[quote=bobby]a little update.
this time I will use concrete numbers as this will be more illustrative.
wife and I dutifully go to open houses every Sunday 1-4pm. we had originally budgeted $900-950K and below (in order to go under the conforming amount of $625K) and get the best mortgage rates. We could borrow more but don’t want to. we found out that we don’t like anything at this price range.
So we started checking out pricier houses a couple of weeks ago.
We had been going without an agent but met one who is very eager to show us some local properties. He showed us properties running about $1 to 1.1 million. My wife love them. This agent asked us to place bid of $25-50K over asking price. He thinks this will give us the best chance.
I am reluctant to do this b/c this sounds like a game. Also this requires stretching the budget.
Wife and I decided to wait b/c we saw how crowded the open houses are – market is likely very heated.
To confirm our suspicion, our agent let us know the result of the properties we are interested in.
property 1. Asking $1055K. Sold in 4 days after accepting bid (we drove by and verified this. Likely all cash and no contigency)
property 2. Asking $1050K. Sold in 6 days at $1062 (seller agent is partner of our RE agent so he got the scoop).
property 3. Asking $975. In escrow after 3 days. not sure of amount.
we think we are better of waiting till fall. We will still be searching but it’s looking like 2005 all over again.[/quote]
bobby, I am in agreement with SDR that you take a short break to reassess your wants. It sounds like your spouse’s wants trump yours. In the meantime, find out exactly what properties 1 and 3 actually sold for. You need to have a very candid discussion with your spouse about her continuing to be employed FT into oblivion (children or no children), IMHO (taking 6 to 10-week paid maternity leaves). This is the reality. You need to discuss with her in detail why she thinks she needs more square footage or a more modernized house than what is available in your price range. You need to discuss your ability to remodel a property room by room, even if you have to have the work contracted and if this will leave you feeling more comfortable than taking on a jumbo conforming mtg.
Your mutual housing decisions are a two-way street. If you wish to ride a bike to work and save gas, your wants should also be considered by your spouse, IMO.
Your spouse needs to understand exactly what your life will be like if you and she have to commute over a bridge or down to SJ/Morgan Hill every day and also possibly pick up kids after work (in order for her to get what she wants in your price range).
You don’t really sound like you are comfortable paying $1M for a house and your preferred area (peninsula) will NOT become cheaper, IMO. The “season” you’re shopping in makes no difference. I would not take out a mortgage for $100-$200K more than I was comfortable with, even if my spouse wanted to. It is a sure recipe for marital strife down the road and could put your family home at risk for foreclosure if you (likely) find yourself having to borrow (from your “downpayment equity”) in the future to survive.
Sometimes it takes a little break from “shopping” while you gather information in order to come back in as a RE buyer with a little more reasonable expectations.
