This is the part of house-hunting that I hate.
Deciding which houses you like, which are in your price range? Can you afford to go a bit above your original budget? If we go slightly above now, will things be tight just in the short term? or in the long term? Is it worth an extra 20,000 dollar of house if it means you can see yourself staying there for quite some time (maybe over 10 years) or should you not go up that much and get a house you are pretty sure you'd have to move out of in 5 years? What house has the better location? better neighborhood? Is it close to stores and parks and a library?
So many things to think about. So many angles to look at.
We currently have 3 houses in the running. I am going to write a lot, mostly to help me sort out what's flying around in my head so feel free to not read ;-)
House A is the most expensive. It has the most space. It is a 2 story house with a finished English basement. It backs to a wetland so they won't build back there. It is currently one of the lower priced homes in the neighborhood (one is 100,000 more than the house we are looking at). It's in a good neighborhood. We saw kids out the first time we went to visit it. It is in pretty good shape - we would want to replace carpet and paint the walls. We found one broken window, but aside from that, everything is okay in the house. All the appliances come with the house. It was built in 94, so not too old really. It has 4 bedrooms that are okay size and 2 full baths and 2 half baths. We look at it and think we could easily stay there for quite sometime and be happy and not squished. There is a 2 level deck (although the top deck is about the size of a postage stame!). You can get to the deck from the kitchen or from the back yard. The basement is mostly finished (aside from an unfinished storage area) and is half above ground, so all three levels of the house get natural light - which is a HUGE plus for me. The bummer is that it does have the smallest bedroom sizes and is 20,000 over what we budgeted for (and that is assuming we can get them to come down on the price). It also has the highest taxes (double the tax of the house with the lowest tax) This would mean things would be tight. It may mean that I might have to find soem work (along the lines of babysitting one child in the home). But in 2-3 years, after dh gets a few modest raises (and assuming taxes don't sky rocket) we would be okay. And so what we are trying to decide is if 2 years of struggling is worth it to have the house that has the longest life for our family? I might also add that with a few upgrades (of appliances, counters, floors) and some minor things in the house, it could easily become one of higher houses in the neighborhood, so resale value looks good.
House B is the second highest price. It is 10,000 over our current budget. It is a split-level house with both basement and subbasement. It has the cheapest taxes. We could be okay in the house for the next two years although things wouldn't be tight, there wouldn't be too many extras, but in a few years, with a few modest raises for dh and assuming taxes don't skyrocket to match surrounding areas, things could be quite comfortable for us. It is actually the one that we already put an offer on and had it rejected. It has 4 bedrooms, which are slightly bigger than house A. The kitchen is smaller, but nicer (new appliances, new counter, new cabinents), the house has 4 living levels - the bedrooms, the main floor, the basement, the sub-basement. There is a two level deck that you can access from both he kitchen and the basement (so it's walk-out). The sub-basement is completely underground, so no natural lighting but it is finished (though in a very plain, cheap way - we would want to change it). The house backs to a mini-forest so no one would go behind us. It has a pool. The work we would need to do would be to replace all the windows, change the carpet, repaint all the walls but the main floor, replace carpet, the deck may need to be replaced completely - we aren't sure. Although it is in an good neighborhood, in general this has the location that is pretty close to a not so desirable area. The master bathroom is the crummiest of them all. And it will have the lowest rate of appreciation. However, that said, dh and I both really LOVED it. Probably we loved it the most, aside from we wish it were a bit bigger.
House C is okay, but really, it is in the running because of price. We could get it for probably 10-15,000 lower than our budget (depending on how much they are willing to negotiate). It has the biggest lot. It is pretty much the exact same layout of House C, however, the kitchen is not new - but it is bigger and it is nice. The sub-basement is not finished. The basement is only half-above ground so it is not walk-out. It does not have any fireplace (and the other 2 both have one). The master bath is better than House B, but not as good as house C. It is in a good neighborhood and would appreciate well (but probably not as well as house A). However, if the market improved around here, it would jump up in value about 3-5% immediately. We would definitely need to finish that sub-basement if we wanted to stay more than a few years. Even though it has the biggest yard, it does back up to other houses. In the grand scheme of things that's not too bad, other than the fact the other two don't. The only nice thing is that if we went below budget we would have money left to buy new furniture, possibly upgrade a few small things, and maybe even put in a pool and nice deck to improve the backyard. But, it is a nice house, in our price range and had we not seen House A nad House B, we probably would have put in an offer today.
Every house has it's up-side and down-side. When you compare them side by side they are mostly pretty even (although their strength and weaknesses are each quite different).
We went and saw House A and C again today with the kids. They voted for House A. My oldes even said she would rather have House A over a pool. We are going to try to get into House B tomorrow. We want to revisit it having seen other houses and see how we feel about it.
At this point we are leaning towards trying to get House A for as little as possible - hoping that they will come down AND we did look into other mortgage rates on-line today and saw we could get almost an entire point lower from another bank so tomorrow dh will be calling them to get pre-approved. We also have the ability to pay 1-2 points (depending on which house for which price) and that has the possibilty of knocking the mortgage APR down a bit more - which over the life of the loan would save us a nice chunk of change.
I hope that tomorrow night dh and I can kind of figure out what to do about these houses.