What's the monetary value of really loving where you live?

[Jill]

My husband and I are trying to buy a house in the worst market in the country (Tucson). We've made offers on seven houses so far and every one has fallen through for some reason or another, several because the assessed value turns out to be much less than the agreed-upon price and we didn't want to pay more than the house is really worth (once it was a $25,000 difference). Until we found a house we really LOVE. But it may appraise $10,000 or more lower than what we've offered and I don't know if the owners will negotiate. So that brought to mind the question: What is it worth to live in a place you really love? Would you put off your FI goals and work longer to have a place you really love, or live in a place that's just adequate to your needs but doesn't make your heart pound so you could reach FI sooner? I pose this as a philosophical question rather than a "please advise me personally" question. What are your thoughts?

[catherine]

One thing I've learned over the years is that I've loved almost every place I've lived in. I never set out to love where I lived, but it happened. I really appreciated the small CT town I grew up in; I really loved the college campus I lived on, and I really loved the second college campus I lived on. I loved my first apartment in a Victorian home in a really cute town. I loved my country home out in the boonies. I loved the summer house I lived in. I loved the winter getaway house I lived in. I loved the homes we rented in Vermont over the years.

My point is, there are probably millions of potentially lovable places to live. I don't believe there's that one special home out there that's worth going overboard on budget to get. Sometimes I dream about an expensive budget-blowing place, but really, I'm pretty happy right where I am. And I'd be happy in countless other places, too, I bet.

[1tolivesimply]

Jill, unless the seller finds a cash buyer, they will not be able to sell the property for their asking/your offer price. Not many are in a position to come up with 10, 20 or 30K more to pay the difference between the selling price and the appraisal, I say you renegotiate with the seller, if he's not willing to, then too bad, you'll most likely find another property; if you're not in a rush, you can also wait (while you continue looking), because sooner or later the seller will have to lower the price.

[Kestra]

Interesting question. And something that is in the near future for DH and me, though not exactly the same since our market is so strong. To answer you, It depends... (like everything). How does the difference compared to your budgeted amount? And to the house price itself. $10,000 on a $80,000 house is much worse than on a $300,000 house. How much wiggle room is there in your budget? How far away is FI? Do you really like the house or the area? I'm more willing to spend more money on an area that I love, rather than the house, as I can change the house part somewhat. I can see how making 7 offers would become very tiresome, but I agree you don't want to go too crazy over the appraisal. Not sure how it works there, but who does the appraisal? Can you have it shown to the sellers? Definitely worth negotiating, but on the other hand, buying a house is a big deal anyhow, so I would consider paying a bit more if everything else seemed good and I had extra money around.

[sweetana3]

Are all seven offers accepted by the sellers but falling thru for other reasons like inspections and/or appraisals? Are they not even accepted by the sellers?

Tucson and many other areas are complex due to the vast number of mortgage issues, for example foreclosures. It is hard to do appraisals in a constantly changing market.

[JaneV2.0]

I've learned (the hard way) to always, always go with my visceral reaction to real estate. I'd be inclined to lay it on the line with the sellers, and maybe split the difference if you absolutely feel in your heart it's the house for you.

ETA: Loving where I live is very high on my priority list. Although I love my neighborhood, my house doesn't work for me to the extent that it's a big, stinky, dead albatross around my neck. If I could replace it with a slightly larger replica of my old digs, I'd be in heaven. For some of us, houses really do matter.

[pinkytoe]

Funny you should ask. DH and I sometimes drive to other neighborhoods looking for less expensive houses. Our property taxes are very high where we are so we need to find something more affordable in the long run. However, after many searches, we always come home and realize that maybe this house is worth the expense for now. It certainly isn't the house though - it is the neighborhood and community which make it special.

[iris lily]

I'm not very picky about houses because I like most old houses and could make most all of them work for me.

But location? That's important. Ever since I was a kid I wanted to live in a real city and now that I'm here, it's unlikely I'd move.

So yeah, I have to love the place I'm in in some way and I'll gladly pay higher city taxes and higher housing costs to live in a "real city."

[awakenedsoul]

I don't think you can put a price on loving where you live. It's a real keystone to happiness. Kind of like having an excellent marriage, or a caree that ignites you. I LOVE my little cottage and garden/farm, but as I've written in other posts, I have a very difficult time with my next door neighbors. But, as far as the big picture, this is a very financially advantageous place for me to live. Proposition 13 keeps my property taxes low, (after living here for 15 years I pay $1,400. a year.) I don't have a mortgage. I can bike everywhere, my utilities are super cheap, and I'm biking distance to the MetroLink train if I want to go downtown. The bus stop is a block away.

I'm really glad in this economy that I didn't shop for a home out of my league. By living very frugally, I was able to stop working at 47. I may go back to it when the economy improves, but I am really happy growing my own food, living very simply, and learning new skills like knitting, soap making, sewing, etc...

Many of my students got in over their heads with real estate. They bought two homes, are underwater on their mortgages, and their lives have become very stressful. One woman lost her retirement money in the stockmarket, lost more in her divorce, and now, at 60, she works full time as a paralegal and has a roommate. Another bought two homes, lost her job in aerospace, got her real estate license but couldn't make any money at it, and now is working in HR and commuting everyday. She's 60, too.

If the housing market stays like this until 2020, (which is what Suze Orman predicts,) I think having something that's easily affordable is very wise. So many couples are in situations where only one of them is working now. I cut my expenses in half and that really helped, too.

You're buying at a great time! That's a lot of it, market timing. The people who bought homes at the height of the market are really hurting.

[iris lily]

...
Tucson and many other areas are complex due to the vast number of mortgage issues, for example foreclosures. It is hard to do appraisals in a constantly changing market.

That point about appraisals is important, so true.

OP, have you actually SOLD you current house?