Sunday, September 11, 2005

I am Breaking All the Rules

...or I could be about to, anyway.
I went to an open house today. A studio, in a great location near where I live now. It meets a lot of my criteria for what I'd like my next home to be-- a 2nd floor apartment in a small, self-managed co-op building, with low maintenance fees, major work like new roof and boiler recently completed, laundry and storage in the basement, can be lived in without renovation but has things that could be fixed up to add value later, room for a table in the kitchen, a window in the bathroom and kitchen, and windows on two sides of the main room for good cross-ventilation, and (drumroll please) a HUGE PRIVATE DECK.
The downside is that it is only a little bigger that where I live now, doesn't have the lovely southern exposure that I have now, has less closet space than I have now, less kitchen cabinet space than I have now, not as nice a bathroom as I have now, there's more traffic noise than I have now, AND all these privileges would cost me almost $700 more a month than I pay in rent now, and that would depend on the seller accepting an offer $22,000 below his asking price, and my coughing up $75,000 for a downpayment rather than the $50,000 or $60,000 I'd planned on, and my getting a very good mortgage rate. (If I paid the full asking price, with only 20% down, and got a mortgage at 6%, which might be a more typical scenario, it would be even worse-- total monthly cost including utilities would be around $1800, vs the $850 I pay now.)
So of course I am half in love with this place, dreaming of summer barbeques in my beautiful garden and cosy evenings in a place where my bed will be more than 4 feet away from the stove and cooking a meal won't shoot the room temperature up to 95 degrees.
What rules have I broken? "Look at lots of apartments before you bid." I've been farting around with online listings and gone to a couple of open houses but haven't seriously worked with a broker. It would be a bad idea to bid on this place without seeing more. "Don't look at apartments that are above your price range." The asking price, and even what I considered offering, are above the limit I had always set for myself. It's stupid to look at things you can't afford, because then you'll fall in love with something you'd have to overextend yourself for. "Be realistic about your budget." My calculations have factored in some cutbacks in a few lines of my current budget. Perhaps owning a home would be enough of an incentive to make me actually carry that out, but chances are I would find it really difficult. "Talk to a mortgage broker before you start looking." I don't need anyone to tell me how much of a mortgage I can afford, but I need to know if the rates I see online are realistic for the kind of property I expect to buy. Banks often don't like to give loans for smaller coops, so despite my excellent credit, I might not get the best rate. "Don't count your chickens before they're hatched." My calculations are also based on my getting a raise of about 4% when I have my annual review this month. "Outdoor space is never worth the premium you pay for it." The deck is almost as big as the apartment itself. Do I really need a deck that I'll only be able to use 6 months of the year? Do I want to spend money on outdoor furniture, a barbeque, and plants? Do I really want to have to worry about gardening, given that I can barely keep my one aloe plant alive now? "Don't let emotions sway your judgment." & "Don't let the seller's furniture and decor sway your judgment." Although I was absolutely methodical about going through a whole list of questions, and spent a lot of time wandering around the apartment, checking, measuring, locating power outlets and generally collecting data in a cool-headed, rational way, I couldn't help noticing that the seller had the same couch as my beloved, recently-deceased grandmother, as well as a lot of cool artwork and rugs and curtains and plants that made the place look very warm and inviting.
It's just frustrating. I am trying to be smart and do the right thing, and it's not that this apartment is beyond the reach of my wildest dreams. I can dream a lot more wildly than a tiny studio with a deck! But even a modest apartment full of compromises seems always to lie just a little beyond the reach of a person with my income and lifestyle. It's not that I can't have this apartment if I want it. I could bid full price tomorrow, and even a little more if I had to. But then I would save nothing, and have no money left for any of the little pleasures that make life interesting.
I'll try to look at some more apartments soon, and talk to a mortgage broker. And I will work out how much I could possibly pay and make a lowball offer on this place. And then I will probably look up at the deck whenever I walk down that block, and wonder if whoever bought it was good with plants.

9 comments:

Yang said...

I love your blog, keep it up!

I think that the right apartment is like the right man - when it/he comes along, you just know! As lovely as this place sounds, you definitely have some very valid hesitations about it. There are surely more suitable fish in the sea.

Anonymous said...

I disagree with your rule about outdoor space never being worth the premium. It depends on how much you would use it of course. But there's the simple practical advantage of having an apartment that is, essentially, twice as big for half the year. And while you need to be honest about how much you'd actually use it, it's hard to put a price or percentage figure on being able to step into open air at will.

Also: You can get a 22" Weber kettle grill for less than $100 and never need another again, resin adirondack chairs are pretty cheap, and there are great online catalogs for growing plants from (relatively cheap) starters or even seeds.

Good luck!

savvy saver said...

Outdoor space is wonderful to have! We live on our deck and porches in the summers. The previous commenter is correct, you can buy an inexpensive charcoal grill (much better taste than gas), and some resin furniture and it will be homey and nice. Spending a lot of money on deck furniture is a waste unless you plan to store it indoors in the winter (which it sounds like you would be very short on space). We bought our dining room table and chairs for the porch at a garage sale for $25, and our patio table and chairs for $25 as well.

That being said... don't get an apartment with small closets and a shortage of cabinet space. You will be kicking yourself later. Also, renting for $1000 less per month sounds like the cash-flow smart option.

whew!

nyc said...

bidding on an apartment in nyc is nightmare. you will get into a bidding war, i don't think i've met anyone that has bought recently that didn't pay asking price or above. best of luck.

Steven Burda said...

Good point.

-Steven Burda
www.linkedin.com/in/burda

Mortgage said...

nice info

3 Things About Money said...

You know, you will just never know what might have been however you decide. This weekend, pick out 10 places having open houses and go look...and while you are having a weekend of reflection, reflect on future values with limited closet/cabinet space. But in my mind, in a city apartment, that private deck is gold. Don't underestimate it. Probably what will happen is you will responsibly lowball your bid, you'll lose it, you'll grieve and you'll move on. But you never know, magic happens sometimes. Follow your heart.

3 Things About Money said...

Jeez, did I *notice* that this was a 2005 entry (sound of hand slapping forehead). I am such a cadet sometimes. Now I have to read the archives to find out what happened.

Levanah said...

Wow, NYC is expensive. I can't imagine paying $1800 a month to live in one room.

That's a lotta cash!