Hi guys. My brother has been looking for a new house for his wife and two kids. I knew they started looking about a month or so ago after relocating for his new job. They're in temporary housing now paid by his new company, which is good. I think they have one more month paid for. Anyway, they want to buy a 4 bedroom house in a competitive area with one of the best school districts. They bid on three houses last month and lost.
I just found out they bid on a 6 bedroom house that's 6,000 square feet (?!?!) and there's only one other interested buyer. This is the first time they think they have a decent shot at winning but it's over their budget and definitely more house than they need. I can't even imagine living in a 6,000 sq ft place. How in the world would you furnish it and keep it clean? Plus they don't plan to have any more kids.
I'm tempted to tell my brother to back out because I'd hate to see him get in over his head and get stretched with a mortgage bigger than planned with rates going up and so much house to maintain. But I also know he must be feeling frustrated from having lost 3 bids already and under pressure to get them out of temporary housing. And I don't want to piss him off since they already submitted their bid.
What would you do? Have you ever told a sibling you thought they were making a mistake on a big purchase?
My brothers and I quarrel about lots of things even to this day, so we've all grown a bit of a thick skin. If it was one of my brothers in that situation, I would say something with no expectation of him taking my advice. But I'd be glad to have it off my chest. Even though we don't always agree, we want the best for each other and have always spoken our minds openly. Sleep on it though and think about how he's reacted in past decisions you disagreed with. Perhaps he can afford more than you think, especially if he's using a mortgage lender. It's much harder to get approved these days.
That's a tricky one! You could try talking to him and asking a lot of questions instead of just telling him you think he's making a mistake. He might realize he put in an offer because he's in panic mode or he might surprise you with how much he's thought things through and feels it's a great house for them.
Did you ever consider a house this large before you found this one?
What will you do with all the extra space?
Do you think you'll move and downsize after the kids move out?
Sounds like a lot of house to furnish and clean. How are you going to do that?
What's the maintenance history? Is it going to be a lot of work to maintain and fix up or is it totally move in ready?
Hope that helps. Good luck!
Thanks Captain and Sydney. I decided to call him this morning because I couldn't just sit still any longer. I took the approach of asking a lot of questions and letting him do most of the talking. He admitted that he's been nervous as hell after putting in their initial bid. The latest news is they are supposed to get a counter from the seller tomorrow. He thinks the other buyer is favored to win at this point because he doesn't want to get into a bidding war and is probably not going to agree to the counter offer unless it's a fractional change. He realizes this isn't their ideal house being that it's bigger than they need.
So most likely they'll have to keep looking for another house and I haven't had to get into an argument with him. phew
Snow - What area, price, price/sqft,etc? Need some numbers to make a better assessment. How much can that house be sold for? When was it last sold and at what price etc?
Many markets are slowing across the country as inventory and rates pick up.
Mortgage banker for 20+ years here, also family of four, and have owned 30 houses... my .02 on this is a gut reaction of "nobody needs 6,000 sq ft" and given your brother's nervousness perhaps secretly he's hoping the other offer is accepted.
SWAN comes to mind, and splurging on 6K sq ft for me would squash the SWAN for sure!
To each their own, however, I must say that through the years I've had many clients buy the 5-6K sq ft home only to return a few years later wanting to downsize. The electric bills, water bills, furnishings, cleaning, upkeep, and the list goes on... it takes a toll for sure.
Your brother could buy a 2,500-3,000 sq ft home which is more than plenty for a family of four, and invest the difference. Perhaps hang on to the money saved then find an investment property during the winter (as Sam points out and I agree wholeheartedly), get a tax deduction, and make the investment a designated savings vehicle for the kids' college funds?? Just an idea, but good luck with the approach as it's quite difficult to convince family sometimes that maybe they should re-evaluate their decision 8)