OT Buying A Townhouse

A house is just a box where you put your stuff to keep it from getting rained on. Never fall in love with anything that cannot love you back.

A rule of thumb for wealth building is never buy a home until your previous home is sold. It is bad for your wealth to be paying for 2 mortgages. It is especially bad to pay for 3 (you both have condos), especially whan you are significantly in debt (the $15K loan), and especially when you are planning to spend a big chunk of money (wedding and follow-on festivities), and that goes double when you are not married (a non-married couple can break up in a heart-beat, leaving a financial mess).

Selling a condo is not a slam-dunk right now. I see people having to discount condos by $50K and $100K just to get buyers to walk through, let alone trying to get any offers. You might find that you simply cannot sell at the prices that you might need to get, and you may end up being condo owners for a few years until the market finishes correcting.

So, the rules are:

2) never buy until the previous homes are sold.

And if you can, head to Vegas or Hawaii and forget the expensive wedding. With 50% of new marriages ending in divorces, why spend big money on a one-day celebration for something that has even odds of failing? Save the money, and use it to celebrate your 50th with a around-the-world cruise on a luxury liner.

-john-

John, I've heard MANY people make this point on this group, and I've been wondering... has anybody, anywhere, ever, heeded this advice?

Nobody goes into a marriage thinking it will fail, so how can we hedge against it? I'd bet dollars to donuts that when Marty read that statement he IMMEDIATELY thought, "Yeah but we love each other. We're part of the 50% that's gonna make it." I bet everybody says that. I bet I would say that.

It's sound advice (and I'm not attacking you by any means), but I hear it alot and I think it will perpetually fall on deaf ears.

I cannot agree with the above reply by John. I have heard too many horror stories where people could no sell their houses or condos and ended up paying 2 morgages.

Sell both condos first then think of buying new townhouse.

There are so many expenses ahead of you.

1. Paying the 15K debt
2. Marriage and other festivities (Trust me you will always go over budget. People think....its my wedding, I am happy.....lets spend)
3. Your would be other half may lose her job.

Good luck with condo selling and wedding

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Without looking at immediate situation, my first impression was to sell the condos before signing anything to purchase another property.

I have sold a townhouse before, and my experience suggests a townhouse being on the market 4 months is short. Townhouses and condos have a very specific market- even when RE in our area was selling like hotcakes, that was single family homes, not condo/townhouses.

Considering you found a property you want to buy, you need to think about options:

I like 4). You are getting married, take your time and do not make an emotional decision. Life will be stressful enough when you get married and planning the wedding.

Marty,

Who has the 15k loan on their 401(k)? They are usually payable in full (or declarable with penalties) if the acct. owner becomes separated from service. A loan that is callable at any time does not make me sleep well.

Do you have a realtor? I would not ordinarily recommend a realtor right away, but they have access to many things that could help you make a more informed decision. For instance:

1. Are there other offers on the property? If not, who cares what the seller wants. He may WANT to close on the house tomorrow, but without an offer he's out of luck.

1. How long are houses sitting on the market, on average, in your area? Four months doesn't seem that long. I bought a beauty of a new house in March that had been on the market for over 400 days.

2. How many others are viewing the townhouse, and how often? The realtor should also be able to tell you this. The lockbox and/or signin sheet should record if there has been heavy activity. Multiple viewings by the same realtor and/or a recent uptick in viewings should be a sign that other offers are more likely.

1. Are there similar townhomes, with similar features? This was the second one you saw, did you keep looking? I almost made this mistake. I loved the FIRST house we looked at. Thankfully, our realtor is a good friend of mine who insisted we keep looking. The house we eventually bought, and liked more than the first, was the 12th house we looked at. It was also right around the corner from the first house. They were nearly identical. In a crazy attempt to turn a profit, contractors build houses TO SELL. There are only a finite combination of appointments, add-ons, and extras that can be done to any one property. Especially in a smaller setting such as a townhouse. There are other fish in the sea. There will be other houses. I doubt this is the only worthwhile property in your market.

There are alot of ways you could find yourself in alot of trouble fast here. Losing your job and having the loan called, having difficulty selling one or both condos, having to sell at a discount, your wife having trouble finding a suitable replacement job, your wedding costing more than planned, etc, etc...

Good luck, but DON'T RUSH IT!!!

John, Never, ever let your emotions drive the purchase of a home; it will get you in trouble most every time. I know it seems like it's perfect but it's not perfect-- because it's happening at the wrong time. I know it's hard to hear it now, but there will be other places when the timing is right. Let this one go...there is no reason to start off a marriage with serious financial woes. It's hard enough in the beginning of a marriage and finances are a BIG reason why.

The poster above me gave excellent reasons why you should never buy before selling your current place so I won't get into that.

Belle .

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I know some people who opt for the cheap, er, frugal Las Vegas wedding, but not because it'll fail or because they are saving for that big cruise in 50 years (they may be dead in 50 yrs for all we know).

I wasn't saying they shouldn't go cheap (hence the "sound advice" statement). I am saying that right or wrong, most people will not heed this advice.

It has been my experience that the betrothed are more apt to spend more on the premise "this is going to be our only one, so we're going to do it right." From the outside looking in, we know that 50% of these people are wrong and John's advice is prudent.

But I say again, very few, if any, go into marriage expecting a divorce.

I did. In fact, Mrs Taxpayer kept her last name. When coworkers (we work at the same company) asked about that, I replied "It'll make the paperwork easier in case we get divorced." She still introduces me as her 'first husband', 13 years later.

Even so, we talk to the bell curve, and your statement is correct. Few people accept my advice of a prenuptial, or to keep the retirement accounts somewhat balanced to avoid too much tinkering after a QDRO. JOE

Thanks all for the great advice.

~Marty~

It *eats* too, and them suckers are expensive to feed!

I work with a woman who's daughter at 43 is getting married for the first time and mom & pop are footing the bill to the tune of $15,000 to $20,000 for the wedding. Both bride and groom are in their 40's and both have houses. I just shook my head and walked away when she told me. This woman & her husband are in their 60's and ready to retire. I thing the daughter needs a kick in the ass. Thumper

We did. I'm from a large Catholic family. One aunt has 12 kids, another 8 (plus 2 adopted) and many, many more where those came from.

Weddings run into each other in the fog of memory. Nobody can remember what happened, when, where, etc. ... and, as such, in our mind they're a big waste of time and money.

Our wedding cost $1,200 bucks and change. Less the photos and the honeymoon. We spent another $2,000 on a

Our logic was: (a) Spend money on the photos. These will be a lasting reminder of a wonderful day and, quite frankly, crappy photos would suck and (b) spend a few bucks (but not many) on the honeymoon -- our time to enjoy, purely for us. The rest is pure horse-hockey and a complete waste of money.

Grand total was under $5K. Some folks in our family spent that on a catering bill. I've been to several weddings in my life where the bill was over 6 figures and one where the parents came out of retirement for a number of years to finance the spectacle.

What a waste.

Our decision was based purely on financial reality and our goals in life, not on a guess or hunch of "will we make it or not". You always assume you'll make it -- but why start with a mountain of debt, you know, money and finances being the number one reason for the divorces and all that.

When asked what I'd like, I usually answer "make a donation to xxx (my favorite charity." I don't always get away with it, but when I do, it's the sort of thing that brings smiles all around.

Elizabeth Richardson

Notice that there are all kinds of bride magazines but I have not seen any for grooms. Thumper

It was in my financial interest as a groom to let my bride choose the stuff for the wedding. It was also in my emotional health's best interest, but finances do play a roll in catering to brides.

Because if groom was actually allowed to choose a) bride would also choose different things, doubling cost of wedding b) wedding gowns can run thousands of dollars, as tux rental costs less than $100. c) I would not start a marriage off arguing with bride about one day d) most weddings would take place at ball games, bars, backyards or fraternity houses, and the whole wedding industry would then suffer a financial collapse which might rival the great depression.

That's exactly my point. I was not suggesting that couples should spend a fortune or go into debt to have a marriage ceremony. Like you said, you made the decision based "on financial reality" not because you were hedging against divorce.

I was simply making an off-topic comment to Mr. Weeks. I think his advice (which was to have a frugal ceremony, because of the high divorce rate) was spot on, but will rarely be heeded.

I doubt this will get past the moderator (as it's off-topic) but I've gotta try ...

Dude -- you're the man! This is absolutely awesome. Too many folks today get caught up in the commercialization of these holidays that do nothing but perpetuate our rampant consumerism and consumption driven debt.

I once heard that Valentine's day is a complete hoax. Never was a holiday until one of the greeting card manufacturers decided they needed to increase sales. What better to rob the American consumer of yet more money than to invent a new holiday and line your pockets with guilt-driven revenues. (I'm not sure of the story, but it's the way I heard it years ago).

If more folks had your attitude, far fewer of us would be struggling to make ends meet.