Not pursuing a McMansion in foreclosure killing me....(long) - Page 2

[Porcelain Interior]

Just echo-ing....you really don't want a house that big because it's a good deal, and as others have said if it was worth the higher amount it would be selling at that.

McMansions are known for subpar materials and construction techniques, not all, but many.

When you buy something that big it's so hard to downsize your bills if you have to.

We have an old 2500 sq ft house (IMO that is massive and excessive for us 4 people) and it's heck to heat and maintain.

Buy a little more than what you need, and don't buy a house thinking you'll be able to flip it. The market is going to be unstable for a long time.

I think you did the right thing.

[Alare]

I believe a 4000 square foot house (plus basement) is completely ridiculous no matter the persons income. Could you imagine sweeping/vacuuming it everyday? No thank you.

You were right not to jump in and get it--other people have mentioned it too, but usually people are not nice to the houses that they forced to go into foreclosure for. Have you ever watched the flipping shows? Garbage tossed everywhere, feces and urine collected in buckets, everything that can be torn out of walls has been.

[ShaggyDaddy]

Originally Posted by wildmonkeys

That being said - we would have picked up more than $400k in equity in a flash and be in a lovely home

a house is worth what someone will pay, not what the appraisal says, not what the list price says, not what the county says.

Pretty much you would have zero equity on day 1 because you would be the only one willing to pay the price you paid... If someone was willing to pay more, then you wouldn't get it for the low price.

so although the 400k in equity you MIGHT be able to get if the market picks back up is something that COULD happen, it will DEFINATLY not happen today, or tomorrow, and probably not even in the next few years.

[CameronsMama]

Originally Posted by wildmonkeys

What do you frugal mama's think? Would you get overextended for a chance to make money or were we nuts to consider a McMansion (our current home is 896 sq feet and this one is 4,000 plus the basement

I wouldn't get overextended for anything...not in this economy. I think you are right to pass for all the reasons pps have said. It may seem like a good deal now, but as pps pointed out if the house was worth that or more, it would have sold for that or more already. The values of houses like that are still sinking, so even if it IS worth more on paper, it won't be for long.

If you are serious about getting into a bigger house what I would do is this- figure out what you need (like how many square feet of space is ideal for your family, how many bedrooms, what you can afford, etc) THEN find a house that matches. Looking at houses without out a plan is what got a lot of people into the mess we're in now.

And seriously 4000 sq ft? Good grief who needs that much space? Who wants to clean that much space?

[Crunchy*VT*Mom]

You made the right choice.

[stretchmark]

I agree that you made the right choice.

If you are itching for a change and have some money, you could always add on a room to your current house assuming there is space on the land.

[texmati]

Originally Posted by A&A

:

My dd calls McMansion neighborhoods "Dursley neighborhoods." (reference to Harry Potter.)

Lol!!! I almost spit up on myself laughing!

[PrettyBird]

EEekkk, I cringed at the power bills for our 2 bedroom apartment in the DC area. I think I would drop dead seeing one for a 4000sqft house. BGE raised rates by 72% in 2007.

[EFmom]

Originally Posted by Alare

I believe a 4000 square foot house (plus basement) is completely ridiculous no matter the persons income. Could you imagine sweeping/vacuuming it everyday? No thank you.

Umm, if I could afford a 4000sq.ft. house, you'd better believe I'd be paying someone else to do the sweeping and vacuuming.

[Aufilia]

When you're buying a foreclosure, don't discount the cost of fixing it. Remember, the last people who lived there couldn't afford their house--so chances are, they also couldn't afford to do maintenance on the house, either routine or emergency.

We bought a foreclosure property in March. It was on the regular real estate market so we could get it inspected (but not get the bank to fix anything). So we knew before we signed the contract that we'd be looking at replacing the furnace, gutters, entire master bathroom (it had huge water damage), garage doors, entry door, etc. And hey, the last owners didn't even do anything malicious before they were evicted! They even left most of the appliances. Next year we're hoping to rebuild the porch, do the back deck the year after, and maybe tear out the rest of the purple carpet upstairs after that.

Anyhow, our house is ok, and in 10 years it will be awesome. But whatever you do, don't buy a foreclosure if you can't get it inspected first, so you know what you're getting into. Be prepared to find lots of stuff to fix. Plus, since we bought after auction, the bank was willing to strike a deal just to get rid of the property, and we paid about $70k less than the auction price.

[wildmonkeys]

Hi all- So I had to check in and give you an update. DH went to the sale today (without a cashiers check, but just to watch). There were about 10 different bidders there trying to snag the property which ultimately went for $750K Which we never could have afforded in a million years so that made us feel great, ironically. DH said the man that owned the house was there begging everyone not to bid on it because he has two kids and wanted to keep them in a good neighborhood (the mean underbelly attitude of such a neighborhood as mentioned by a pp )

I am also feeling good about my instincts that it was a good value at $410K and still something buyers would desire -the house is less than 10 years old and looked great from the outside - a bunch of posters mentioned that a house is worth what it sells for and it didn't sell for $410K, but it was NEVER for sale and banks can't sell a foreclsoure at a profit until AFTER the public auction. The profit at the auction goes back to the original owners so Mr. McMansion made over $300 today and might have to move his two kids into our crappy neighborhood )

I have never wanted a McMansion, a longer commute, bigger carbon footprint, but dh and I feel a bit stuck here and starting to look for creative exits....

Thanks for getting it ladies - I would have spent all my time explaining to the kids teachers that dh works for Peace Corp and we really aren't rich or antienvironmentalists :

[hollyvangogh]

Originally Posted by wildmonkeys

What do you frugal mama's think? Would you get overextended for a chance to make money or were we nuts to consider a McMansion (our current home is 896 sq feet and this one is 4,000 plus the basement

Getting overextended is probably how the original owners ended up having the house in foreclosure to being with. I think you made a wise/prudent decision. Keep your eyes open. The right place will come along. Besides, I think your concerns about the kinds of influence the neighborhood kids might have is a genuine one. I grew up in a rich suburban city (McMansions EVERYWHERE). A lot of those kids were really messed up and it messed me up for a long time to be surrounded by them (we definitely weren't a McMansion family).

[p.s]

Originally Posted by p.s

And that only 1 person shows up to bid on the house at $410k.

so if you want to go to the foreclosure route, go to a few local auctions. You can possibly meet some local real estate investors, and hopefully will find that just right house at the just right price at the just right time.

[Usually Curious]

I would love to downsize right now! There is no way I'd buy a 4000 sqft house with the cost of utilities, especially up north where you'll have to heat it all winter.

Good move!

[WNB]

I can understand why you want more space, but I think you are overselling the promise the foreclosure offered. If it sold at $410, that's its market value. You wouldn't pick up 400K in equity overnight just by signing the purchase agreement. You would be picking up a lot more overhead expenses, and a half hour commute in the dc area can really be dreadful on bad days.

edit -- just read your update and I'm glad you are feeling better about it!!

[mnnice]

Originally Posted by wildmonkeys

Hi all- So I had to check in and give you an update. DH went to the sale today (without a cashiers check, but just to watch). There were about 10 different bidders there trying to snag the property which ultimately went for $750K Which we never could have afforded in a million years so that made us feel great, ironically. DH said the man that owned the house was there begging everyone not to bid on it because he has two kids and wanted to keep them in a good neighborhood (the mean underbelly attitude of such a neighborhood as mentioned by a pp )

I am also feeling good about my instincts that it was a good value at $410K and still something buyers would desire -the house is less than 10 years old and looked great from the outside - a bunch of posters mentioned that a house is worth what it sells for and it didn't sell for $410K, but it was NEVER for sale and banks can't sell a foreclsoure at a profit until AFTER the public auction. The profit at the auction goes back to the original owners so Mr. McMansion made over $300 today and might have to move his two kids into our crappy neighborhood )

I have never wanted a McMansion, a longer commute, bigger carbon footprint, but dh and I feel a bit stuck here and starting to look for creative exits....

Thanks for getting it ladies - I would have spent all my time explaining to the kids teachers that dh works for Peace Corp and we really aren't rich or antienvironmentalists :

It does sound like attending the auction was a good learning experience and that your instincts for this kind of thing might me good. The house itself sounded like poor fit for your family though.