Buying a house next year. Wife wants a big house. Thoughts?

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Bacchus01
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Re: Buying a house next year. Wife wants a big house. Thoughts?

Post by Bacchus01 » Fri Apr 12, 2019 5:37 am

We bought a 5,400 sq ft house in 2010 for around ~$500K. We had three kids at the time ages 8, 5 and 2. Our household income was about what yours is but we had very low childcare expenses. We valued diversity and had our kids in a community program that was like $400-$600/month for the two younger ones before school started full time. Taxes for us are closer to 2%.

We don’t regret it at all. You will grow to find rooms you either ignore completely or even hate (like the dining room we’ve never eaten in) and you will have more furniture, maintenance, heating, upkeep expense. But, it’s been worth it and we’d do it again.

Careers and lives change to. If you are like us, you’ll move again. Our oldest will be going to university in the fall and the downsizing starts. We may build a house in 2020 but we are contemplating putting that off because we know we’ll make it too big considering the kids are on the downward slope of leaving the nest (17, 13 and 10). If we do in 2020, it will be $1M+ and probably at least 4000 sq ft.

Best of luck.

retired recently
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Re: Buying a house next year. Wife wants a big house. Thoughts?

Post by retired recently » Fri Apr 12, 2019 6:32 am

We bought a 4400 sq ft home and have been dreaming of downsizing for a few years. It is too much space for us and we are looking to update it and sell soon now that son will be leaving. It was too much when kids were here but it was easier to stay than sell and relocate.

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Re: Buying a house next year. Wife wants a big house. Thoughts?

Post by fanmail » Fri Apr 12, 2019 6:44 am

Really surprised by the overwhelming number of people not only saying they don’t need that much space but that it would make them house poor. They could probably afford a 1MM house so 5-600k is not going to make them house poor or mess up their retirement. They also have a growing family and have people over frequently. A big house in a great school district that is affordable makes sense here.

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JohnQ
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Re: Buying a house next year. Wife wants a big house. Thoughts?

Post by JohnQ » Fri Apr 12, 2019 8:15 am

Leemiller wrote:
Thu Apr 11, 2019 9:22 pm
I’m confused, do you have 160k or so equity in your current house in addition to the 100k downpayment? That should really change the numbers. But one conversation might be around going smaller to get a 15 year mortgage.
The thinking is to put the equity from the current house into an investment account. This will serve as our cushion while forcing us to pay for the mortgage. Over the course of 20-30 years we’ll come out ahead as market return is likely to be over 4%.

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Re: Buying a house next year. Wife wants a big house. Thoughts?

Post by J295 » Fri Apr 12, 2019 8:18 am

Nearly all of my life decisions are what’s in the best interest of my family. Can’t tell you which house is in the best interest of your family, but that’s my guiding principle

pindevil
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Re: Buying a house next year. Wife wants a big house. Thoughts?

Post by pindevil » Fri Apr 12, 2019 8:25 am

Just another data point. Our large home costs $240/mo to have some one else clean every two weeks.

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Re: Buying a house next year. Wife wants a big house. Thoughts?

Post by Nowizard » Fri Apr 12, 2019 8:26 am

There are those who would be amazed that you could purchase a house this large at the prices you mention. As a result of living in a HCOL area, many will be used to smaller spaces and recommend that while acknowledging you can afford the house. Living in a LCOL area myself, I would suggest you focus on the price you want to pay and obtain a house with as good quality and as many bells and whistles as that price allows. If you and your wife are in sync on pricing, let her drive many of the decisions while making your boundaries clear on issues such as cleaning, yardwork, etc. that may be greater with a larger house. If differing on pricing, have a discussion. We have always lived in a larger house than we "need," and are now downsizing to a house that is still quite large. Since pricing is well within our ability to afford, she primarily determined the choice...…………………...even though our children feel we should have considered a smaller house!

Tim

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Re: Buying a house next year. Wife wants a big house. Thoughts?

Post by chevca » Fri Apr 12, 2019 8:33 am

pindevil wrote:
Fri Apr 12, 2019 8:25 am
Just another data point. Our large home costs $240/mo to have some one else clean every two weeks.
No, it doesn't. That's a choice you make to have that "cost".

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Re: Buying a house next year. Wife wants a big house. Thoughts?

Post by Sandtrap » Fri Apr 12, 2019 8:41 am

1 What wife wants. (long long term payoff is huge)
2 Almost what wife wants (YMMV)
3 What you want (hmmmmm :shock: )

30-40 years from now, the added costs will matter very little compared to the long term benefits that cannot be computed on a spreadsheet.
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Re: Buying a house next year. Wife wants a big house. Thoughts?

Post by BanquetBeer » Fri Apr 12, 2019 8:44 am

I would say if the main difference is SQ ft that you should really evaluate what that extra space will be used for and how frequently it will be used. Do you need a guest room if you have visitors once a year? Surly they can make do on a couch or kids room. If you have visitors once a month, maybe worthwhile.

I will add in that with large price differences you tend to get nicer things (countertops, floors, cabinets, showers) and newer things (insulation, electrical and plumbing). If you buy a $300k house and then your wife wants to redo the kitchen and floors ($75k) and then you need to do some plumbing/HVAC upgrades ($20k) you can quickly approach the cost of that more expensive house with a lot of work and less resale value.

We will be in a similar situation in ~4 years once the second kid goes to school but plan on moving from 1.25x to 2.2x house:gross income although we have about a 50% savings rate and after 5 more years will be fine with living a bit more for the now vs later.

I think the heating/cooling/etc costs are a bit overblown if you accept reasonable temperatures. If you play the 3 month contract game you can get electrical <8 cents/kwh so a summer 2500kwh month costs you ~$200 Winter gas is going to be <$100/mo (assuming you keep your house ~74summer / 68 winter vs some people 68/70) - consider your current utility bills.

Lastly, consider where you want to allocate money. Do you enjoy your home? Do you enjoy going out or travel? Consciously put your (spending) money where you get the most enjoyment.

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Re: Buying a house next year. Wife wants a big house. Thoughts?

Post by HornedToad » Fri Apr 12, 2019 8:45 am

covertfantom wrote:
Thu Apr 11, 2019 4:38 pm
You can afford it... and a happy wife is a happy life. I know looking at a house as an investment is generally frowned upon here... but you can definitely try using your house to diversify your portfolio a bit.
This. It’s easily affordable so the discussion is not strictly finances but trade off of this vs other things. I think her ask is semi-reasonable especially with day care going away.

Many people don’t get personal satisfaction from pure savings or saying I can retire a year or two earlier so the focus should be more life impact that you are happy with. Smaller new house and fancier vacations/car/part time work etc or higher new house.

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Re: Buying a house next year. Wife wants a big house. Thoughts?

Post by cusetownusa » Fri Apr 12, 2019 8:54 am

cherijoh wrote:
Thu Apr 11, 2019 11:01 pm
cusetownusa wrote:
Thu Apr 11, 2019 5:31 pm
GT99 wrote:
Thu Apr 11, 2019 3:47 pm
JohnQ wrote:
Thu Apr 11, 2019 1:52 pm
...We live in a state with property tax of 3-3.5% property tax...

I worked out the number for a 4%/30-year loan on a 400K loan (500K house with 100K down payment) would be ~3,600 (principal, interest, ins, property tax). I want make sure the wife is happy but this is too much of a mortgage to take on?
Would you truly have to pay $15,000-$17,500 a year in property taxes on a $500k home? Surely that can't be right? Can I ask what state you're in?
We have a $544k mortgage, and our PITI is $3503/month at 4.125%.
I pay $11,000 on a $300,000 house. A $500k house around me would easily be that amount.
Yikes! I think my house is worth somewhere between $250 and $275K and my property tax last year was $2700. Of course NC has a relatively high state income tax and a high sales tax.
Yikes is right...although, I am also in a high income tax and sales tax state. I get the worse of both.

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Re: Buying a house next year. Wife wants a big house. Thoughts?

Post by tamudude » Fri Apr 12, 2019 9:36 am

You have said in a later post that you are based out of Texas. Being a former resident of a master planned community in a suburb of a major Texas city, I can give you the following feedback (we moved from a 2150 sq ft single storey home @206k to a 3300 sq ft two storey home @450k):
1. A bigger house means better amenities- we got nice arches, art niches, mirrors, granite countertops, glass shower stalls, top of the line A/Cs, appliances etc.
2. We got a better quality of life - I got a separate study, wife got a nice secret room (behind a swing open bookcase) that she converted to a hobby sewing machine room, we got a dedicated media room, a large game room for the kids and an extra bedroom. We also got a 2.5 car garage over a smallish 2 car garage.
3. A big factor in Texas - land. The land parcel that our new house sat on was huge and we got a large backyard for the 2 kids to play in. It was a lot easier to host larger friend groups, rent water inflatables and whatnot. You could also consider a pool.
4. A higher end community also comes with better local amenities - we had a large community pool, top class public and private schools nearby. the higher property tax is worth it.

The financials are doable (we did it on $160k+bonus+stocks single income with my wife a SAHM so no daycare costs).
I recommend that you look at all the facets and not only the cost to make your decision. Now that being said, ofcourse cost should be one of the biggest factors in the discussions with your wife. Our previous home was paid off before we bought the new house. That made our decision easier.

Good luck!!!

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Re: Buying a house next year. Wife wants a big house. Thoughts?

Post by shell921 » Fri Apr 12, 2019 9:47 am

sschoe2 wrote:
Thu Apr 11, 2019 3:05 pm
More house is more cleaning, more maintenance, more utilities, more taxes, often longer time to sell. I believe in minimizing housing as costs balloon quickly the bigger you get.
I agree with this !!! My house is 4,000 sq feet and there is a lot of cleaning and upkeep I have to do/arrange for to maintain it.
I think 50 years ago the average house size was about 1400 sq ft.

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Re: Buying a house next year. Wife wants a big house. Thoughts?

Post by RickBoglehead » Fri Apr 12, 2019 10:03 am

As others have noted, you can afford it.

Our first house was what I would call average. Our 2nd and 3rd houses (currently in the 3rd) are large, close to 4,000 square feet. We both love the space. We also like decent lot sizes. For us that has meant 2 acres or more. I would never buy a large house on a 1/4 or 1/3rd of an acre, but that's me.

However, after the kids moved out, it's space we don't need. And too much yard. And, we don't love the property taxes. As such, we'll likely be selling it in 2 years when we retire. We'll buy something probably around 2,000 - 2,500 square feet, and ideally a treed lot with a small grass area, on a lake.

As to how leveraged you'll be, we were highly leveraged when we bought our homes. Many on this forum wouldn't do that - but I knew my income was going up, which it did as expected. So it became less and less of an issue as time went on.
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Re: Buying a house next year. Wife wants a big house. Thoughts?

Post by goblue100 » Fri Apr 12, 2019 10:06 am

sschoe2 wrote:
Thu Apr 11, 2019 3:05 pm
More house is more cleaning, more maintenance, more utilities, more taxes, often longer time to sell. I believe in minimizing housing as costs balloon quickly the bigger you get.
I agree. While I'm not saying you should stay in a 1700sf starter home, keeping the size down as low as possible while keeping your wife and yourself happy is the smartest choice. And speaking from experience, the bigger house needs more furniture, more drapes, more blinds. And the bigger the space, the more junk accumulates.
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Re: Buying a house next year. Wife wants a big house. Thoughts?

Post by Valuethinker » Fri Apr 12, 2019 10:16 am

It almost defies belief what is considered to be a normal house.

I grew up in 1800 square feet (+ unfinished basement) -- family of 4. We certainly were not deprived. I live in 1550 square feet now (2 people, no basement) - that is plenty of space.

My father interestingly grew up in 8+ bedroom houses - ancient Victorians. He swore he would never live in one again, far too much cleaning and repair to do - his parents were house poor.

My friends in North America live in c. 2500 square feet homes (families of 3/4). Again they don't feel crowded or deprived.

Basements are not typically included in those numbers, so if one is including basement, that would add another one quarter to one third of usable space, say.

Doesn't having more space than that just encourage one to accumulate junk? Let alone the cost of heating & cooling it?
Last edited by Valuethinker on Fri Apr 12, 2019 10:18 am, edited 1 time in total.

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Re: Buying a house next year. Wife wants a big house. Thoughts?

Post by Valuethinker » Fri Apr 12, 2019 10:17 am

goblue100 wrote:
Fri Apr 12, 2019 10:06 am
sschoe2 wrote:
Thu Apr 11, 2019 3:05 pm
More house is more cleaning, more maintenance, more utilities, more taxes, often longer time to sell. I believe in minimizing housing as costs balloon quickly the bigger you get.
I agree. While I'm not saying you should stay in a 1700sf starter home, keeping the size down as low as possible while keeping your wife and yourself happy is the smartest choice. And speaking from experience, the bigger house needs more furniture, more drapes, more blinds. And the bigger the space, the more junk accumulates.
And it costs more to heat and cool. And there's more to maintain & repair. Somebody has to vacuum all those rooms, etc.

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Re: Buying a house next year. Wife wants a big house. Thoughts?

Post by Valuethinker » Fri Apr 12, 2019 10:19 am

Just a note from the psychological research.

Turns out ceiling height is a big factor. The lower the ceiling, the more pokey the room feels. You can shrink the square footage of a room if you can raise the ceiling without making it feel cramped.

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Re: Buying a house next year. Wife wants a big house. Thoughts?

Post by Luke Duke » Fri Apr 12, 2019 10:26 am

Quickfoot wrote:
Thu Apr 11, 2019 2:09 pm
Unless your taxes are very high your payment is probably a little high. We pay $2,600 a month for a 411K loan on a 450K house with 4% interest.

Just went through this, we wound up getting the larger house but with a very clear understanding on her part that the larger house results in sacrifices in other areas of our lifestyle.

Sounds like yes you can afford it but that isn't the issue, the main issue is you want different things. How important of an issue is this to each of you? I'd encourage you to look for a compromise between what you want and what she wants. Buying a house is not a situation where you want either of you feeling like you "lost." Once spouse being angry every time they wake-up about the house is not healthy for a relationship.

If the size of the house is the most important factor for her maybe you can move to a cheaper community, or a bit longer commute to get the price point you want. Maybe she's willing to not get a new car for a longer period of time to help offset the expense of the larger house, etc.

One thing that can help is preparing a comprehensive financial picture of both scenarios including disposable income, retirement savings, even how it might affect retirement age. This allows her to decide if the large house is still worth it with all the information.

Either one of you "winning" this discussion can result in very large losses later.
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Re: Buying a house next year. Wife wants a big house. Thoughts?

Post by michaeljc70 » Fri Apr 12, 2019 10:28 am

As pointed out, both homes are well above the average sized home. You most likely will be getting rooms much larger than you need or superfluous rooms you don't need in the larger home (I had a living room and two family rooms in my last house-silly). I would try to find a home on the lower side price wise that can tick off as many as your wife's needs/wants as possible. Keep in mind since you are spending ~$100k less you may be able to tick off some of those on the cheaper house through future home improvements. Also, layout is very important. Sometimes a 2500 sq ft home is much more practical than a 3000 sq ft home due to the layout.

As others have pointed out, the ongoing costs will be higher for the bigger houses. Cleaning, furnishing, maintenance, etc. My uncle is currently building a house with 5 furnaces and 5 a/c units and this is for 2 people :oops:
Last edited by michaeljc70 on Fri Apr 12, 2019 10:29 am, edited 1 time in total.

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Re: Buying a house next year. Wife wants a big house. Thoughts?

Post by Luke Duke » Fri Apr 12, 2019 10:29 am

Thegame14 wrote:
Thu Apr 11, 2019 2:15 pm
so your income is around $225K without stocks and mortgage would be $400K so less than 2X income. You can certainly afford it and should do it to make wife happy, and who is to say you may not need a bigger house, still time for another kid......
If the given price range is $500-600K. I would expect his wife to find a house that she likes which costs $700K.

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Re: Buying a house next year. Wife wants a big house. Thoughts?

Post by cheezit » Fri Apr 12, 2019 10:30 am

Valuethinker wrote:
Fri Apr 12, 2019 10:16 am
It almost defies belief what is considered to be a normal house.

I grew up in 1800 square feet (+ unfinished basement) -- family of 4. We certainly were not deprived. I live in 1550 square feet now (2 people, no basement) - that is plenty of space.

My father interestingly grew up in 8+ bedroom houses - ancient Victorians. He swore he would never live in one again, far too much cleaning and repair to do - his parents were house poor.

My friends in North America live in c. 2500 square feet homes (families of 3/4). Again they don't feel crowded or deprived.

Basements are not typically included in those numbers, so if one is including basement, that would add another one quarter to one third of usable space, say.

Doesn't having more space than that just encourage one to accumulate junk? Let alone the cost of heating & cooling it?
My family lives in a ~1100 square foot nominally-2-bedroom house:

* My wife and I converted the living room to a combined master bedroom and playroom
* our two older boys have a bunk bed in one of the two rooms upstairs
* our youngest is in a crib in the other room upstairs
* we cook in the kitchen, eat in the dining room (we also have a couch there), and use the tiny "front room" as a sort-of office and sort of guest room; we our youngest's crib there before he was old enough for his own room
* I use the unfinished basement for storage and a workshop. I'm looking at building a storage shed in the backyard if the landlord is OK with it.

We don't feel cramped at all, though we will need to upsize if/when we have more children. Also, a garage would be nice.

My sister, on the other hand, lives with her fiancee in a ~3500 square foot 5BR upstate. It fits their budget and lets them have guests (like us!) over as much as they like.

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Re: Buying a house next year. Wife wants a big house. Thoughts?

Post by cherijoh » Fri Apr 12, 2019 11:26 am

cusetownusa wrote:
Fri Apr 12, 2019 8:54 am
cherijoh wrote:
Thu Apr 11, 2019 11:01 pm
cusetownusa wrote:
Thu Apr 11, 2019 5:31 pm
GT99 wrote:
Thu Apr 11, 2019 3:47 pm
JohnQ wrote:
Thu Apr 11, 2019 1:52 pm
...We live in a state with property tax of 3-3.5% property tax...

I worked out the number for a 4%/30-year loan on a 400K loan (500K house with 100K down payment) would be ~3,600 (principal, interest, ins, property tax). I want make sure the wife is happy but this is too much of a mortgage to take on?
Would you truly have to pay $15,000-$17,500 a year in property taxes on a $500k home? Surely that can't be right? Can I ask what state you're in?
We have a $544k mortgage, and our PITI is $3503/month at 4.125%.
I pay $11,000 on a $300,000 house. A $500k house around me would easily be that amount.
Yikes! I think my house is worth somewhere between $250 and $275K and my property tax last year was $2700. Of course NC has a relatively high state income tax and a high sales tax.
Yikes is right...although, I am also in a high income tax and sales tax state. I get the worse of both.
Which state?

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Re: Buying a house next year. Wife wants a big house. Thoughts?

Post by JohnQ » Fri Apr 12, 2019 12:05 pm

J295 wrote:
Fri Apr 12, 2019 8:18 am
Nearly all of my life decisions are what’s in the best interest of my family. Can’t tell you which house is in the best interest of your family, but that’s my guiding principle
That's a great advice. Thank you

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Re: Buying a house next year. Wife wants a big house. Thoughts?

Post by jharkin » Fri Apr 12, 2019 12:20 pm

Valuethinker wrote:
Fri Apr 12, 2019 10:16 am
ancient Victorians.
I also get a chuckle that a Victorian is "ancient" My house was a century old already when the average Queen Anne / Second Empire/ Tudor Revival house was built.

I do have to say I love how much of the market wont buy anything not new. Leaves a lot of deals on older homes for me :sharebeer

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Re: Buying a house next year. Wife wants a big house. Thoughts?

Post by cusetownusa » Fri Apr 12, 2019 12:39 pm

cherijoh wrote:
Fri Apr 12, 2019 11:26 am
cusetownusa wrote:
Fri Apr 12, 2019 8:54 am
cherijoh wrote:
Thu Apr 11, 2019 11:01 pm
cusetownusa wrote:
Thu Apr 11, 2019 5:31 pm
GT99 wrote:
Thu Apr 11, 2019 3:47 pm


Would you truly have to pay $15,000-$17,500 a year in property taxes on a $500k home? Surely that can't be right? Can I ask what state you're in?
We have a $544k mortgage, and our PITI is $3503/month at 4.125%.
I pay $11,000 on a $300,000 house. A $500k house around me would easily be that amount.
Yikes! I think my house is worth somewhere between $250 and $275K and my property tax last year was $2700. Of course NC has a relatively high state income tax and a high sales tax.
Yikes is right...although, I am also in a high income tax and sales tax state. I get the worse of both.
Which state?
NY

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greg24
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Re: Buying a house next year. Wife wants a big house. Thoughts?

Post by greg24 » Fri Apr 12, 2019 12:41 pm

In reading these threads, I'm always surprised at how often some people plan on changing houses. If you buy a giant house now, that is just setting up a downsizing when the kids go to college. There are large transaction costs to buying and selling houses.

We have a 2200 sf house that we bought before the kids were born, and will probably grow old in.

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8foot7
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Re: Buying a house next year. Wife wants a big house. Thoughts?

Post by 8foot7 » Fri Apr 12, 2019 12:46 pm

I would set your upper limit at 500k, put 100k down, and enjoy your life. 500k is a nice house with plenty of space anywhere except a HCOL area.

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Re: Buying a house next year. Wife wants a big house. Thoughts?

Post by Calico » Fri Apr 12, 2019 12:52 pm

mhadden1 wrote:
Thu Apr 11, 2019 3:23 pm
You and your family will live in about 800 sf. The rest of the large house will gather dust and junk, barring extraordinary efforts to clean and declutter. Don't ask me how I know. :(
I was going to say something similar. My first thought with a big house is, "it's more to clean."

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Re: Buying a house next year. Wife wants a big house. Thoughts?

Post by Calico » Fri Apr 12, 2019 12:53 pm

Calico wrote:
Fri Apr 12, 2019 12:52 pm
mhadden1 wrote:
Thu Apr 11, 2019 3:23 pm
You and your family will live in about 800 sf. The rest of the large house will gather dust and junk, barring extraordinary efforts to clean and declutter. Don't ask me how I know. :(
I was going to say something similar. My first thought with a big house (aside from costing more money all around) is, "it's more to clean."

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Re: Buying a house next year. Wife wants a big house. Thoughts?

Post by Bacchus01 » Fri Apr 12, 2019 12:59 pm

greg24 wrote:
Fri Apr 12, 2019 12:41 pm
In reading these threads, I'm always surprised at how often some people plan on changing houses. If you buy a giant house now, that is just setting up a downsizing when the kids go to college. There are large transaction costs to buying and selling houses.

We have a 2200 sf house that we bought before the kids were born, and will probably grow old in.
Large is relative

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Re: Buying a house next year. Wife wants a big house. Thoughts?

Post by SrGrumpy » Fri Apr 12, 2019 1:17 pm

The nature of the BH demo means the responses will skew "smaller." And if the bigger option involves a vaulted ceiling in a soulless foyer, then you probably should put your foot down. Whatever you do, go for a quality job (and good neighbors).

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Re: Buying a house next year. Wife wants a big house. Thoughts?

Post by 2pedals » Fri Apr 12, 2019 1:40 pm

SrGrumpy wrote:
Fri Apr 12, 2019 1:17 pm
The nature of the BH demo means the responses will skew "smaller." And if the bigger option involves a vaulted ceiling in a soulless foyer, then you probably should put your foot down. Whatever you do, go for a quality job (and good neighbors).
Don't ever ever ignore your significant other -- whatever you do.

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Re: Buying a house next year. Wife wants a big house. Thoughts?

Post by shans2000 » Fri Apr 12, 2019 1:53 pm

Happy wife = Happy Life!

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Re: Buying a house next year. Wife wants a big house. Thoughts?

Post by SrGrumpy » Fri Apr 12, 2019 2:04 pm

shans2000 wrote:
Fri Apr 12, 2019 1:53 pm
Happy wife = Happy Life!
Man cave + she shed = Happy Life!

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Re: Buying a house next year. Wife wants a big house. Thoughts?

Post by srt7 » Fri Apr 12, 2019 2:12 pm

My recommendation is to get the "small" house because
- 3.5% in property taxes? And I thought 2.5% was high in Austin
- less furnishing costs
- at 3000+ sqft you can easily grow if you plan on having another kid or parents move in etc.
- those heating and cooling bills man
...

To sum it all up, what is it that you can do with a 4000 sqft house that you cannot do with a 3000 sqft house?
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Re: Buying a house next year. Wife wants a big house. Thoughts?

Post by stoptothink » Fri Apr 12, 2019 2:28 pm

srt7 wrote:
Fri Apr 12, 2019 2:12 pm
My recommendation is to get the "small" house because
- 3.5% in property taxes? And I thought 2.5% was high in Austin
I think many of the posts supporting buying the more expensive house are glossing over this. Texas property taxes make this a lot less comfortable financially than it appears on the surface.

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Re: Buying a house next year. Wife wants a big house. Thoughts?

Post by sergeant » Fri Apr 12, 2019 2:40 pm

fanmail wrote:
Fri Apr 12, 2019 6:44 am
Really surprised by the overwhelming number of people not only saying they don’t need that much space but that it would make them house poor. They could probably afford a 1MM house so 5-600k is not going to make them house poor or mess up their retirement. They also have a growing family and have people over frequently. A big house in a great school district that is affordable makes sense here.
Their property taxes on a million dollar home would be $35,000 a year. I think they would be making a mistake buying your recommended million dollar Mcmansion. I think they can afford the 500k home.

OP, is this Lakeway or Rough Hollow? I looked there but high taxes scared me off. I'm staying in California where my property taxes are reasonable. I pay $3500 a year on a home valued at 800k.
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Re: Buying a house next year. Wife wants a big house. Thoughts?

Post by Valuethinker » Fri Apr 12, 2019 4:08 pm

jharkin wrote:
Fri Apr 12, 2019 12:20 pm
Valuethinker wrote:
Fri Apr 12, 2019 10:16 am
ancient Victorians.
I also get a chuckle that a Victorian is "ancient" My house was a century old already when the average Queen Anne / Second Empire/ Tudor Revival house was built.

I do have to say I love how much of the market wont buy anything not new. Leaves a lot of deals on older homes for me :sharebeer
I'd have to look up your references as to dates of housing architecture

Queen Anne was 1703 to 1714? We would call that a Jacobean house I think. 1715 to 1831 is Georgian. Then you get Regency (I actually lived in one. 1838).

Pre 1601 is Elizabethan. They are pretty rare. Before Tudor (1485) us genuine medieval.

Then Victorian to 1900. Then Edwardian to 1914.

"Mock Tudor" was a style popular in the 1920s and 30s.

Many early Victorian homes had built on to earlier Georgian or even earlier homes. Thinking of my father's family some of those houses must have been very old.

We lost a lot of our old housing to air raids in WW2 or slum clearance thereafter.

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Re: Buying a house next year. Wife wants a big house. Thoughts?

Post by JBTX » Fri Apr 12, 2019 4:24 pm

sschoe2 wrote:
Thu Apr 11, 2019 3:05 pm
More house is more cleaning, more maintenance, more utilities, more taxes, often longer time to sell. I believe in minimizing housing as costs balloon quickly the bigger you get.
Plus a bigger house will need more stuff to fill it up. Unlike the house the stuff doesn't not retain its value.

I have idea why somebody thinks they need a 4000+ Sq ft house.

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Re: Buying a house next year. Wife wants a big house. Thoughts?

Post by Bacchus01 » Fri Apr 12, 2019 5:21 pm

JBTX wrote:
Fri Apr 12, 2019 4:24 pm
sschoe2 wrote:
Thu Apr 11, 2019 3:05 pm
More house is more cleaning, more maintenance, more utilities, more taxes, often longer time to sell. I believe in minimizing housing as costs balloon quickly the bigger you get.
Plus a bigger house will need more stuff to fill it up. Unlike the house the stuff doesn't not retain its value.

I have idea why somebody thinks they need a 4000+ Sq ft house.
Because they want to and because they can.

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Re: Buying a house next year. Wife wants a big house. Thoughts?

Post by Starfish » Fri Apr 12, 2019 7:18 pm

majiaknight wrote:
Thu Apr 11, 2019 10:24 pm
The math shows that the bigger house (e.g. $500K vs. $400K) costs you roughly $674/m more plus extra ~$100/m? on insurance and maintenance. If the bigger house is your wife's dream house and she plans to stay in for 10-20 years, I'd say it's an easy decision and your income could afford it.

Diff in Property tax: $100K*3.5%/12 =$292/m
Diff in Mortgage (20% down, 30Y Fixed @4%): $1910 ($400K) - $1528 ($320K) = $382/m
Plus difference in cooling, heating, cleaning, maintenance, furniture etc.
I would say 1000$/month. It is a lot of money when your disposable income is 2k.

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Re: Buying a house next year. Wife wants a big house. Thoughts?

Post by bayview » Fri Apr 12, 2019 8:48 pm

A huge concern for me would be that as the kids grew older, private school would feel “necessary” (due to popularity of zoned school, classes are overcrowded; perceived inferiority to nearby private schools; plain old “keeping up with the Joneses”; change in demographics of other neighborhoods zoned to the schools.)

This is a very real thing, and pretty much negates the perceived value of moving to a good school district.

I’d much rather have lower expenses (and real estate taxes) and a lot more emergency savings and investments. Perhaps the slightly smaller house now, and when your children are approaching middle or high school, move up then, if it still feels right.
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Re: Buying a house next year. Wife wants a big house. Thoughts?

Post by JBTX » Fri Apr 12, 2019 9:16 pm

Bacchus01 wrote:
Fri Apr 12, 2019 5:21 pm
JBTX wrote:
Fri Apr 12, 2019 4:24 pm
sschoe2 wrote:
Thu Apr 11, 2019 3:05 pm
More house is more cleaning, more maintenance, more utilities, more taxes, often longer time to sell. I believe in minimizing housing as costs balloon quickly the bigger you get.
Plus a bigger house will need more stuff to fill it up. Unlike the house the stuff doesn't not retain its value.

I have idea why somebody thinks they need a 4000+ Sq ft house.
Because they want to and because they can.
Well if it were that simple he wouldn't be starting this thread.

He better be certain he won't lose his job or then they will have to start liquidating investments. Best I can tell they are expending their entire amount of liquid cash and equivalents on this house down payment and I don't know where the money will come to fund inevitable desire to fill it up with nice stuff. Why buy a 4000 Sq ft house if you are going to put crap in it?

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Re: Buying a house next year. Wife wants a big house. Thoughts?

Post by Bacchus01 » Sat Apr 13, 2019 6:27 am

JBTX wrote:
Fri Apr 12, 2019 9:16 pm
Bacchus01 wrote:
Fri Apr 12, 2019 5:21 pm
JBTX wrote:
Fri Apr 12, 2019 4:24 pm
sschoe2 wrote:
Thu Apr 11, 2019 3:05 pm
More house is more cleaning, more maintenance, more utilities, more taxes, often longer time to sell. I believe in minimizing housing as costs balloon quickly the bigger you get.
Plus a bigger house will need more stuff to fill it up. Unlike the house the stuff doesn't not retain its value.

I have idea why somebody thinks they need a 4000+ Sq ft house.
Because they want to and because they can.
Well if it were that simple he wouldn't be starting this thread.

He better be certain he won't lose his job or then they will have to start liquidating investments. Best I can tell they are expending their entire amount of liquid cash and equivalents on this house down payment and I don't know where the money will come to fund inevitable desire to fill it up with nice stuff. Why buy a 4000 Sq ft house if you are going to put crap in it?
I wasn’t talking about the OP. I was talking in general.

Of course, my perspective is someone coming from a 5,400 sq ft house. I don’t think 4,000 sq ft is that big. I actually think 3,500 sq ft is about right for a family of 5.

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Re: Buying a house next year. Wife wants a big house. Thoughts?

Post by Vaporvalley » Sat Apr 13, 2019 6:48 am

Just tell her that large houses are going out of style. You heard on HGTV that smaller houses are the new desirable thing. "Those big ugly McMansions are so 2004."

You need to rewire the thought process. Get her reading FIRE blogs. She will want a tiny house in no time.

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Re: Buying a house next year. Wife wants a big house. Thoughts?

Post by Dottie57 » Sat Apr 13, 2019 9:02 am

Valuethinker wrote:
Fri Apr 12, 2019 10:16 am
It almost defies belief what is considered to be a normal house.

I grew up in 1800 square feet (+ unfinished basement) -- family of 4. We certainly were not deprived. I live in 1550 square feet now (2 people, no basement) - that is plenty of space.

My father interestingly grew up in 8+ bedroom houses - ancient Victorians. He swore he would never live in one again, far too much cleaning and repair to do - his parents were house poor.

My friends in North America live in c. 2500 square feet homes (families of 3/4). Again they don't feel crowded or deprived.

Basements are not typically included in those numbers, so if one is including basement, that would add another one quarter to one third of usable space, say.

Doesn't having more space than that just encourage one to accumulate junk? Let alone the cost of heating & cooling it?
I grew up in a house of 1100 square feet with a basement partially finished for a tv room ( extra 400 sqft). 1 bathroom. Family of 4. Want is often talked of as need.

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Re: Buying a house next year. Wife wants a big house. Thoughts?

Post by Sandtrap » Sat Apr 13, 2019 9:10 am

Dottie57 wrote:
Sat Apr 13, 2019 9:02 am
Valuethinker wrote:
Fri Apr 12, 2019 10:16 am
It almost defies belief what is considered to be a normal house.

I grew up in 1800 square feet (+ unfinished basement) -- family of 4. We certainly were not deprived. I live in 1550 square feet now (2 people, no basement) - that is plenty of space.

My father interestingly grew up in 8+ bedroom houses - ancient Victorians. He swore he would never live in one again, far too much cleaning and repair to do - his parents were house poor.

My friends in North America live in c. 2500 square feet homes (families of 3/4). Again they don't feel crowded or deprived.

Basements are not typically included in those numbers, so if one is including basement, that would add another one quarter to one third of usable space, say.

Doesn't having more space than that just encourage one to accumulate junk? Let alone the cost of heating & cooling it?
I grew up in a house of 1100 square feet with a basement partially finished for a tv room ( extra 400 sqft). 1 bathroom. Family of 4. Want is often talked of as need.
+1
900 sf. cottage. 2bdrm 1 bath. Family of 5 on a farm. And, a whole mountain to play on.
Larger homes were seen on TV.
Did not feel deprived growing up.
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Re: Buying a house next year. Wife wants a big house. Thoughts?

Post by fanmail » Sat Apr 13, 2019 9:58 am

stoptothink wrote:
Fri Apr 12, 2019 2:28 pm
srt7 wrote:
Fri Apr 12, 2019 2:12 pm
My recommendation is to get the "small" house because
- 3.5% in property taxes? And I thought 2.5% was high in Austin
I think many of the posts supporting buying the more expensive house are glossing over this. Texas property taxes make this a lot less comfortable financially than it appears on the surface.
They don’t pay any state tax on over 200k income.

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