“Harmless” Window Shopping

Love at First Sight

Last Friday night, Johnny, Sally, and I ate at a barbecue place near our home. Sadly, it didn’t even begin to live up to my (and now Johnny’s) expectations of good barbecue. My Southern roots have spoiled us both. Afterward, we decided to take a drive around a new neighborhood development, “just for fun.” In driving, we stumbled across a different neighborhood — the neighborhood of our dreams. The lots were huge, the yards were private, and the views were incredible. It was love at first sight.

On Sunday evening, we decided to go look at the neighborhood again, “just for fun.” Our love grew deeper. So on Monday, once again “just for fun,” we decided to call and enquire about the empty lots. Sure, we’re not ready to buy a home yet, but maybe we could buy one of these perfect lots now and then build a home in a year or two. The real estate agent told us that the lots alone weren’t for sale — you had to build a house, too. She then offered to meet us over at the neighborhood to give us more information. What’s the harm in that? we told ourselves and agreed to meet the agent. Johnny and I met with the agent, going over the available lots and the different home plans we could choose from. We both knew the homes we were looking at were almost $100k more than what we intend to spend on our first home. But we found ourselves rationalizing this blaring fact.

Lots this size are hard to come by!

For the location and lot size, it would actually be a really good deal!

It’s more than we’d like to spend, but it would be our dream home!!

These lots aren’t going to be available long. If we don’t act now, we’ll never be able to live here!

A few hours after meeting with the real estate agent, our heads cleared a little bit. “Wait,” one of us said. “We aren’t even looking to buy a home! How are we even considering this?” “Yeah… but it would be everything we’ve ever wanted!” (might have been me… my memory’s fuzzy…)

Eventually, we both realized that while we could technically “afford” one of those homes, we wouldn’t feel comfortable spending that kind of money. We’d have a ginormous yard, but we’d also have a big mortgage and, frankly, a home mostly empty of furniture. And then we’d feel the need to buy a bunch of furniture to fill our much too large house. And we could very well find ourselves struggling to save anything each month. So we accepted our dream as just that — a dream.

“It kind of sucks knowing we’ve worked so hard for so long, and we still can’t afford a house.” I said, dejectedly. I am just a barrel of fun, folks 😉 Johnny is the voice of reason in these moments. “Jo, don’t you get it? We are ready to buy a house. We’re just not ready to buy those homes. There are plenty of homes in our price range, and maybe this is what we needed to get started looking for real.”

So after Monday night, I realized two things: we might not buy a house soon, but we might be ready to start looking for real now. And when we do start looking, we’ve gotta make sure we stick to our budgeting guns and get the house we can afford, not the house of our dreamiest of dreams. And who knows, maybe we’ll be able to find both.

Can you relate to our experience? Have you ever been tempted to overspend just because it’s your dream home/car/dress/shoes/dog/LEGO set? You catch my drift.

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  • Reply Brian June 5, 2014 at 7:51 am

    We are in the process of scouting some new land to build on in the future. We have run into the same problem you did. You can’t always just buy the land. When we do find places that allow you to just buy the land, we do some research and find that the kind of house we want to build wouldn’t even be allowed on these plots (I’m all about building a shipping container house).

    Some day things may line up for us, but until then, we will just keep living in our 1957 paid off house.

    • Reply Joanna June 5, 2014 at 10:19 pm

      Hope you’re able to find the perfect plot of land before long. When you do, I’ve gotta see pics of the shipping container house you build!

  • Reply Rachel June 5, 2014 at 8:03 am

    Sticking to your budgeting guns when buying a house is really hard. I remember being very disheartened during my search as I had to keep moving my search area further and further out from the centre of the town where I live, in order to find the type of house I wanted for a price I was prepared to pay.
    I had a list of what I needed and was looking for in a house, and searched for months online to narrow down the area where I could find houses that ticked all the boxes for me. In the end I only went to one day of ‘open for inspections’ and looked at 3 houses, and I ended up buying the second one I looked at on the day.
    I ended up spending just a little more than I wanted, but it was a significant amount less than what the seller wanted – hint, buying a house that’s been on the market for a while and the seller has already dropped the price. In my case it also helped that the sellers had already bought elsewhere and moved, and just happened to have had a baby about 3 days before I made my offer. They were so over the whole ‘selling a house’ thing and just wanted the house gone that they pretty much accepted the first offer I made.
    It’s all about strategy 🙂

    • Reply Joanna June 5, 2014 at 10:21 pm

      That’s awesome Rachel! It sounds like things worked out perfectly for your home-buying experience. Note to self: Find sellers who have just had a baby! 😉

  • Reply Courtney June 5, 2014 at 9:19 am

    Awesome post! I just purchased my first home in November, and it was such a temptation to look at houses listed well above what I was comfortable spending (it didn’t help that the bank pre approved a mortgage that would have put me into the Ramen Noodle poor house for the next 20 years :))

    I stuck to my guns, bought a fixer-upper that was way below my max spending limit and I am SO happy that I did! I feel like I have really set myself up for success in the future.

    • Reply Joanna June 5, 2014 at 10:22 pm

      Way to go, Courtney! Having that peace of mind is so worth it. You made the right choice!

  • Reply Becky @ RunFunDone June 5, 2014 at 9:21 am

    Oh dang! House shopping is frustrating! We ended up raising our budget and buying a house that cost more than what we originally wanted to spend. Sometimes I wonder if we could’ve stuck to our original budget if we had waited around a little longer, but we were living next to a burglar, so I just wanted OUT of that neighborhood! Within 3 months of moving, 3 more houses on our old block were robbed. Maybe the extra money was worth it!

    • Reply Joanna June 5, 2014 at 10:23 pm

      In your case, it sounds like it was the right decision to buy sooner rather than later. Glad you didn’t get robbed!!

  • Reply Cate M. June 5, 2014 at 9:30 am

    My husband and I actually made an offer on a house that we couldn’t afford…
    We told our agent the price range that we wanted to look in and she said to look 20k-30k higher because you can negotiate( looking back, not many home sellers are willing to drop the price that much). Well, we found the PERFECT house in the higher range and we figured “hey, she has done this a TON of times, she knows what she is doing!”
    We made an offer and they countered (luckily) and when we saw the numbers that the bank had run for our mortgage and escrow…we about fell over. We immediately told her that it just was too much money and even though we were approved to buy that much does not mean that we can afford that much. From that point on we had to look within our “real range”. It was really hard to look at home that were a lot smaller and less “perfect” than the first home but we knew we didn’t want to be house poor and we also know that we will have the opportunity to buy another house, hopefully build, someday.
    Only you know your finances so stick to your guns!

    • Reply Joanna June 16, 2014 at 10:20 am

      Wow, I loved reading about your experience, Cate! You guys definitely made the right choice. No dream home is worth feeling financially burdened. Thanks for sharing!

  • Reply Little House June 5, 2014 at 9:36 am

    I can easily fall into rationalizing buying a more expensive home. Of course, where I live, starter homes begin in the low $400’sK, but that’s another story. I started looking around last weekend for something under $400K and found some small-ish homes in OK neighborhoods. Sure, they aren’t my dream home or the area I want to live in, but I started to think that maybe we could buy a home sooner than originally planned. Then reason sunk in and I realized that if we wait another 18 months or so, prices might dip down a bit. I have to stick to our original plan! It’s just so easy to get caught up in the moment.

    • Reply Joanna June 16, 2014 at 10:21 am

      Agreed! Here’s to us both sticking to our plan!!

  • Reply Rachel June 5, 2014 at 9:39 am

    We over spent on our house by around £50k 3 years ago and I haven’t regretted it for a moment. We went to hypothetically check out a new development and were really interested in one style of house, it was on our price range and if we did x, y and z it would be perfect! When we talked to the agent it turned out that style was all sold out so we tentitively looked at the next one up. As soon as we walked through that house I knew it was the one, I had been drawing that floor plan my entire life. It’s on a large, but managable plot, a double garage and loft that could potentially be converted in the future but a great size for us now. We decided that as it would be a forever house by jumping to the top of our ladder instead of steping rung by rung we would save on tax, agents fees and moving costs. Fortunately we were still able to put down a 40% deposit and get a great deal. We’re also over paying our monthly mortgage payments with the aim of being mortgage free on our dream house by mid 40s. It might not happen like that but for the right house in the right place it was definitely the right decision.

    • Reply Joanna June 16, 2014 at 10:26 am

      Glad to hear it! It sounds like your decision was still well within your financial capacity. A 40% deposit is a huge accomplishment. Well done!! Enjoy your dream house… you deserve it!

  • Reply Jenni June 5, 2014 at 10:00 am

    Yes! When my husband and I started looking, I was a little depressed seeing the size and state of the homes we could afford in our location.

    Then my husband had a job interview in SC and I went house shopping while he was in interviews all day. The homes there were gorgeous! And we could afford a turn-key mansion! I wanted to move there solely for the 3 acre lots and 5 bedroom completely done homes for less than 400k.

    We decided the job and location weren’t for us, so we ended up buying a BIG fixer in our area. It’s a lot more expensive here in CA, but on the bright side, if we decide to move anywhere else we can afford a lot bigger house. And we’ll learn how to take care and fix a home. Anything we do to this one will increase it’s value…

    • Reply Joanna June 16, 2014 at 10:29 am

      It’s so true… you can get so much house for a reasonable price in the South. It’s kind of jaw-dropping compared to other areas of the country.

      Johnny and I like the idea of buying a fixer upper, if the right one came along. You can make it your own, which will mean a lot!

  • Reply Megyn June 5, 2014 at 10:45 am

    This is a tough one we’re facing right now. The Austin market is extremely competitive, and for those of us in the low ranges, there just isn’t the inventory plus many cash buyers. We actually put in two offers on dream homes in our price range, but the seller of the first decided to no longer sell and the seller of the second was goaded into taking a lower cash offer. I’m trying to remember that we can take our time, but it’s hard to not just want it all done and over with, even if that means spending a bit more. The biggest issue we have with spending more is that property taxes are INSANE here (2.5+%)…so even though it might be tight, but doable now, it will likely only go up for the foreseeable future.

    • Reply Joanna June 16, 2014 at 10:32 am

      How frustrating! I’d be tempted to want to rush the process so I could be done, too. Just keep taking it slow, and a place will com along just perfect for you!

  • Reply Newlyweds on a Budget June 5, 2014 at 1:23 pm

    this JUST happened to us a few weeks ago. We saw a house on the MLS that fit all of our criteria within our budget. We went to look at it, fell in love and decided to put in an offer. And then I started to get cold feet, because we’d be dumping ALL our savings into the down payment, leaving us with nothing. It was SUCH an uncomfortable feeling that after a day we finally decided NOT to go through with the offer. It was a relief…but it was also really hard to let go of the dream…

    • Reply Joanna June 16, 2014 at 10:34 am

      Totally. As much as it was amazing to dream of living in one of the homes we looked at, it would have been miserable to put us in a situation of being strapped financially. Good to hear other couples like you guys considering the same thing and pushing forward!

  • Reply Debt Busting Chick June 5, 2014 at 1:36 pm

    I totally overspent on my car and now I’m in debt because of it. It’s got me working overtime to pay it off. I currently don’t have any back up funds because I want to clear all my debts first and that’s scares me because if an emergency arises I’m stuck!

    • Reply Joanna June 16, 2014 at 10:35 am

      I hope you’re able to get them paid off quickly! In the meantime, a small emergency fund ($1000) might be a good option!

  • Reply Wade June 5, 2014 at 2:18 pm

    One of my favorite sayings is “Almost doing something is usually better than doing it…”

    I applaud you guys delaying your decision knowing that you aren’t ready. Saving 20% down to avoid PMI. Researching all the hidden costs of home ownership. Getting rid of your other debt. These things will let you enjoy your first home. If you skip some of the steps you won’t enjoy your first place as much and it will be a cement block chained to your proverbial ankles.

    Play the “I’ve always wanted to have a new ______________________” game. Buy it in your head, use it, fast forward 6 months or a year. Is it still “cool”?

    I’ve done this multiple times with many objects. I’m learning to recognize the ones that will end up just being luxury items you could have avoided. I had a $400 bike. I bought a $2,000 bike. I always wanted one. In the end, the $400 bike did the same thing. I was less worried about it getting stolen or scratched. I sold it, bought some index mutual funds with the extra $1,600 and went back to a $400 bike. It was a “life” experience. Lesson learned.

    Plan the work, work the plan.

    • Reply Joanna June 16, 2014 at 4:10 pm

      Thanks, Wade! And I absolutely love your story about the bike. It’s so easy to get caught up thinking that we need the very best. And love what you did with the extra money! Awesome.

  • Reply Tarynkay June 5, 2014 at 2:48 pm

    We bought our house in 2009. So this was after the market crashed, after the whole sub-prime mortgage debacle. I had just gotten a job after a year of unemployment, my husband had worked in his job for one year. We thought it would be hard to get approved for a loan. To our surprise, the bank approved us for a mortgage of up to $350K. The mortgage payments would have been my entire take home salary!

    We could have bought a lot of house for $350K in our area, and we knew we would be tempted- so we didn’t even look at those. Our goal was to be able to live entirely within my husband’s salary and save 100% of mine and we knew we couldn’t do that if my whole paycheck was going for the mortgage.

    We thankfully had a great realtor and she was really good at only showing us houses within our budget. I have heard people say that realtors like to show people houses juuuust outside of the budget and then of course those are so much nicer and people decide to stretch the budget…. We ended up buying a house for $125K. It’s a great house and every time I clean the floors, I am thankful it is not any bigger.

    • Reply Joanna June 16, 2014 at 4:17 pm

      Awesome, Tarynkay. Way to stick to your budget. And agreed…. too much house, and I’d be cleaning all the time. I can barely manage our little condo as it is!

  • Reply EcoCatLady June 5, 2014 at 3:20 pm

    Well, speaking as the owner of a home on a ginormous lot, let me just say that I think you dodged the bullet on this one. Don’t get me wrong, there is much to love about having space for endless gardening, but it also means endless watering, and weeding, and mowing, yadda, yadda, yadda! I love my house, but if I had it to do over again, I’d look for a bigger kitchen and a smaller yard! Now, if you’ll excuse me, I’m off to do battle with the untamed prairie that seems to have taken over in the past week or so…

    P.S. What happened to Levar Burton? Did you decide Geordi was OK after all?

    • Reply Rachel June 6, 2014 at 2:30 am

      I hear you… on my list of requirements when I bought my place was ‘not needing to own a lawn mower’. I had looked at my life, realised I didn’t want to spend my precious weekends mowing or gardening (the green-thumb skipped me in my family) and decided that a town house was the way to go… completely paved back yard (courtyard) and body corporate are responsible for the front lawn and garden as it’s technically community property. 🙂

    • Reply Joanna June 16, 2014 at 4:21 pm

      You guys crack me up! Johnny swears he will do all the yard work if we have a big yard, so as long as that promise is in place, I’m gonna go for it.

  • Reply Chadnudj June 5, 2014 at 4:21 pm

    As anti-frugal as it may seem, I think the one thing I have ALWAYS be tempted to overspend on (and frequently have overspent on) might be where I live. Could I have lived in cheaper/smaller places? Yes….but I don’t travel a lot, don’t buy a lot of gadgets/clothes/gimmicks, don’t eat out an inordinate amount, and really enjoy my home and entertaining in my home.

    This will always be a struggle for me, but if my one are of overspending is in my home, I think I can live with that….hopefully.

    • Reply Joanna June 16, 2014 at 4:25 pm

      All power to ya! I think as long as you pick and choose where you splurge, splurging is a-okay sometimes. It sounds like you’re happy with your decision, so it’s probably the right one!

  • Reply Rob June 5, 2014 at 6:36 pm

    Hi guys!

    Yes, I can relate to your experience – not in our own case but in what has been happening here in Canada in the real estate market over the last number years. For a long time now Canadian mortgage rates have been under 3%, such that mortgage lending has been rampant, all leading to a giant housing bubble, building larger each day. And you thought your American 2008 sub-prime mortgage fiasco was bad!

    I don’t usually refer to other blogs in my comments but the #1 Canadian PF blog (as voted by the blogging community over the past 2 years) refers to people who over extend themselves in their desire to buy a house, grossly exceeding their budget, as “house horny virgins”. This blogger’s #1 rule: do not commit all your money (and debt) into only one asset, especially with the eventual expectation that interest rates will surely rise. Once that happens there will be blood in the streets as many will financially go under as housing values will then abruptly decline. By that point the mortgage lenders won’t be renewing existing mortgages unless the house owners pony up the huge differences, all the while experiencing no supporting income increases. The fear is that many then will lose their houses (shades of 2008).

    That all said, don’t get discouraged but keep a level head on housing wants vs needs, buying that first “starter” house well within your means, building up equity over time with house improvements until you can then gradually trade up to something closer to your “dream house”. That’s what we did, buying and selling houses, gradually increasing in value as we acquired equity, eventually allowing us to full pay off our mortgage well before retirement.

    • Reply Joanna June 16, 2014 at 4:27 pm

      Great advice, Rob! And I didn’t realize that’s what was happening with the housing market in Canada right now. Not good!! I just hope we learned our lesson over here in the US, and we don’t have another 2008 anytime soon!

  • Reply Nic June 6, 2014 at 1:34 am

    I live in a very expensive city. In order to afford to buy a home in this area, I’d need to make (minimum) 6 times the money than I make now. Yeah. Not kidding.

    I used to get depressed about it, because I’ve been responsible with money and have been a saver for most of my life. A few years back, I made my peace with it. I decided that I could beat myself up about things that are way out of my control or I could accept that home ownership isn’t in the cards. Now I’m putting my money towards retirement and enjoying life.

    • Reply Joanna June 16, 2014 at 4:30 pm

      Way to go, Nic! A home doesn’t buy happiness. And more and more I’m seeing that it’s what you do with the money you make, not just what you make, that matters. Keep on keepin’ on! You’re on the right path.

  • Reply k@Masters Of Our Own Dollars June 6, 2014 at 12:04 pm

    I’m totally tempted to go over my budget. After all, I’m looking for my “forever” home, I shouldn’t settle too much, right? And look, my house is selling for a lot more than I thought it would giving me an even larger down payment! And every mortgage calculator online says I can afford $350k!

    But I’ve done the math, a $280k mortgage would be too much of a stretch, I’m already nervous about taking on a larger mortgage (I can totally afford it, just get nervous about change), and the extra I’m getting from the house can go towards student loans, investments, etc. If I do get rich in a few years and think it’d be worth it I could always move again.

    • Reply Joanna June 16, 2014 at 4:32 pm

      Stick to your guns, K! 🙂

  • Reply Halsy June 6, 2014 at 1:56 pm

    A similar thing happened to us when we recently bought our home…but we gave in. We started looking at houses back in October. Just browsing because we knew our house wouldn’t be ready to sell until after the first of the year. We started seriously looking in January and narrowed it down to 2 suburbs by the time our house went on market near end of January. However, we couldn’t find a single house in our predetermined price range we liked. We had been approved for more but didn’t want to “stretch it”. We finally found a house near the neighborhood we lived in. Our house sold in 3 days for full asking price. We were shocked! We put an offer in on the house feeling the pressure to not be homeless. Well after inspection we backed out. We had the search max out at what we were approved for. We saw a house pop up but it was at our max out price. We both liked it a lot and loved the neighborhood but we decided it was too much and we would keep looking. Then five days after it went on market they dropped price almost
    $10,000. We decided to go look…and we decided we wanted it if they would come down $5000 more. Well they did and were already moved out and we closed on the house in 3 weeks (almost unheard of) and were not homeless:) Yes, we “overspent” but we still had the funds to do the 15% we predecided for down payment and the mortgage was only about $100 more per month than the other house we had went in contract on. We decided it was well worth it and haven’t regretted it yet! Sometimes I think it’s ok to “overspend” as long as you are not overextended and the money is still there in the budget somewhere. I think a house is one of those times if you plan to be there long term. We plan to raise our 2 children here so atleast the next 18-25 years.

    • Reply Joanna June 16, 2014 at 4:35 pm

      That’s great, Halsy! There’s a big difference between people overspending on the budget they initially allotted and actually overextending their finances. It sounds like you guys overspent, but it was well within your budget still. And since you know you’re going to be settled for a while, I think it was the right choice!

  • Reply Slinky June 13, 2014 at 7:14 pm

    Good for you guys sticking to your guns! It’s hard, especially for stuff like a house where emotions are likely to come into play. It sounds like this was too expensive and too big of a house, so not quite right really. Play Goldilocks and wait for the one that’s just right. 🙂 Who knows, you could buy a starter house soon and then end up trading into one of these down the road.

    • Reply Joanna June 16, 2014 at 4:37 pm

      Totally. It’s so hard not to get emotionally attached to houses. You imagine your children running around on the hardwoods, etc. I think this experience reinforced our determination to wait for the right place!

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