There’s always inspections, after the house is in escrow. Even a house marketed ‘as is’. I don’t think he meant inspections before putting down an offer.
You’re probably old like me, and would never buy a house without an inspection (which would be part of the offer, with the escrow returned if it turned up things that the seller needed to fix).
In the current world, if your offer has contingencies (including selling your current house), they’ll just move on to the next one.
Yes, another reason to wait it out till the market cools off. Prices may or may not go down but at least demand will eventually. In a sellers market the buyer is on the losing end of a lot of things.
I’m surprised hardly anybody has mentioned retirement.
I’m in a different boat than the OP, but struggling with how to prioritize in a similar way. A car loan at 5.5%, $125,000 in student debt at 6.5% and roughly one year of income in retirement savings at age 38 (most of which is in a Roth IRA.) We have about three months of emergency savings.
According to the internet I’m supposed to have 2-3 times our income saved for retirement by age 40 - by that metric we are behind. Yet my former financial advisor FIL says we have enough money in retirement already that we should stop prioritizing it. I don’t understand the disparity in financial advice. But he’s a multi-millionaire who retired in his 50s so maybe he knows what he’s talking about.
I hate our current cash flow issues, I hate debt on principle and yes, I’d like to buy a house in the next five years. So what I WANT to prioritize is debt, but I don’t want to lose a bunch of money by not investing, either. My husband says I need to think more like a rich person.
At any rate, supporting yourself after your retire is a big deal and should be a part of this conversation, IMO.
Sorry I missed this. Good move.
And my 2c is that car loan is obscene. I’d get rid of it sooner rather than later.
Maybe, but anyone without enough faith in the quality of their house to turn down the current highest offer because of the need of an inspection is not someone I’d want to buy from. And it might not be faith - they may know of big problems.
As I think I mentioned, I know someone who bought without an inspection and they are finding problem after problem. So you’d better have a bunch of cash on hand to fix things.
I honestly wonder if a home of even a reasonable goal for many of us. There seem to be so many hidden costs, you think you can afford something but it turns out to be an enormous burden. I live in a manufactured home we own outright. The lot rent is small. It’s 2000 square feet with a huge kitchen island, living room and master bedroom, and a garden tub. I don’t want to live in this school district when my kid starts kindergarten, but I doubt we could ever afford anything comparable in a house. Maybe a condo. But even those are smaller, no?
+1. I’ve bought five houses, the most recent one two years ago, and would never ever buy without inspections in the contingencies. The last house before this one that I almost bought had serious civil engineering-level issues found during escrow that would have cost at least $40k to fix. I walked away and the sellers had to disclose it to the next guy since that’s how these things work.
Condos vary as do condo prices. Chances are you could find one as big as (or bigger than) your home with similar amenities. But it may be more expensive, especially when you factor in HOAs.
Maybe he’s saying that his daughter is going to inherit or be gifted enough that you don’t need to worry about retirement savings? Although you should continue to save, just in case you’re not with his daughter when you are ready to retire.
His son. And yes, he did say that. FIL said his mother intended to skip his generation in the inheritance and that we will probably retire before he did.
But my husband’s response to that was, “You know who else he told not to worry about retirement?”
(My husband’s mother, who was left not very well off after the divorce.)
We just can’t rely on it, you know? My husband could die tomorrow. He could be disowned for something petty. Anything can happen. And I don’t come from rich people. I guess one of the effects of that is that you never trust anything that isn’t already in your hands. I want us to do the best we can with what we have, no matter what.
These two pieces of advice are by far the most sound and I concur with @phxjcc’s advice.
As for buying a house… unless you just HAVE to do it now, you might consider waiting. The house market is very heated in many parts of the country at the moment. You might well be better off putting spare money toward a down-payment fund and waiting for prices to drop eventually.
That’s likely a generation skipping trust or something like that in order to avoid the taxes that happen when your stuff goes to your kids.,
I don’t know if you’ve seen this sketch, but people who are in the housing market say it feels accurate:
To be clear, I’m not saying the OP should buy a house without an inspection. I’m just saying that the seller doesn’t need to put up with the hassle and uncertainty of an inspection clause in the contract - they’ll get offers without them. Nothing necessarily to do with their faith in the quality of their house.
To endorse what others are saying, in the current market any offer contingency (inspection, mortgage) is a strike against. If you’re looking at two offers, each 6 figures above asking price, an inspection is a complication not worth dealing with. People are buying houses sight unseen, with no inspection, for cash. It’s tough out there.
Lancia,
please can you reassure us you are going to pay off your credit card?!
It’s just sad to hand over money in interest every month to a company, when you could actually use it yourself…
The OP has $70k or so in cash on hand, saved. He’s demonstrated that they are good at living frugally and saving. I think people are looking at that stupid car rate and deciding he needs lessons in basic impulse control. That’s clearly not the case. This is a person who was very poor and frugal for a long time, and finally has a decent income and wants to know how to be middle class and frugal. A totally different situation from someone who has always had a decent income but was never frugal.
So.
I paid off the credit card and the car note last night. ~$21,500 out the door in the span of 10 minutes. It feels kind of weird having spent that much money, and unreal that I no longer have those debts.
Now then.
First, I deeply appreciate all the responses. I’m not well versed in financial minutiae so I’ve been reading along with relish. Thank you all for your input and time.
The consensus is clearly to wait to buy a home. We will almost certainly take that advice. However, I do want to address something that was mentioned a couple of times, specifically the cost of home ownership.
While we are currently tenants we are renting a single-family home, not an apartment. We are responsible for all utilities as well as yard, lawn, and driveway maintenance. The landlord is responsible for repairs to the structure obviously. However, I think that the oft-repeated adage that a homeowner should expect to spend 1% of their home’s value each year on maintenance and repairs to be fairly accurate – at least, that’s what current homeowning friends and family I’ve spoken with say (this assumes a single-family home without HOA or condo fees).
Budgeting for taxes and insurance is easy. Clearly those numbers will be different depending on the home but planning for them isn’t hard – it’s just math. We will work out a budget before we even sit down with a mortgage lender so we will have a solid idea of what we can afford: mortgage, taxes, insurance, utilities, repairs & upkeep.
We have no plans to leave our home after we buy: this is not a “starter home” or similar. We’ve lived in apartments and houses, we know exactly what we want in a home and what we do not want. We know what town and what neighborhoods we’d prefer. When we buy we’d like to find a house that will suit our needs for as long as we’re able to physically stay in our home. When we leave ideally it will be to a nursing home or a grave. I’ve never understood the panic people feel when they are underwater on a mortgage. It’s only an issue if the plan is to sell the house soon. One reason we have strived to have a significant down payment is the fact that we would like to have some equity right out of the gate.
While this will be our first home purchase, we’re not entering this completely blind. We know what we want, understand the cost of homeownership (to reiterate, whenever we do buy we plan on a comprehensive inspection including separate / additional foundation, electrical and roof inspections if the general inspection doesn’t cover those in depth), and know how to budget. What we are both unfamiliar with is the home buying process: getting from point A to point Z, as it were.
A couple of posters noted the importance of setting up a retirement account. This is something we plan on doing, and soon. Vanguard Roth IRA’s come highly recommended.
Yes, this. We were paupers for so long it’s kind of in our DNA at this point. Example: my wife and son were going through the pantry yesterday making an inventory. They found a handful of Taco Bell hot sauce packets from likely many months ago, or maybe even years ago. Ancient and unwanted. Lord knows we have the money to buy a bottle of hot sauce should the desire arise, but throwing those away felt incredibly wasteful. We’ve never had much discretionary income and we’re at a point now – yes, better late than never – where we need to make some long-lasting financial decisions.
I do know what our credit score is and what’s on our report. While neither is heroic a big part of that is the fact that we didn’t really have credit until I had to buy a car. One of our goals from this point forward is to continue to build our credit so that when we do buy a home hopefully we will be in a better position to do so than we are today.
When my wife and I bought our first house, Microsft Excel was kind of my crack cocaine <grin>.
My spreadsheet for the economics of each house we evaluated included me setting aside monthly reserves for replacement for the major components of the house based on how long each was expected to last (and, in ‘used’ homes, how old each part was).
It may be worth having some sense of how long things are generally expected to last, and then try to budget for their replacements (cost and labor).
Is it overkill ? Just plain nuts ? I’ll leave it to each to decide for themselves 
Ahem.
WOO-HOO !!!