Buying my neighbours house. Bloody big life changing decision to be made.

[Bones]

My neighbour is selling his house.

His house is nicer than mine in the fact that it has one extra bedroom and a nice pool. The house is also fully landscaped, in short it is complete with nothing to spend. Our backyard is not big enough for a pool which would be nice with a young family.

I am considering buying it. This would mean increasing my mortgage by approximately 20% which maybe I can, and maybe I can

[DrewKaree]

First off, talk to your neighbor about it, because if they know this, they may put off a potential buyer for a bit of time to allow you to see if the bank thinks you can swing it, otherwise they may get an offer and take it, never knowing your intentions, and you both may end up feeling bad about it - not with each other, but that "man, that would have been nice" - regretful, not angry, I mean.

Second, get a move on man, shake a leg, GIT 'ER DONE! If it's something you want to do, you will move on this at a pace that will show your interest, and it sounds like you're interested, so I believe stepping up the pace in seeing the bank is your best move.

Third, find out what he wants to sell it for, and if it's agreeable to you, talk to him about the rent situation so he won't have to make the double move.

There IS no good way to bring this up, other than to be straightforward.  My wife and I have to do this EXACT thing later on today with a family member, and while neither of us is looking forward to it, if we never talk it over with them, we'll never know if it's possible to do, or whether they were even aware of the situation.

There doesn't exist a way to talk about a tens-of-thousands-of-millions-of-dollars transaction easily   Brother, you and me BOTH wouldn't have that little pitter-patter in your heart just THINKING about it if there were!

[GameOver]

I agree w/Drew, let your neighbor know your thoughts, if even to give you a few days to really think it thru & get the info you need to determine if you could/should do the deal.  Sounds like you're happy where you're at & if nothing changed you'd be ok.  An extra 20% could be signifigant depending on 20% of what (I saw the pic of your house on the board, depending on the original loan terms I'd guess 20% is nothing to sneeze at).  What else could you spend the 20% on?   Saving for retirement?  College for the kids?  Take the fam on vacation each year?  Consider the trade-offs for the extra room and the pool.

Besides, isn't it better to have a neighbor with a pool, than to have your own pool anyway? 

[fredster]

If you think you can afford it now, that payment will look small in 5 to 10 years.  The first house I bought had a Mortgage of like $320.  I was making $7.25 an hour back in '86, and that looked like a big payment.

Now it's not even a car payment.

Talk to the neigbor and you can find out more of what you need to know.  Too bad you didn't talk to him before he put it up for sale.

The best thing is, you don't have rent a moving van.

Just a stuid question, could you put that 20% in your existing house and add the features you are missing?

[missioncontrol]

I also agree with Drew.......better talk to your neighbor as soon as possible or else you may regret it........

[GameOver]

Also to consider - I don't know how it is in Australia (I think that's where you're from?), but if you get a bigger house/more land, you'll also have to pay more in

propery taxes
homeowners insuarance (especially w/a pool!)
utilities (gas/electric) (pool pumps can suck some juice!)

So the 20% mortgage increase would just be the tip of the iceberg.

[DrewKaree]

If it doesn't snow this evening, I'll PM you with how everything worked with us tonight and maybe you can glean something from that or spot something that further questions might help you with.... T - 6 hours and counting

[Bones]

Thanks for the feedback.

I now have the wheels turning. I have fully discussed the purchase with my neighbor and have an indication of what a reasonable price is in his mind. I also jumped online and checked out similar homes as mine in the local area to get an indication of what I expect when selling.

Prices here are stable at the moment after going upward in a crazy fashion for a couple of years. Home loan interest rates are also about to rise. More to consider and I am so far from an economic guru that it

[RayB]

It's a tough thing being friends with someone you want to buy from. Thing is, your neighbor likely wants to get top dollar for his home (don't we all?) and you likely want to get the lowest price possible. I really don't think that will happen. (It also puts your neighbor in an ackward position).

[Bones]

We had some beers together <hic> and I looked him in the eye and seriously asked;

If you don't want me to buy or bid, tell me.

He gave me the all clear.

There are also advantages other than financial here. If his new house takes longer than expected to build, it