House Purchase Hypothetical

[arivecchi]

All other things being equal, would you rather:

1) buy a house in good condition in a great lot in a conservative price range that could use some updates over time (OPTION 1)

or

2) buy a house that does not require any updates (everything remodeled) in a lot that is not as pretty or unique but costs a lot more so it would require a much bigger mortgage and down payment (costing $150-200k more) - meaning it would be more of a stretch financially (OPTION 2)

Curious as to what most people would choose. This would be for a long term purchase.

[georgiegirl]

Option 1, especially if DH were handy (but he's not).

[acmom]

Probably option 2, as my DH is not at all handy and really short (due to work) on time to plan or do house projects. It could take us forever to redo stuff.

My BIL is a contractor and when we were looking at houses last year, he encouraged us to look at places we would be happy with now, rather than plan to do a lot of work to (knowing DH didn't really have the time or motivation to do those projects). He said in his experience, people sometimes spend a lot more than they thought they would when remodeling/updating and also some people never actually get around to what they planned to do.

Now, if remodeling is a passion for a couple and they enjoy the process, then I think that is a different situation and I would go for option 1!

[TxCat]

Assuming the neighborhoods were equivalent, and the overall "bones" of option 1 were good, I'd go for Option 1. I'd rather spread that cost over time by gradually redoing Option 1. Plus, even in looking at remodeled houses or new houses, it's been hard for me to find a house that has exactly what I want (ie, it's new, but NMS exactly). If you are patient about a remodel, you may have a better chance of getting exactly what you want in the long run.

[Kindra178]

Number 2, if the updates were awesome/to my taste or style. The idea of living through a remodel sounds awful. Honestly, it's hard enough to get homework done, everyone to their activities, etc without the added complications of contractors present.

We bought an updated house but we don't really love the quality of the work they did or their taste. DH and I were talking about this yesterday. He said he would prefer to move than live through a basement dig and first floor remodel. We paid an inflated price but in retrospect, maybe we should have paid even more for a better version of an updated house. There wasn't a ton of inventory and we were limited by impending due date of those twins!

[WatchingThemGrow]

either - We just need a house and can deal with either. Actually, with aging parents nearby and 3 young children, and a sole-income provider, AND DC in/out of the home all day, already done fits us better right now. Workers in/out, busy nights and weekends for tired parents, mess all over the place - in multiple areas of the house for a few years would be difficult.

[o_mom]

In general #1, but it really, really depends.

Exactly how 'not pretty or unique' is the lot? If lot #2 is just 'ordinary', not has flaws (corner lot, busy street, odd shaped, etc.) then that is less of a factor.

Our first house was more like #1 and we did a lot of renovations to it ourselves. Our second (current) house is kind of in between. It has a very good lot for this area. It did not need any immediate updates, but will before we move again. Nothing bad about the house, just nothing stands out on it. We are waiting until the boys are older and less destructive (and more helpful?) before we do anything. I think we will kind of skip over a generation of updates that way.

When we were buying it came down to comparing it to another house with a similar update level, but smaller, more generic, lot and lower ceilings. That house was about 15% less, so potentially, we could have made some major updates to it and had the #2 in your scenario. But, as our realtor pointed out, while we could use that 15% to update the other house, no matter how much we put in, the lot would never get bigger and the ceilings would never get taller, both of which are major selling points later on. I do think that was the right decision for us, because as I said, after living with it for a bit, we have decided that most major interior improvements will wait anyway.

[kmkaull]

Just by the way you worded this, it sounds like you prefer #1.

Personally, I would keep looking. There's not a lot of inventory out there, so houses go fast. But I would try to find something that will work in your price range and won't require a ton of updates.

[SnuggleBuggles]

Without a doubt, 1. Eta- we did buy 1 and our renovation list is still pretty long. I'm not someone who "needs" a fancy new kitchen, for example. My kitchen is functional and some day we will probably make it prettier. The house has good bones and we just don't feel like other projects are necessary for our happiness and enjoyment of the house.

[AnnieW625]

We bought #1 because we could not afford #2 in our area. Had we lived in Nor Cal we might have been able to buy #2, but it would have had to be in a few particular neighborhoods we liked and that w felt were worth the stretch, especially if it was new construction of less than 10 yrs. old (although new construction could have potentially been cheaper if we were willing to give up a neighborhood feel, mature trees, and proximity to some of the best high schools in the region).

At our current house we have done:
painted entire inside of house (did some in 2005, 2006, and finally finished in early 2012)
refinished the wood floors not to long after we bought in 2005.
replaced all windows, blinds, and the front door in late 2008/early 2009.
replaced the heater in late 2009.

We are still hoping to do a full kitchen remodel and living area add on in the next 5 yrs. . We might have to replace the kitchen floor prior though.

[vludmilla]

Having chosen #1 only to find that despite having the money to do renovations, I HATE the process of doing them...I would choose #2. 150-200k in additional mortgage and down payment is not all that much in the grand scheme of things and I think my time and quality of life have a certain value. I also find that renovations cost a lot and I think when you buy a renovated home it is often a better value unless you plan to do much of the renovating as a DIYer.

[cvanbrunt]

Having done renovations on two houses, option 2.

[crl]

Well, I'm even fussier about kitchens than I am about strollers. So I'd rather buy a house that needs a new kitchen and do it myself. If it's updated then I'm stuck with someone else's bad layout/bad taste/cheaping out on something that I think is important. The rest of it I'm more neutral on--I don't have as strong of opinions about bathrooms, etc.

I also buy into the idea that pretty much the only thing you can't change about a house is the location. So we always prioritize location over things like whether the place has shag carpet.

This is our third house and all three have needed work. The first place we did most of the work ourselves--mostly dh although I am the research and planning person and also the painter. We finished the basement (drywalled walls and ceiling, did a built in bookshelf, switched out lighting, paid to have new carpet laid), updated the kitchen (painted cabinets, new countertop, new lighting, new appliances, new flooring) and some other more minor things. The second place we hired it all done, but acted as GC. And this place we will hire it all done and hire a GC.

Catherine

[BayGirl2]

Hard to answer for me. We did #2, bought new construction instead of a house needing upgrades. But the price difference wasn't as much, and once the upgrades were done it probably would have cost almost the same. With new construction everything's more efficient, fits our lifestyle, and only requires maintenance. We had also considered raising and remodeling our old house, which would have cost only slightly less in the long run.

My DH is super handy and I actually thought he'd be bored if we didn't have major work to get done. He isn't, he's been able to focus his skills on things like a custom built breakfast nook, play kitchen, and garden boxes. All upgrades that have added value and still been fun.

Some of its a financial question too. What would the upgrades cost? Would you do them regardless? A major remodel can get to $100k pretty easily and that money's got to come from somewhere.

[quinnsmom]

Option #1. We are about to go through this process. We plan to buy this summer. We have owned many homes-both old and brand new construction. While its easy to be dazzled with new, I think lot and location are much more important. As well as not being house-poor. We've been there as we were dazzled by a new and perfect house (not the location) and for us - its not worth the life style it took for us to handle and maintsin. A lower-priced house allows for other kinds of luxuries ( like vacations and extra-curricular activities for the kids.) Plus with an older home you can redo rooms a little at a time in the exact style of your choice. My DH is very handy and can fix or build whatever we like so that plays a big factor in choosing option#1 too. I don't know if it would be worth it if we had to pay someone to make all those changes in the future.

Also which house feels "right"?

[Tinochka]

I will go with #1. We looked at about 27 houses and I found out that “perfect” houses had tiny yards, which was not perfect for us or some of the things were not up to my taste to pay the price. Our house needs some updates eventually, but non of the things are broke right now. We liked the location of the house, the space outside, the layout of the house. We figured out, that we can change things in the bathrooms if we up to, but non of them involved with moving walls projects (we almost bought another house, but DH didn’t like the tiny master bathroom, wanted to remove the walls, if I still would like that house, which I was not up to). I am painting the house, when I come up with ideas and time, we are changing the light fixtures; I might tackle kids bathroom this summer (sanding the cabinets, painting them and the walls, changing mirrors and faucets, I’ll put vinyl tiles on the floor, because eventually I might want to change the tub. I might learn to put tiles on my own (my relatives do it back in my country). I refuse to pay money we paid for a tiny bathroom foor in the house we sold. I like learning new things and doing the things the way I want it.
We just removed old bushes, rockes and planted tulips, daffodils, etc. upfront the house last autumn (me and kids). It took some time, but I was not in a hurry, we worked, when we up to. Kids loved loading their trucks with rocks and putting bushes in the trash bin.

[ellies mom]

I would go with #1 because if finances take a downturn, an upgrade can be postponed but a higher mortgage payment can't be. Things don't always go as planned and I'd prefer to have that buffer.

[BayGirl2]

Also wanted to add that I think timing plays a role. We made the decision when I was pregnant and I knew we'd be spending the next few years with babies. Not the time we wanted to also be doing a huge remodel. I think if your kids are older the decision to take on a project like that may be different.

[hellokitty]

Option 2. We are on our second house. Both have been fixer uppers. First one was over 100 yrs old and we basically had the attic converted into a beautiful master suite. Well, we only got to enjoy it for a month, b/c DH got a new job and we lost $ on that deal for sure. For house #2, it was the least ugly of the houses we looked at (ht of housing market and we were the only fools looking for a house on christmas eve). The house was ok, but generic and it needed updating. We figured we did it for house #1, so #2 looked easier. Well, 10 yrs later and we finally JUST finally completed all of the stupid little updates and remodeling that we thought would be, "easy."

Basically, I am sick and tired of this crap and working with @#%$#@$! contractors who don't care or do a crappy job. I told DH we are either going to build our next house or just get one that doesn't need any work done, b/c we are sick of it. DH is very handy, but we ended up spending a lot more $ than we had anticipated hiring someone last yr to finish up the last of the projects, b/c he had procrastinated for YEARS, and there is a possibility he may get laid off, so we wanted to make sure that the house would be in sellable condition (ie: nobody wants a fugly pink bathroom anymore).

It does depend a lot on how handy AND motivated your dh is, if he wants to tackle these projects himself. My DH is handy, but not motivated, which is not a good combo, he may as well not be handy, b/c it is like pulling teeth to get him to do stuff many times. I know some ppl who are just flat out not handy, but if they have the $$$ to hire someone to do it, fine, option 1 would be great, if they don't have the $, but THINK that they can do it, I highly push them toward the #2 option. We rarely have a house project that goes as planned, as they are getting into the project, some other issue or problem is discovered, which adds onto the bill. It's pretty painful.

[arivecchi]

I would go with #1 because if finances take a downturn, an upgrade can be postponed but a higher mortgage payment can't be. Things don't always go as planned and I'd prefer to have that buffer.It's not for us but relatives looking at houses right now. This was my thinking too.

[kara97210]

If the renovations were primarily cosmetic, definitely Option #1. I would be swayed by the better lot and better mortgage.

We are in our 3rd house that needed some renovation, in this house it was a full height basement that we finished last year. I am kind of picky about house stuff and with each house we’ve bought I’ve rejected houses that were newly renovated, but in a style I wouldn’t have picked. For example, brand new granite in a color I really, really didn’t like. I would feel guilty pulling out new granite and would rather live for a bit with an un-renovated space and pick the things I like over time.

[o_mom]

It's not for us but relatives looking at houses right now. This was my thinking too.

LOL - I was wondering if you were crazy. ;)

[arivecchi]

LOL - I was wondering if you were crazy. ;)
Nope. :) It's for DH's brother. They asked for our advice and we told them we would be conservative - as you never know in this economy. We were pretty conservative with our current purchase though and passed on bigger and fancier houses. We made riskier purchases in the past and learned our lesson. I was wondering what most people would do though. Thanks for voting!

[egoldber]

Well, neither. Location, neighborhood and school district/pyramid are the most important things to me. More than lot size or quality of type of house.

That being said, we are now building because we could not even consider the thought of having to live through anything more than a super cosmetic remodel with our current hectic life.

[elliput]

Option 1. I can live with dated features and am handy enough that I can do many things by myself.

We are in the process of an "Option 1" purchase right now and chose it over two "Option 2" choices. For us, Option 1 was much better for a variety of reasons- walk-able distances to school and playground/park, mature trees, more sq ft, more developed neighborhood.

[spannaz]

I'm more partial to option 1. I'd rather save some money, have a great lot (which is something you can't change), and put my own stamp on a home slowly with the money I saved. That's how I envision my forever home. A space done to my personal taste and needs.


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[niccig]

Option 1 but it must have enough square footage. We bought conservatively (thank goodness), but we thought we would only be here for 3-5 yrs and then move up, so we compromised on extra bedroom. Of course, we're still here and I could have used it as an office while I'm studying. You also have to be able to live in the house if don't do the work for some time. Best advice we got was to buy a house that we could live in for 10 yrs if bottom fell out of market (from a friend who got caught in 90s crash). We followed that and while I would like an extra room, it's totally livable.

Option 2, too risky, unless know you're job is secure and you'll always be able to make the higher payment.

[lhafer]

Option #1. Because a house is never going to be perfect. Even the brand new/completely updated/remodeled ones. You will find stuff you don't like, want to change, want better, want different, etc.

So go with a location that is the best, and the house can ALWAYS be worked on along the way.

[Indianamom2]

I would go with #1 because if finances take a downturn, an upgrade can be postponed but a higher mortgage payment can't be. Things don't always go as planned and I'd prefer to have that buffer.

:yeahthat:

[noodle]

Option 1. We will not stretch financially for a house.

[alexsmommy]

Most likely #1 even though we are not at all handy. But it would really depend on what types of updates you are talking about vs whether number 2 was updated in a manner that fit with our taste. As much as it sucked living though our bathroom remodel, we liked that it is now what we really like. Our kitchen was updated before we purchased and its totally NMS, but it makes no sense to change it unless something drastic changes and we are able to expand it. I really don't like it though and it kind of stinks that it makes no sense to pull out perfectly good cabinets. It's not apples to apples for me, I'd need to see my choices. Also, the extent of the updates is huge... changing layout vs redoing walls etc. We have had to have our plaster walls replaced room by room in our current home. Nightmare of mess and dust, but we didn't change the layout so each room was about one week of mess start to finish. One more room to go...

ETA: we basically choose #1 and are so glad we did. The downturn in the economy was really rough on us - I'm self employed and as people lost their jobs and insurance, my business volume went down and DH was un/under employed for a year. We were so grateful we passed on a larger more updated house we loved. We would have really struggled to keep it during that time. Things were tough, but manageable in our current situation.

[icunurse]

Option 1.

We have been kinda living around this question for the past year. We put our home up for sale because it wasn't "the dream" and has several things we don't love. We have less than five years left on our mortgage, so we didn't want to spend so much that we were back up to 20 years, but would have considered 20 year mortgage. Besides not seeing a single house that had everything we wanted (and would thereby be "settling" again), we came to appreciate what we do have....low mortgage with 46 payments left, reasonable property taxes, great sized yard that enables us to have everything we want (large garden with fruit trees, huge deck/paver patio, room for a 24 ft pool and deck-just looked into that today!-and tons of room for running around, etc), excellent schools, nice neighborhood, decent sized home. (Things we don't love...not a ranch and dislike stairs; subdivision is right off busy street, but we are far back into it, near a park, bike path, and forest preserve; kitchen small, but I have obviously made it work for the last 14 years). No home is perfect, especially with needs changing over future years.

We are financially cautious by nature, but after DH was laid off from his job a few years back, we really do take having an emergency plan into consideration. A bigger mortgage can become a burden if a job is lost, someone becomes sick, the couple divorces, or whatever. Pretty and modern now can look worn down in 15 years - will the bigger mortgage allow an update, if wanted, at that time? Will there be money left over to enjoy life- travel, home decor, hobbies, etc? For us, we prefer financial safety and a nice house vs a big mortgage and chasing the dream.

[mackmama]

Option #1 for me if location is equal in both. DH would choose #2.

[theriviera]

Option 1. We did that with our current house and went though a huge remodel (we had to move out). We are doing it again but this time we the house was in terrible condition and we scraped the lot. I would much rather be able to do things to my taste.

[cono0507]

We did option #1. Bought about 2.5 years ago - one of the most desirable lots in the neighborhood we wanted to buy in. We bought knowing we'd completely gut the kitchen (think builder basic 1995 kitchen, though large, but falling into disrepair). This spring we are completely gutting the kitchen and I can't wait to make it my own! :)

We've done #1 in the past also. Things like lot, location, school district can't be altered but if you can live with the remodelling process, you can change out the rest that bothers you.