How Not To Buy A House

If you’re unaware, Miss Blinkin and I have been looking to buy a house. When I was organizing my life, I made an assumption that purchasing a home isn’t too time-consuming. I was wrong.

We have spent the last 2 days moping around after we lost a bidding war. Allow me to give you the details:

• List Price: $339,000
• Our original offer: $330,000

After doing some research, we found that the average home in our area is selling at 92% of the List Price. With this information in mind, we were thinking that a reasonable offer was $311,000 and up. After all, “this is a buyer’s market!” At least that’s what I’m told.

Buyer’s Market Bull $H!+

There was already an offer on the table while we were walking through the house, so we knew we had to go in aggressively. We thought an offer of $330,000 would get the job done. After receiving our offer, the seller’s agent went back to the first offer and said “FYI, we received another offer just in case you want to reconsider your original number.”

The seller’s agent then came back to us and said “now would be a great time for you guys to present your  best offer.” Assuming the other couple increased their offer, we knew we would have to increase ours to stay in the game (even though we thought we already had a strong offer).

The 2 scenarios we played out in our heads were:

1. We hold tight on our first offer and potentially lose the house over a few thousand dollars.
2. We unnecessarily increase our offer but end up with a house we love.

Of the possible scenarios, we thought the latter would be annoying, but the former would be devastating.

We Increased Our Offer

After some quick considerations (and another walk-through of the property) we increased our offer from $330,000 to $339,500 ($500 above the asking price). If there’s one real estate tip that’s been drilled into my head over the past few years, it’s “never pay the list price when buying a home.” But since we loved this house, we thought it was necessary.

Necessary it was. We lost the house.

In approximately 30 days (if nothing falls through), we’ll find out exactly how much we missed out by. This will help answer all the questions circling my mind.

Was their offer actually higher or do they hate the last name “Blinkin?”

We’ll soon find out.

I understand there are more devastating disasters but I can’t help but wonder if we should have thought differently.

Do The Math

By increasing our offer to $345,000 from $330,000 I’m confident we could have secured the deal.

Now the average Joe may agree but argue that it would have cost us $15,000. Right?

Wrong.

Worst case scenario, the increased offer would have only cost us $9000 – or approximately $75/month if we stayed in the home 10 years. I’m upset we lost the home over what-could-have-been 1-2 meals/month.

Numbers based on 10-year ARM 2.875%

$330,000 offer

$66,000 down

$264,000 financed

$1095 pmt

$197400 spent in 10 years

 

$339,000 offer

$67,800 down

$271,200 financed

$1125 pmt

$202800 spent in 10 years

 

$345,000 offer

$69,000 down

$276,000 financed

$1145 pmt

$206400 spent in 10 years

Friends and family members have offered their condolences, reassuring us that “we’ll find something better” or “it just wasn’t meant to be.” I’m still pissed.

Readers: What advice do you have? Any uplifting words to regain my optimism?