It looks like we're getting serious about this house hunting business. On Thursday morning my wife and I will be meeting with a realtor to seriously begin our search for a new house. No, we haven't made the final decision to buy, but we are certainly taking some concrete steps.
Over the past week I have been reading my real estate books, I have been soliciting advice from friends and seeking recommendations for Realtors, my wife and I even sat down together and put down in writing our perfect house profile which we intend to give to the realtor we choose. We are even getting ready to get pre-approved for a mortgage...
In my gut I feel a combination of excitement and fear. If we go through with this, it will be the largest deal and largest financial commitment that we are ever likely to make. At work, I negotiate multi-million dollar deals a few times a year without a tinge of nervousness, but this is the first time I will be working on a 6 or 7 figure deal with our own money.
You see, as a renter, my financial concerns are an order of magnitude smaller than they would be when we own a house. If we lose our jobs, we can always pack-up or sell our stuff, take the kids and go hiking in India for a year or two. No big deal. We can bring our monthly burn rate down to a crawl. We also have a considerable cushion of savings which we have built up over the years. This cushion should be sufficient to take us through any but the most disastrous of economic scenarios without serious hardship.
When buying a house, the equation will change. Most of the money that we have saved will be used for our down payment (we will absolutely retain an emergency fund equal to 6 months of living expenses, in cash). The house, while a very valuable asset, is a non-liquid asset and unlocking its value is very dependent on the vagaries of the housing market. Home equity line of credit? Ask the folks who lost their credit lines when the sub-prime crisis developed into a full blown melt-down. Nope. Cash is always king, and it looks like we may be about to abdicate... :-)
On the other hand, what excitement! In our late thirties, we have never owned our own house. I love the idea of having a place to call our own. How awesome would that be? It's been a while since I have been that excited about anything.
Fear and excitement in Silicon Valley. They should make a movie.
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