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twinmma: Both the homes are new constructions, estimated the amounts (hoa, other costs) to be the same for both. I have a complete excel sheet which I have filled up. Below are some costs I am considering which are coming up to be the same for both..
Margery: I donot think it can be cut into half acre lots and sell em.,
Also we are expecting our baby sometime in December, he will be our first baby and how does it play in terms of buying power of a home. How are the schools in Loudoun county for him growing ahead?. Appreciate your time and answers.
Costs:
Cox AT & T Phone Bill Credit Cards Kids Gas- Electricity Water Bill Trash Bill Car Loan Mortgage or Rent Transportation (Metro +Gas) Future Expenses Car Insurance Food & Groceries Health Insurance TV Dish Network Vonage Internet HOA Life Insurance Children Education Fund dry cleaning Care for parents Medical/Dental Bill Restaurant Entertainment Health Club and Recreation Children Expenses School Tuition House CleaningVacations Books CDS+tapes+Dvd newspapers yard work gifts major purchases furniture clothing misc expenses
I firmly believe a home is what you make it. Sounds like the properties offer similar amenitites except for lot size. Could you potentially qualify how much enjoyment you would get out of this? Me, I'd rather have the cushion of the extra $$.
Claire, What do you think about investment wise? The 1000$ more towards the first home in the long run - may fetch more return than the second -May be may not be. Whats your catch on that?
I would not count on extra land (on your lot) as a big investment. Sure, most of the value of a property is in the land, but part of that comes from the development potential. If you could subdivide lots, or the the area were rezoned for higher density or commercial, then the land might have an investment value. Also, if the house is very small but the neighborhood/market support tearing down or making a large addition (that the land would facilitate), a future buyer might value that. BUT, for many buyers these days, having a lot of land is not desirable because of the work associated.
My view comes from my neighborhood which is admittedly a historic district so development is more highly controlled than most places -- the development potential of any extra land is less. Houses with large lots routinely sell for less than their assessed value (based on predicted value because of amount of land) while houses with small lots often sell for significantly over assessed value. The extra land is not as highly valued because the buyer would only benefit from it if, for example, the house burned down and they had to construct something completely new.
If the extra land is worth the extra money to *you* -- you value the beauty, recreation potential, how you see your family living there, etc. -- then go for it. But, absent some other facts that haven't been presented here, I wouldn't do it as an investment or over stretch myself for the extra land.
Quote:
Originally Posted by hinva
Claire, What do you think about investment wise? The 1000$ more towards the first home in the long run - may fetch more return than the second -May be may not be. Whats your catch on that?
Thanks Geniegrl, nice analysis- agree w/t you completely. Beside the acre lot the sqft of the first home is around 4000 while the second one is 3000. The second one is fully furnished(basement), while the first one is not. First one looks good from outside and a grand appearance with a open view of Family-Kitchen-Library, while the second one has a good family-kitchen and library but not as grand looking as the first one.
We are concerned whether the extra 1000$ per month would become a burden as we move ahead, my realtor tells that it would be ok since our incomes will grow; I am more conservative and judicious while spending the extra money. Even though I like the first home, but the second home provides the necessary things that we need in a home, so we both are veering to go for second instead of first one, kind of a sacrifice because we don't want to take that extra risk.
But, we also think that if we take the second home, we might move to much bigger home in 7 years from now, but the prices and interest rates would be no way closer to what they are now and buying a big home might be a better investment now than a smaller one later.
I didn't define clearly what's my first home is in the first post; here it is. Its a 4000 sqft 1 acre lot home closer to 820's while the second one is 3000 sqft with 11000 sqft in 650's (Basement finished) in loudoun county.
Please let me know your thoughts; Thanks again for all your time.
We are concerned whether the extra 1000$ per month would become a burden as we move ahead, my realtor tells that it would be ok since our incomes will grow;
Lol, I guess your realtor has a great crystal ball.
Personally, if home #2 has everything you need, I would definitely go w/ the much lower monthly payment. Take the 1,000 a month and put in savings for your child's college.
(1) Realtors will always tell you that anything and everything will be OK. She/he wants you to buy, and the bigger the house sale price, the bigger the commission.
(2) Add to your Excel lists of costs: Virginia's wonderful car tax and local (not just annual state) registration fees!
(3) Bigger is not necessarily better. More in utility costs, for one. For a couple new to Va. homeownership and expecting a child, you will be surprised (and maybe you already are) about the cost of living here and how there are always expenses that you never imagined. Like, if your husband takes VRE to work, how will he be getting between home and train station? He may have to pay to park somewhere. Or, you might find yourselves having to take the Dulles Toll Road on workdays--those tolls (and parking for wherever you two will work) will add up very quickly.
(4) You would be wise to live in your comfort zone, financially. There's always a 2nd, 3rd or 4th house. I think the "grand looking" spaces are making you googly-eyed, and at this point, your lifestyle is drastically changing with a child on the way. I just think that once you settle in somewhere, you're going to be scratching a few things off your list of expenses--a lot of meals out, cd/book/etc purchases, gift spending will be going out the window very soon after your first few months seeing how much the gas pump registers whenever you fill up the tank(s) and how many diapers your boy will be going through!
So I guess you can figure out which house I'd lean toward. Northern Virginia is still not out of the economic slump, and it won't be for a while yet. Don't need a crystal ball to see that!
Last edited by persnicketygal; 09-26-2010 at 11:24 PM..
Reason: missed a point
Location: Chapel Hill, NC, formerly NoVA and Phila
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Personally, I would buy the house that isn't going to stretch you financially, especially with a baby on the way. Have you factored in daycare costs into your living expenses or the loss of one income if either you or your spouse stays home? Diapers? Formula (if not planning on nursing)? Do you have a well-funded emergency fund for potential job loss, illness, major car or house repairs? Are you currently saving for retirement? Will you be establishing an education fund for your child? Will you be having another child in a few years?
It is easy to underestimate the costs of homeownership and just living in general even without owning a home. Do you have a monthly budget written out that lists all of your expenses and accounts for items mentioned above? If you do and the $1000 difference in monthly payments truly is disposable after taking into account everything else, then buy the house you love. If the $1000 difference can be going toward an emergency fund, retirement, and an education fund for child then don't strap yourself to high house payments.
Furhtermore, consider the lifestyle you like to lead. If all of your money is going toward a house payment, will you be okay with living a frugal lifestyle - not eating out much, skipping vacations, limiting entertainment activities for you and your child? Or do you like going out to eat, going to the beach/DisneyWorld, joining classes, etc. With a smaller house payment, you can do more things.
Lastly, while your incomes may grow down the road as your realtor suggests, your expenses will, too. Daycare turns into preschool. There are activities such as Gymboree and soccer. When your child is 7-10 there may be braces. There will always be clothing which gets pricier as they get older (fewer hand-me-downs), outings to amusement parks and concerts. Then they turn 16 and there are cars (insurance, gas). And of course there is college. When your baby is 2 or 3 baby two may come along and there are nearly double daycare costs or perhaps a job must be quit because it doesn't make financial sense to work any more with two in daycare.
Again, you have to consider your lifestyle and personalities. When estimating costs, be conservative - for the house, for children, for life's little surprises that pop up. $1000 per month goes a long way toward paying for those things.
Too general on your #1 point...not all realtors will do this. I have worked with MANY realtors and am licensed. I had a wonderful realtor who basically told us to pound sand when buying our first home. He basically said you can't afford it. We waited a year and went back to him. He helped us find a home we could afford without getting us in over our head. He explained that just b/c the bank will give you more doesn't mean you should use it. And I have worked with several others who will tell you this. That being said, I have worked with some bad realtors too who the only thing that matters is bottom line for them. YOu just have to weed through the bad ones.
Quote:
Originally Posted by persnicketygal
(1) Realtors will always tell you that anything and everything will be OK. She/he wants you to buy, and the bigger the house sale price, the bigger the commission.
(2) Add to your Excel lists of costs: Virginia's wonderful car tax and local (not just annual state) registration fees!
(3) Bigger is not necessarily better. More in utility costs, for one. For a couple new to Va. homeownership and expecting a child, you will be surprised (and maybe you already are) about the cost of living here and how there are always expenses that you never imagined. Like, if your husband takes VRE to work, how will he be getting between home and train station? He may have to pay to park somewhere. Or, you might find yourselves having to take the Dulles Toll Road on workdays--those tolls (and parking for wherever you two will work) will add up very quickly.
(4) You would be wise to live in your comfort zone, financially. There's always a 2nd, 3rd or 4th house. I think the "grand looking" spaces are making you googly-eyed, and at this point, your lifestyle is drastically changing with a child on the way. I just think that once you settle in somewhere, you're going to be scratching a few things off your list of expenses--a lot of meals out, cd/book/etc purchases, gift spending will be going out the window very soon after your first few months seeing how much the gas pump registers whenever you fill up the tank(s) and how many diapers your boy will be going through!
So I guess you can figure out which house I'd lean toward. Northern Virginia is still not out of the economic slump, and it won't be for a while yet. Don't need a crystal ball to see that!
Normie makes a lot of good points. I'm in my mid 40's and have owned a couple of properties and will tell you that needs/wants/desires in a home change a lot over the years, especially with kids.
You mention that the homes are new construction. Have you made a budget for window treatments and possible improvements you might want to make? We bought a house that was 3 years old and fell in love w/ it, but still found things we wanted to improve.
Bottom line - money gives you choices and your families happiness doesn't rely on sq footage or a large backyard.
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