Should we buy a new house?

Question

Here's our situation: Current house is 6 yrs old, good schools, o.k. neighborhood, but not the best. We like our house, but just a little too small. Everything is done, landscaping, and decorating. Currently on the market for 1 month with only 3 showings.
New house is brand new. Will need decorating and landscaping. It's in great neighborhood, good schools, Loads of space. My family could grow into this house. Do to builder discount, we're getting a great deal on this house. We close on it in June. Will lose 5,000 if we don't go thru with the closing. Since current house is not sold, we will have double mortgages, or we will have to look into renting it out.
I'm 36, my husband is 43, we have 3 young children. This is our dream house. My husband is starting to have second thoughts. What do you think.

Answer 1

Average time on the market these days is 4-6 months Dependant on neighborhood, and price. Myself I would rather lose 5K on the selling of the old house, because you will be ahead with the new one. And it sounds like that is what you want.

Answer 2

Buying a new home is an emotional purchase and many buyers romanticize about all the things a new home will bring. Be very careful of this, especially in this market. The home you purchased 6 years ago has appreciated tremendously: this new home may not appreciate as rapidly as your current home. I always advise my clients to look at their finances and make the best financial decision they can. Can you afford to pay both mortgages if you cannot find a renter? Do you have at least 6+ months of reserve in your bank account if one or both of you should loose your job or become ill or injured and unable to work? Risking your families' financial health right now to save some money on a new home with a low rate of appreciation on both homes may not be the best move. Your husband probably is feeling uneasy, because ultimately he will need to provide support for a new family member, the house! You will need window coverings, landscaping, upgrades, and a host of other items that could add up to 35K-50K depending on the home and your dreams. Make sure you add this into the equation. Many buyers stretched to get into homes two years ago and now owe more than their homes are worth. If they were new homes, they may still have dirt in the rear yard and no patio to even have a bbq on. Another thing to look at is whether or not the mortgage will be covered on the other home by the renter. If you have good cash flow, the decision might make great financial sense, if not, you will need to judge very carefully. The rental market is also very saturated right now with homes, you may have a harder time finding a good renter and keeping them long term. If you have a financial advisor, I would suggest running this move by them and getting professional advice. Real estate agents are not able to give financial advice unless they are licensed financial advisors as well. If you do not have a financial advisor, I would ask your real estate agent to recommend one. Loosing $5K now might save you from loosing 10's of thousands of dollars in the future and may prevent financial ruin if you make the wrong decision because of following your heart. Good luck with your decision.

Answer 3

It's normal to get nervous when you have two mortgages looming over your head. You still have a couple months to sell the current house, so I wouldn't get to nervous yet. Throwing that $5,000 isn't the best sounding idea either. You will have to let it all play out and make a decision when the time for paying two mortgages gets closer. If your current house is listed with a realtor there isn't many other things you can do. Summer is the best time to sell a house though, especially when you have kids.
Just give it time and see what happens in the next couple months. You might have to consider dropping the price of your current house. Your realtor should be able to give you advice on what he thinks of your asking price. Depending on where you live the housing market might not be so hot right now either...

Answer 4

It sounds to me like you have to move on! There is nothing good in life that doesn't come without sacrifice. If you don't move, you will always wonder "what if", and besides, it sounds like your family has grown and that you really could use more space. You are both still young, so the move, although anxiety-producing to some degree, will not kill you-just think of the anxiety as excitement! I know what it is like to fall in love with a house, because I have with mine-but still, they are only boxes on top of dirt! You will have many opportunities to fix up the new house the way you like.

The next 3-6 months are the best home-selling months. It could be that your house isn't selling because you are, in some ways, still reluctant to sell. Once you make the the committment, I bet a good offer comes strolling rightalong.

Best of luck!

Answer 5

Since it sounds like you already signed a purchase agreement, but you should have put a condition of hold and not buying your new house (like six months) until your old house is sold. It would have helped you out. But that's water under the bridge.

Now, you say you have had only three showings. Why? What is your real estate agent doing? How is he/she earning that 6% you're going to hand over? The agent works for you. Tell them you're going to find a new one at the end of the selling contract (usually three months) if the showings don't pick up.

Second, you say you've "decorated" your house. With what? Home buyers want to see themselves in your house, not you. You have three kids. Are their rooms decorated for kids? People without kids don't want to see Pooh-bear and Rugrats all over. Take out (hide) all of their toys and any "incriminating" pictures, wallpaper, etc.

Also look at the rest of the house. Is there alot of "unique" decorations, wall colors? Neutral is the word for the day. Again, you want to have the people seeing your house as their own. A blank canvas is the rule.

P.S. I'm building a home, and am planning on selling mine next month myself. Good luck (to us, both.)

Answer 6

The only problem with renting the old one out is if you keep it on the market, you would have to negotiate that in with the new buyers or the people renting the house out. Not only that, but if you rent it out and the renters tear it up, you may not sell it at all without major $$$ put into it.
If your $$ situation lets you have 2 mortgages, go for it... if not, think about what will be worse... losing $5000.00 now, or a foreclosure on your record later???

Answer 7

Depends where you are located. If you are in a severely overpriced area (CA, AZ or FL), I suggest selling your current home, invest the cash, rent and wait for the NEW homes to drop drastically. They already are out here in CA> New homes that were selling for 700k are now slashed to 520 with all the extras. Just be prepared that there might be a possibility of seeing your home value decrease and not increase in the coming 3-5 years. Good luck.

Answer 8

yes i think you should move house because just think woldnt it be nice to have change and if you cant stop dreaming about this new house go for it just do what youre minds telling you go with the flow .