patrick.net

It's interesting. People who live on the west coast forgot or don't know how expensive heating big houses is on the east coast, or cooling them for that matter. Yeah, it's hot down there in summer, ugh.
The property taxes are likely high.
I remember a couple summers ago watching a guy write a check for his utility bill for his big house, it was just $1100.

toothfairy says

what is this Shiller Doctrine. very house across the US is supposed to appreciate at the exact same rate

That is what history has shown us. That is the conclusion made by Robert Shiller. Even today in SFBA the Shiller Doctrine has been proven correct.

Guys, all of your concerns about heating and cooling a house this size are valid.

1. If we think of springing for this one (which certainly is not a done deal), the heating will be converted to natural gas. I confirmed with National grid yesterday, that the street already has gas, it just needs to be run to the house, and the necessary modifications to the house systems itself. I estimate $20K for this.

2. Yes, the "look" of the house is a bit 80s. That can be a good thing and a bad thing. Most importantly the ceiling height on the top floors is not 9 ft, it's more like 8.5ft whereever there isn't a cathedral ceiling. That bothers me. I'm big fan of high ceilings. However, the house does have a "charm" to its inside, that is difficult to describe. I guess the word I'm looking for is "homely"?

3. The property is not subdividable and probably will never be.

4. As far as the space goes...well, my wife has always wanted a "studio" to do her stuff in, we plan to have a big home theater (have a relatively small one right now, and the home theater kinda ties into my business), a decent library (between the two of us we have over 4000 books...we read a lot :) ), and she loves closets. So, one of the bedrooms will probably get converted into a closet.

5. As far as "affording" it, I have my own software company that I started a few years ago (and is doing relatively well), and my wife has a relatively high profile finance career. We could easily afford twice the price of this house, with just one income. The point isn't affordability, the point is "value". That's the whole reason, we have been renting for the last few years... :-)

These are random thoughts, not necassarily in any particular order.

All that being said, am I "sold" on this house. No. Do I think the market can fall even more? Absolutely. However...keep in mind (but that's my assessment as such), I do not see interest rates going up anytime in the near future. The US cannot afford it, as the USD will rise if that happens, and that's really really bad from the policy makers' perspective. They won't let it happen.

So, while I completely agree with the perspective of buying when prices are "low" and interest rates are "high", it just aint gonna happen anytime soon. Look at Japan, 20 years and counting, and the interest rates haven't gone up.

So, at some point we'll have to just make the call and buy "something". Whether it's this one or not, remains to be seen, but I can assure you, it's always going to be a relatively big house. I don't even look at houses that are less than 3500 sqft on the top two levels. That's just us.

Sorry, for the ramblings, I'm just trying to give some perspective here.

seaside says

About that particular house, I wonder if you still remember a movie called blair witch project. This is that kinf of area. Actual blair, burkittsvile MD is 15 min driving from the house. :)

You obviously are not familiar with DC area traffic! It would take a half hour even in no traffic.

clambo says

It's interesting. People who live on the west coast forgot or don't know how expensive heating big houses is on the east coast, or cooling them for that matter. Yeah, it's hot down there in summer, ugh.
The property taxes are likely high.
I remember a couple summers ago watching a guy write a check for his utility bill for his big house, it was just $1100.

I know someone in Montgomery County who pays utility bills that I think of as equivalent to rent.

kapone says

the heating will be converted to natural gas. I confirmed with National grid yesterday, that the street already has gas, it just needs to be run to the house, and the necessary modifications to the house systems itself. I estimate $20K for this.

Is the cost for a new furnace included in that 20K figure for natural gas? That's going to be expensive as well. Even more if you have to put in ductwork. Stuff like replacing the water heater and other appliances can be done later as needed (like when the stuff needs to be replaced anyway). I'd be getting estimates. Just make sure that natural gas piping is run for it with appropriate shutoffs, or at least a branch for any future appliances.

Pet peeve, buy my house had no natural gas shutoffs except for the main when it was built, and for some reason nobody bothered to add any over the course of more than 50 years, except for one for the furnace.

I just looked at the posts a little bit again.
"it's not in the worst neighborhood" This doesn't sound like a great endorsement.
Electric heat? You should just pile dollar bills and make bonfires in the living room for heat in winter.
Property taxes, the gift that keeps on giving and will be going UP because you mentioned the neighborhood is not that great.=welfare people lurking and they need social welfare services.
Home theatre, "studio", install gas heat, install furnace. install heat pump and cooling/heating ductwork? Another zillion dollars.
Daycare and wife quits work, a zillion dollars.
Kids enter school and wife won't go back to work after life as a soccer mom: battle royale, which the man loses. Gazillion dollars.
Yeah, this is really looking good to me :)

Stuff a towel in it.

You don't have to insulate or heat the whole house. For the rooms that are not yet used, are never occupied, or are used so briefly they don't require heat - just stuff a towel in the ducting and that heat will go where it is wanted.

I need to move to wherever this house is, if I can get this much house for the $! I would concur on potential hi heating costs (heated swimming pools don't heat themselves for free, unless a solar thing is in place), is the HVAC multi-unit or zoned so you can heat/cool and do so efficiently only in the areas you want to.

By my local standards, I would say "needs updating" in kitchen and bathrooms - don't like that crazy wallpaper in one of the bathrooms - but for other it may work as is.

If you are moving from a substantially smaller place, concur that you will be spending a lot on new furnishings.

Overall, I like it, and your comments show why the strictly monetary rent vs buy calculators can't be used in isolation from other factors.

Sounds to me like you can afford it, you want it, you have cushion money for repairs and improvements, what else is the point of earning money? To squirrel all of it away for a rainy day and meanwhile not enjoy life?

PS - What the heck is a "public septic" and if it has that, why is it also listed as having "public sewer"?

A well built septic system should be problem free. I have not had mine pumped or serviced for over 26 years which included a house full of kids...

OK, but yours is a private septic tank, right? What's a "public septic" as per the listing info.?

kapone says

The point isn't affordability, the point is "value".

Well if you don't find value in your own Happiness, than no price is worth it. You're a prisoner of the times, and you can afford to just thumb your nose and just treck on, and catch it on the upside. Years down the road when you weren't paying attention, and the house grows equity. When it does or if it does. The point is, you have dreams and desires to have your own spaces, and the room to do and have things, you either may or may not have had in your life.

You're not getting any Younger, unless your purchase could jeopardize you in the future and put your happiness at stake. Then you shouldn't even sweat the value, the media and economy puts on the place.

There's phrase that used to pertain to business. "The cost of doing business. "

Now I say, something is "The cost of NOT doing business. " more often than not, I find more value in that price.

You don't have to buy at the TIME the market hits bottom to get the BOTTOM PRICE.
1. Develop a simple, documented, and illustrated argument supporting the "fact" the local housing market will fall X% more in X months.
2. Show them how to this day their asking price has chased the curve down and they will continue to do that.
3. Quote the real problems of people bailing out of escrows because of appraisals and because of buyers not wanting to jump on a sinking ship.
4. Offer the best possible price they could get at the BOTTOM of the market.
5. Help the seller see that the beating you are giving them will be offset by the beating they are going to give the seller of their next home.

Make yourself a valuable buyer:
1. Express open love for the house.
2. Convey a true determination to raise your family there.
3. Demonstrate your grasp on the real estate market and the tools you used to arrive at a fair value for their home.
4. Point out if they keep the house, the problems you have pointed out become their problems and they will all be cash expenditures.

IF the price stalls higher than you want, put money back in your pocket by structuring the purchase to your advantage. Sometimes the price is a number needed to satisfy an agenda you are not aware of.

A few cosmetic deal enhancements:
1. Have them carry a second trust deed that waives X months of payments.
2. Have them pre-pay your taxes, insurance, etc. Up to a year is OK.
3. Reduced real estate fees.
4. Close escrow at a time best for them (over a holiday weekend, after the school year ends, etc).
5. Etc.

(When I bought my current home the seller carried back a $68,000 second. Interest accrued but payments were waived for 18 months followed by 18 months of less than full interest payments (you can't do that now with conventional financing). When I went to refinance the house I found out he had assigned the note to someone he owed money to. That guy was ecstatic when I offered him a $57,000 payoff).

Finally, quantify the results of over paying. Say you over pay by $30,000.
How much of that did you recapture with deductible interest?
Buying and contracting home improvements now when prices are down?
Having time to do work now when your career is not at full speed?
Etc.
While rates are down.
What's your time worth. Be done looking. Not another day with a GPS and digital camera ferreting out properties.
Amortize that over 10 years of ownership and it is a relatively modest "mistake".

Turn off this opinion machine and go to work getting an offer approved!

kapone says

The 6544 sqft is only the top two levels. It has an almost 4000 sqft basement.

That is physically impossible. Are you saying the basement is LARGER than the top 2 floors? Assuming the top 2 floors are indeed a combiend 6544 square feet, that means each floor is 3,272 square feet. Yet the basement is 4,000. That is physically impossible.

If anything, the basement is SMALLER than the upper 2 floors since there is likely no basement under the portion of the house with the 2 car garage. So considering that the average 2 car garage is about 400 square feet, that means the basement is no bigger than 2,870 square feet.

Only once in my entire life have I seen a house with a basement under the garage. And the only reason that was possible was because the house was built on the side of an extremely steep hill.

And then the 2nd floor does not extend the whole width of the house, looking at the picture. I have no idea what the actual square footage of the house is, but 10,000 square feet is grossly exaggerated. It is likely no more than half that much.

Kapone,
What ever came about with this house? Just curious if you ended up getting the house?

Capitalism is broken.

It should be priced at $5 millions.