From Leap of Faith to Putting Down Deep Roots: The Past 5 Months

by Kevin on May 18, 2011

We just bought a house.

Wait… what?

“Aren’t you the guy that just sold his other house and was relieved to be done with it?”

“Isn’t it a little soon to be buying again?”

“You must be insane!”

Valid points. But hear me out.

First, for the uninitiated to our saga: my wife and I embraced life as an adventure and moved to Knoxville, TN from Birmingham, AL. We moved at the end of December 2010. My wife quit her full-time teaching job with awesome benefits and we left behind a house for sale — meaning we maintained two residences without going broke. My wife picked up two part-time jobs to bring in some income, and we’ve made it.

We discovered what vacant insurance was and why we needed it. We negotiated like hell when we got an offer. And we finally accepted a low offer and explained our justification as to why. We even got value for our appliances (since the new owner acted like she didn’t want them) and closed on our house remotely.

We learned a lot. Then we learned some more.

So why now? Why did we buy?

We didn’t have the housing “itch”. We wanted to live in a house, absolutely. But there are right and wrong reasons to buy a house. I wrote about this in Should You Buy a House New Before Rates Go Up?:

Reasons to Buy a Home:

  • you have been saving up for a large down payment for a long time
  • you have researched various areas in your city and know how much you can afford
  • you know what sort of payment you can afford at the current financing rates
  • you know (as well as anyone really can) that you will be living in the same city for at least 10 years
  • you aren’t counting on home price appreciation to make your rich
  • you have been thinking about and discussing the possibility of purchasing a home for a long time – you aren’t rushing into a decision

We meet the above criteria. If you’re looking to get rich quick off of a home or you just really, really want to live in one without being financially prepared, then you’re making a mistake.

We’ve been saving since before we put up our house for sale in Birmingham. We anticipated losing money on our house. We moved with a substantial amount of cash in the bank to handle any unforeseen expenses. I’ve been incredibly blessed at both my work and in my freelance work. We’ve been able to build up a full down payment much faster than we anticipated.

We’ve lived in our area long enough to know where we do and do not want to live. We got the advice of many different people from various walks of life.

We aren’t counting on getting rich off of our home. We’re not looking to flip anything, or for the value to increase dramatically. This is key. We bought a house to live in for the very long term. We plan to start a family and put down deep roots where we’re at. We’ve always said (half-seriously) that the next move would be our last for the next 30 years. I’m not sure if we’ll accomplish just that, but we would be okay doing that in our current area.

The house we purchased, with the down payment we’re putting down, at the interest rate we’re getting… will increase our total monthly housing costs by about $200-$250. That’s including factoring in the difference in mortgage costs (vs. rent) as well as increased utilities. For that small price we’re getting a lot of square footage for our dollars. This is the place where we will be for a long, long time.

Is it scary? Absolutely. Are we excited? Unbelievably.

But we all know you don’t just walk in and have a house. There are steps to take. Home inspections. Tree risk assessments. Paint. (Oh Lord, not more painting!)

And moving…

Good thing we have a checklist.

I’m looking forward to sharing this new adventure with all of you. Thanks for sticking around for the ride. I hope our past experiences — taking a leap of faith to move, staging our house, selling from afar — and new experiences provide value in your own lives. I know we’re not the only ones buying or selling homes this year.

{ 3 comments }

John May 21, 2011 at 9:53 pm

We just did the same thing. We have been renting for 4 1/2 years, while looking for a permanent place. We ended up buying a house we previously rented, as the owner had moved back to live in it, but filed bankruptcy and was foreclosed upon. It is a little bigger than the one we were renting, but MUCH higher quality. We think we got a good deal, and the mortgage was almost the same as our rent. Best wishes. I hope we both made good decisions.

Crystal June 1, 2011 at 3:49 pm

Congrats on the new house! I am sorry about the painting…it hurts the frugal side of me, but I think I’ll hire people for that in the future…

TaraZ October 14, 2011 at 10:10 pm

Have you thought about writing an article on when housing is a good investment (i.e., based on the median income to median house price ratio, and the “rent vs. buy” calculators)?

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