Whew, I really appreciate hearing that. I feel awful about all of it, the hearing and the telling. Do you mind if I ask? (And no need to answer publicly.) I gave this advice to a friend. Is there a pressing need to buy, right now? Prices are going up, so there's that. But they will stop, then come right back down. (They always have.) Check this out, this is Bakersfield, right off Zillow (dubious source, but for the sake of this conversation):
There's no one that can tell you that you're shopping at the top of this curve, but you're certainly not shopping at the bottom of it. You can hope that you're in the middle, but you're probably closer to the top than the bottom (my opinion only). So you've already got a built-in wealth building challenge by buying now. Can you ride out the rental, or a different one, long enough to get you to the other side of this curve, and closer to the bottom? Then you'd be golden! Your realtor should be able to furnish you with much better data. Has he had this conversation with you? Or our other forces dictating that you buy now?
I just can't help but compare your situation with my friend's. He's near 70. He bought at the top of the curve, when he was maybe a little older than you are now. He sunk in six figures after the purchase, because this was to be his dream home, and he and his wife were convinced they could flip the house at any point to make all their money back and then some. (People
do do this all the time.) But their lives changed, and the market changed, and now he's stuck. He's
still upside down after all the recent upswings (and this is the Bay Area, not CA valley). He can't sell. He can't move. He can't even rent it to cover the mortgage. This is just for the loans. His six-figure improvements
are a total loss. He blew his retirement, it's gone, and now he's too old to do anything about it. He's still working, on his hands and knees. He want's to move to another state, to be with his new love and he can't. Being strapped to his house has completely degraded his quality of life. And he is still, to this day, fixing the things that were wrong with the house when he bought it. His latest project was one that was cleverly concealed with paint (that's why I asked about paint!).
You're young. -ish. If this house turned out to be a mistake, you could recover. But you could also find yourselves in your late 60s, without anything in the bank, even or upside down on your house, at that point with enough equity that you couldn't walk away from it, but not enough to cover a loss, with a pool that
still leaks (it cracked again after an earthquake, even after you fixed it for $30K), no way to sell, no way to move... That's worse case, of course, but totally plausible. If you bought the same/similar house three years from now, for $100K less, that would make a huge difference 15-20 years later in what you could do. (Again, "three years" is a meaningless number, just hypothetical. Could be one year, could be 10!)
I'm not predicting anything, and no one can. That house could double in value. The leak could be fixed with putty. Etc. But this is about odds at this point, only partially negated by inspections and market history trends. That's really all you have to go on. But there
are prevention-type decisions that can be made. This might be one of them. What are the odds that the pool is an inexpensive fix and won't crack again (it's already done so once!)? What are the odds that Bakersfield real-estate will double in value over the next ten years (has it ever? Has it ever doubled twice without a correction?)? What are the odds that you'll want to stay in that home long enough for it to pay off financially? Etc... That's what Swampwoman meant by "you make your money on a house when you buy, not when you sell." It's this decision now, based on your current and projected income(s), that might govern the rest of your life. Dun, dun, duuunnnnnn. Awful, right?
Pardon me for saying, but the best thing you've said so far is "more of a forget it attitude." That's what you need when buying a house. It's near impossible. I get it. There's nothing wrong with you in that regard! You want to be in love with your house!! Of course! You should be! Why else would you commit to a 30-year loan!?! But you have to somehow fight off that very human trait. You have to be willing to walk away if you need to. That's one of the ways you know you're making a good decision. So kudos to you for reaching out. Asking for advice. Here and elsewhere. Get all that free advice first. If that's enough to convince you to walk, then you're done and you've spent a minimum to get there. Spend it on the next escrow. If not, then you've done your due diligence to rationalize the next steps (which cost more).
By the way, since I'm flogging you so... Your
realtor should be telling you all this, not a stranger. Someone here already pointed out: Dealing with a family friend is really sticky. I fired a realtor who was a friend, for lack of performance, and I haven't talked to her since. I hope that doesn't become an issue. You have a right, friend or no, to demand he do his job. And to review that job at any point to keep him on his toes. Make him earn that commission! He should have found that crack, day one (before he even showed you the house! A good realtor will visit every house on the market and know what it is before offering it to a client). He should have fought for the home warranty. He should be making some of these phone calls for you right now. Is he? He should be providing comps and market analysis, without having to be asked. And maybe he is. But realtors are very good and convincing their clients that they are "working sooo hard." Have him go dig you up a new pool!
That's working hard!!
Ask him what his commission is on this sale. Has he offered to credit any of it to you. That is done all the time by someone that is really motivated and really cares about his clients, let alone a friend! (I forget the exact MO for that, there's some Realtor rules, etc, but it is done.)
I'll give you one last bit of advice (until the next bit that is!!
), given to me by someone dear, which has served me oh so well for oh so many years. (And I'm not just talking about the realtor, I mean the whole deal, and your whole life for that matter.) Super simple, super easy to remember, applicable in virtually any circumstance (drill this into your young son):
If it feels icky, don't do it.
