House situation

Discussion in 'Real Estate' started by mtowncyclone13, Jan 9, 2017.

  1. mtowncyclone13

    mtowncyclone13 Well-Known Member

    Oct 10, 2012
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    Hey guys (and CG!), I have a dilemma and I seek your sage advice.

    The facts - My wife and I bought a house for 175k last fall. Since then we've put about 15k into to for things like radon system, new water heater, new entryway tiles, and paint. When we bought the house it was great for what we wanted - nice split level layout, 4 bedroom, room for band practice, 1/3 acre, and a huge garage. After our 20% down payment our monthly costs are about $1,100 which is more than manageable.

    Now the bad stuff - we have two bedrooms upstairs and two down in the basement. My wife wants another baby but doesn't want our current son in the basement all alone when he gets old enough. In addition, our heating is electric which makes the basement very, very cold in the winter as the system cannot heat above about 69 degree. This means the basement is like a meat locker when we go down there or even walk by the open entryway. If we put a child down there he will freeze because the temp is about 57 degrees according to my room-by-room thermostats. And yes, we've tried every trick with vent system and space heaters.

    So the question - There is a great 3,000 SF ranch (walkout basement also finished) being built down the street with an asking price of 281k. We could pick out all the finishes. 20% down would be 56k which would bring our mortgage to about $1,100/month + ins and tax and $1,700/month after tax abatement ends. This is a huge difference in monthly payments but something we can still afford.

    To fix our current heating problem we would need to run natural gas into the utility room and buy a new furnace. This would cost about 8-10k. In addition, we have one bathroom that is halfway built (long story) but it would cost about 4-5k to do it right or 2-3k to do it quick.

    At what point do you sell the house, take the 6% commission loss, take the 15k of improvement loss, and buy the new house that has a better layout and better HVAC system or do you make a go of it in the current house. All of the work we would do would be paid in cash so there wouldn't be financing - but a new furnace doesn't solve the 3rd-bedroom-in-the-basement issue nor does the installer guarantee it will fix the drastic difference in temperatures.

    I could be talked into both options: staying and making it work or taking a hit and moving. What would you guys do?
     
  2. Rabbuk

    Rabbuk Well-Known Member

    Mar 1, 2011
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    300k seems like a lot for a ranch in mtown. Though at 3000 SF it must be quite a ranch.
     
  3. CyArob

    CyArob Well-Known Member

    Apr 22, 2011
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    Freezing your kid will make them tougher and help build character
     
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  4. cowgirl836

    cowgirl836 Well-Known Member

    Sep 3, 2009
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    if it's got a finished basement, that will do it. Most of the ranches we looked at with finished basements hit the 3-3500sq ft range.
     
  5. 3TrueFans

    3TrueFans Well-Known Member

    Sep 10, 2009
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    Heat is earned, not given.
     
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  6. AgronAlum

    AgronAlum Well-Known Member

    Jul 12, 2014
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    From a resale standpoint, if you ever decide to leave, I would be a little nervous about spending 281k on a house in town in Marshalltown. I've looked into the houses you're probably looking at and they can be had for a more reasonable price (230-240 for 3000-3500 sq feet) on both the SW and SE side of town. Also, look at the covenants for purchasing the house. It's basically an HOA without the HOA dues. There are a lot of rules on what you can do with your own lot.

    I'd say find a middle ground in the low to mid 200's. There were plenty of really nice options in that price range out there when we were looking last summer. Ultimately, we decided to build elsewhere and commute. Make sure you want that many sq feet as well. That's a whole lot of house for 4 people.
     
  7. 3TrueFans

    3TrueFans Well-Known Member

    Sep 10, 2009
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    This is like a real life episode of Love It or List It! Personally I'd move but not necessarily into the other house, just because split levels are balls. Could you find something that's not new construction for a bit cheaper?
     
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  8. ruxCYtable

    ruxCYtable Well-Known Member

    Aug 29, 2007
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    Tough call. If it were me, I've already invested quite a bit in the current house, so I'd continue that by putting in the gas furnace and stay there a while.
     
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  9. cowgirl836

    cowgirl836 Well-Known Member

    Sep 3, 2009
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    depends how often you run across a house for sale that fits what you are looking for. You could potentially stay put and room the kids together for a few years. I wouldn't want a young child in a basement by themselves either.

    My view:

    If the new place is comfortably affordable and houses like that are rare in your market, I'd seriously look at moving. And I'd start by seeing the current place may go for with the improvements you've made so far.

    If you aren't in a rush, I'd stay put, room the kids together for a couple years, not put money into the heating situation, and wait for something else to hit the market. I'm not overly familiar with the Marshalltown real estate market but I would agree that pushing 300k seems a touch high for that area.
     
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  10. throwittoblythe

    throwittoblythe Active Member

    Aug 7, 2006
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    It sounds like you guys have done your research so I won't comment on the $ part of it. If that wasn't a factor, you're really deciding between living in a construction site for a few months, or the pain of selling/buying/moving. For me, I'd pick the construction option (provided you like the house enough to stay there long term and make it worth the $).

    Full disclosure: I just moved twice in less than a year and did not enjoy it, so my views are biased.
     
  11. heyguy85

    heyguy85 Well-Known Member

    Nov 9, 2007
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    I'd move and stop putting money into the current house.
     
  12. Rabbuk

    Rabbuk Well-Known Member

    Mar 1, 2011
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    I thought the average ranch house was about half that size. But I don't know much about real estate and don't know anything about new construction.
     
  13. cyclonespiker33

    cyclonespiker33 Well-Known Member

    Jan 19, 2011
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    As someone who lived in a cold basement for about 5 years, my advise is to get a space heater.
     
  14. cowgirl836

    cowgirl836 Well-Known Member

    Sep 3, 2009
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    not sure on what the avg would be, but I'm guessing that new construction ranches are....similar. Main floor in the ones we looked at tended to be 1800-2200sq ft, and then basements added another 1000-1300.
     
  15. IAMAIRBHG

    IAMAIRBHG Well-Known Member

    Aug 21, 2012
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    What is the role of thump for amount spent on house??

    say a family income is 120k/year (no kids)
     
  16. cowgirl836

    cowgirl836 Well-Known Member

    Sep 3, 2009
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    I've commonly read 2.5-3x salary. Probably a bit higher if you have little/no debt and a large down payment.
     
  17. CycloneSarah

    CycloneSarah Member

    Aug 9, 2016
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    Could you move the master to the basement so the kids get the upstairs rooms? I saw several split levels like that when I was house-hunting last year.
     
  18. cycloneML

    cycloneML Well-Known Member

    Mar 5, 2008
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    Is that your wife in your avatar? If so, I will buy your house
     
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  19. DandyCyclone

    DandyCyclone Well-Known Member

    Oct 11, 2012
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    You're in quite the pickle. How are you going to get rid of your current house with the heating situation it is in? Will you hope the new buyer doesn't catch on and make them take the wrong end of the deal or will you make everyone aware and likely hurt your resale? Either way you need to take care of the house you're currently in before you make a long term decision.
     
  20. JY07

    JY07 Well-Known Member

    Aug 20, 2009
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    If you have an electric furnace I'm guessing you also have a heat pump opposed to a standard A/C?

    Based on what you're saying it seems like the heat pump is running opposed to the furnace. There's no reason the electric furnace shouldn't be pumping out hotter air; I'd just get a new one opposed to running a gas line.

    As for building: it's not going to end up at $281k by the time you've picked everything out
     

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