We can’t afford our house.
Perhaps on paper we can, but even then, just barely. We bought this house just nine short months ago, with less than a 20% downpayment and it should have been obvious to us then, with a new baby on the way, that we were biting off more than we could comfortably chew.
But correcting the mistake of buying a house is not an easy one. If we were to walk away now, we would likely have to bring money to the table at closing. But not walking away means a giant chunk of our budget is non-negotiable and we are barely making ends meet, much less paying off debt.
Which is an interesting position to place yourself in when what you really want to do is stay home. This house is standing in the way of our life.
Our Own Stupidity
We made a lot of missteps buying a house when we moved here about two years ago:
- First, we shouldn’t have bought a house here until we were sure we wanted to stay for at least three more years. I won’t go into the reasons here, but we have industry-related issues that could force a move as early as next year.
- We ended up buying a house 30 minutes from work, church, pediatrician, and gymnastics class (the class is funded by grandparents, so don’t roll your eyes at me). We couldn’t afford any houses closer – a giant red flag about the general cost of living here. So instead we traded a too-expensive mortgage for a manageable mortgage, plus extra gas and vehicle maintenance. I’m thinking we didn’t come out ahead.
- We were keeping up with the Joneses. We moved everything from our stuffed 2700 sq ft house in Texas and put it in a 1700 sq ft town home when we got here. We were tripping over each other, furniture, and dogs. We did not sell anything. Nope. Not one thing. We needed it all for a future house.
What Would Dave Do?
After our recent budgeting exercise had us so tight on vehicle maintenance, medical care, and groceries, I got nervous. I found a forum of Dave Ramsey believers and submitted my budget for review. You know what they said? They told me we needed to make more money.
Seems kinda crazy telling people whose combined income is well over six figures, but these folks couldn’t find too many areas to shave, considering we write four-figure student loan payments each month.
Due to the nature of our professions, we don’t have other viable employers in this area. If we want to make more money, that means we have to move or take on second jobs. We work 40 hours a week minimum, so with a long commute and small children, second jobs are hard to fit in.
Two Steps Forward and One Step Back
Let’s say a new job opportunity presented itself to my husband. And let’s say it didn’t pay relocation, but the salary offered was good enough to entice us to move. We’d lose money on the sale of the house. We’d lose money moving. But isn’t it still the right call?
I think the answer is yes.
We are not ready to sell the house today, but I thought undoing our mistake might still be the best call. And then we could be prepared to quickly move if we needed to or wanted to. And what if we sold our house now for a fair price? We’d end up renting where we started out, which was across the street from our daycare and 5 minutes from work. Time is money. And location is money, especially with rising gas prices.
With that plan in mind, my husband and I decided to list our house on Zillow.com as a “Make Me Move”. “Make me move” is a premarket listing on Zillow, which some owners use it to see if their listing price is fair and some are using it to post a house that might need a few things before being placed on the actual market. The process is simple – it only took me about 15 minutes to do a thorough listing.
With the house (sort of) listed, we have a few things to start tackling. We want to be prepared for moving back into a 1700 sq ft place with an extra body (after all, we’ve had a baby since leaving the townhomes).
- We need to downsize. We have two couches, for example. And two washers and dryers. Craigslist, get ready!!!
- We need to minimize. We have too. Much. Stuff. My daughter has a playroom filled to the brim with toys. I have clothes in three closets (to be fair, one closet is maternity clothes, which I am still in, and the others contain various sizes I hope to one day be. Again.) I think I have something like 6 cake pans, which is a lot for someone who rarely makes a cake. Yard sale and consignment shops, here we come!
Anything we net from Craiglist and the yard sale will be set aside to help us bridge the gap at closing. If we get lucky and don’t have to bring money to closing, we’ll roll this money back into our debt.
What about you – have you ever had to lose money to put yourself in a better financial position?