Sunday, July 31, 2011

Getting Caught Up in the Frenzy - Budget Increase Round Two

It's starting to look like I need a budget of $300k to $330k for a "move-in ready" 2br/2ba condo in my area. At this price range, I've estimated that my housing cost will be around $1,914 - $2000/month = mortgage (P&I only) $1,274 + associations fees around $300 + property tax $340 + insurance $10. (The reason why my "insurance cost" budget is $10 is because I'm only taking into account the increased premium from a condo-owner's policy vs. my current renter's insurance policy.)

I'm currently paying $1,175/month in rent, so this is a jump of $739-$825/month in my cost of living. Of course, I'm currently only renting a 1 br/1 ba apartment, so it's not really an apples-to-apples comparison. If I were to rent a 2 br/2 ba apartment at my complex, I would be paying approx. $1,600 - $1,700 month. So I concluded that buying makes sense, even with the significantly increased cost of living.

With this conclusion, I made two offers:
1.) $300,000 back-up offer on a townhome for which the seller had already accepted a $300k cash offer from someone else. The buyer, however, has a date certain that they need to move-in. With the townhome being sold as a short-sale, the property may not close in time for the buyer. In the event the buyer drops out, my back-up offer will be considered.

2.) $329,000 on a short-sale townhome. The seller countered yesterday with minor concessions, which I accepted. The seller is entertaining multiple offers so I'm not sure whether I'll "win" the bid yet.

I have mixed feelings about this process. On the one hand, I hope I can buy the $329k property. On the other hand, the thought of the increased cost of living is giving me heartburn.


Money Beagle said...

She lives! Good luck with the purchase and all that. Short sales are definitely a major PITA so be prepared for some headaches if you go that route. The prices of real estate in California continue to astound me.

Our house is a few hundred feet away from a freeway. That's about as close as I can handle, so I agree that having the window directly facing it is a big turn-off!

Jin6655321 said...

Good luck!

We went for a short sale as well and it wasn't as bad as everyone said it would be. The worst part was the wait. It gives you A LOT of time to think and second guess your decision but of course it's too late to back out and you're half hoping the seller's bank approves and half hoping they don't.

I hope your go smoothly; good luck!