Why I Don't Care that I May Have Overpaid for My House
I may have overpaid for my house. This is pretty surprising behavior, coming from someone who routinely gets strange looks at the grocery store for doing things like stocking up on twelve-packs of soda when they're on sale for $2.00. So why on earth would I blow off how I could have gotten a house for a lot less money? Well, there's a lot more to buying a house than looking at the price tag.1. I had to move (sort of). Making the decision to buy a house when you are in a situation where you have to move is never ideal, but it's a situation many people find themselves in. While I technically did not have to move, as I could have continued living in an apartment where my rent was unceremoniosly increased every month, my privacy was repeatedly invaded, the building-wide fire alarm went off at least once a month, I did not feel safe, and roaches were taking over ever inch of my living space, I had reached a breaking point where I no longer felt able to live under those conditions or risk living under similar conditions in another apartment, as most of the apartments I'd lived in had considerable issues with some combination of noise, maintenance, pests, and safety. For the sake of my sanity, and perhaps my safety, I needed a dramatic improvement in quality of life. So I "had to" move and I "had to" buy a house (condo living just seemed like a worse form of apartment living to me, with higher stakes and decreased mobility).
2. There were very few options in my price range. After I started house hunting, I quickly realized that the amount I had set out to pay for a house wasn't an option. At best, it might be an okay amount to spend in the short-term, but I knew it would be a poor decision in the long term. I learned that I was going to have to find a way to spend considerably more unless I wanted to live on a very busy street, in an unsafe neighborhood, or in a very run-down house. In the short run, some of these tradeoffs might have seemed acceptable, but since one of the major reasons I was moving was to improve my quality of life and since I wanted to at least have the option of living in the same house for the rest of my life, I decided to take a more long-term view and stretch my budget to get a nicer place.
3. I know I can make up for part of the cost by paying off my mortgage early, refinancing at a lower interest rate, or selling at a profit someday. Yes, I could also do these things with a less expensive home, saving myself even more money, but at least there are ways to decrease the total cost of this home, should I choose to take advantage of them.
4. Without overpaying, I wouldn't have gotten this house. My boyfriend and I only looked at 13 houses because there were so few options in our bottom-of-the-market price range, but we felt and still feel that this was the one and only right house for us (on the market and in our price range, that is), and we have continued to feel this way even after continuing to look at listings for other homes that have come on the market in our area in the months following our purchase. We bought a foreclosure, and at the bottom of the market, houses were being snatched up in no time at all. We acted quickly and put in an offer slightly over the bank's asking price, rather than underbidding by several thousand as our very experience agent suggested because he felt the house was overpriced. But the bank accepted our offer almost immediately, and on a weekend, no less. We could have offered less, but we didn't feel that the risk of ending up in a lesser house or continuing to rent was worth the possibility of saving this money. We knew that in our price range, we had come across a uniquely nice foreclosure, and that we wouldn't be the only people to notice those things.
5. I wanted someone else to pay for my closing costs. One of the things I was long dreading about buying a house was dealing with the ripoff of closing costs. Books and articles (including articles I've written) will tell you that many closing costs are negotiable and that if you present yourself as a savvy consumer and stand firm, you can get many of them waived. Well, I wasn't able to get some of my bogus closing costs waived, and I had a sense that might be the case. Rather than stressing out over every penny (or, as the case was, every hundred dollars), I wanted the seller to pay my closing costs. I also wanted to reduce the amount of cash I needed to come up with at the outset, since the foreclosure needed some work to be a pleasant place to live. I knew that asking for thousands of dollars in closing costs would be a lot more likely to go over if I put in an attractive offer on the house. And I did get my closing costs paid. I only had to come up with the down payment.
6. Sometimes money does buy happiness. I have, in fact, been much happier since I moved out of the apartment and into the house. At the rate the apartment situation was deteriorating, with the constant rent increases and burgeoning roach population, I am extremely grateful to have spent the last nine months living in a clean, safe environment where (so far) the monthly payments have been the same every month. Though it has cost me much, much more to live in this house than it would have cost me to continue living in the apartment, and my disposable income has decreased dramatically, it has been worth it.
7. I had to consider someone else's wishes. If I were still single (and, let's pretend, for the sake of argument, that I could afford to buy a house on my income alone), I would have chosen to move to another apartment and wait for the absolute perfect house to come along (the one I bought, though the best available, is not absolutely perfect). But my boyfriend did not want to move twice. And it wasn't just that he casually didn't want to move twice--he vehemently didn't want to move twice. There are not a lot of things that my boyfriend insists on. He is extremely easy to get along with. So the fact that this was so important to him was something I felt I had to take seriously. Some people really hate moving. I am not one of them, because I don't have a lot of stuff and I like the change of scenery, but I get it. Moving takes a lot more time and effort than what happens on the moving day itself. It involves searching for a new place to live, hours of packing and unpacking, going through everything you own, living out of boxes, physical pain, and spending money on things you need for the new place that you didn't need for the old place. In our case, it also meant getting skittish kitties used to a new environment. Why go through all of that twice if you don't have to?
8. My home is my favorite place to be. I don't really mind being house-poor for the time being because my home is my favorite place to be. It is quiet, peaceful, and decorated exactly the way I want within the confines of my budget. I haven't really missed not being able to buy what is ultimately random junk (do I really need a fourth iPod?) and I have survived not going out to eat three times a week and taking fewer trips. I may be spending a lot of money, but at least I enjoy and appreciate what I'm spending on, and the thing I am spending it on will last a lot longer than the many trivial items I might have purchased otherwise.
Closing Thoughts
Don't get me wrong--I'm not advocating stretching your budget to buy the nicest place you could hope to live in. If you don't have to go to the top of your price range to buy a house you will be content with, please don't. There's no reason to create unnecessary financial pressure in your life.
But buying a house, like most purchases, is not just a financial decision, it's also an emotional one. Sometimes it just doesn't make sense to overlook the emotional aspects of a purchasing decision, even if it means spending more money.
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