I'm sorry about your friends. Sometimes a high income is a curse; it convinces you that you are infallible, but it can disappear just like that.

  4. rob62521 Says:

    Smart of you for that home inspection and you are right, there is more than one dream house out there.

  5. Butterscotch Says:

    I have never heard of a commission only job. Is that even legal? Isn't some kind of base required by law? Whatever that job is it sounds like a huge scam to be working for two years and not make any money.

  6. LivingAlmostLarge Says:

    Emotion can easily overtake logic at any given time. I think personally my friends might want to consider just letting the house go by selling it now since it's spring season. Best time to sell. I think they are making a mistake holding on for 2-3 months and then putting it on if no income situation changes. I think even if the income situation changes it's still a very expensive home of $8-9k/month and it may not be sustainable. In which case they are delaying the inevitable.

    Another house will come available I agree. It's not the only choice. High incomes can easily make you feel infalliable. I know we may have to compromise but at least I can pray it won't make me feel like I've done something not smart to have bought something in ignorance.

    Yes commission only jobs can be very common. It's pretty much all small business owners. If a deal hits they make it big and if it doesn't. Then they are in trouble. A year without income means they had a lot of leeway and they were building a house and running through even more savings. But I'm not sure taking this sort of job risk with a house on the line was the best idea.

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