Educating the Wheelers


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Chronicling the Experience of Educating our Children and Managing our Family

Friday, March 10, 2006

My Absolute Worst Financial Mistake Ever, Bar None

My first townhouse purchase [and sale].

This one is a no brainer. I don't even know where to start listing all the things I did wrong.

I had just gotten my first really BIG raise, the kind of money that someone who is paying 325/month in rent to split an apartment and doesn't have a car or debt or school loans or pets or anything would even know what to do with.

Well, thank god one of my best friends was a realtor! She set me straight on that one.

"You know what you should do, you should buy a house!"

[Readers should now be wincing then shouting, "Don't go in there, that's where the monster is!" and throwing popcorn at the screen. You know what's coming.]

Where to begin? I had only recently realized that maybe I should try to do something with my money, so I did have some money in a mutual fund [the specifics of which were probably Worst Financial Mistake #3 or #4, but we'll get to that another day], but not enough for a real down payment. But I did have a father who would be proud that his young daughter was starting to get ahead in life, so he would help. And be paid back over the course of years later.

If you are imagining a printout of MLS listings with one really awesome place at the highest tippy top of my "affordability" and everything else on the list really crappy, you know where this is going.

If you are imagining that I had no idea that the number at the bottom of the good faith estimate was NOT what I'd actually cut a check for every month [Hello, taxes, insurance and association fees!], you know where this is going.

If you are imagining that I was now paying over SIX TIMES my former housing cost per month, you know where this is going.

If you are imagining that I let a now-former friend move into the downstairs bedroom for a couple hundred dollars a month to now make ends meet, and it was the one of the most horrible experience dealing with another human being in close quarters I've ever had [Helpful tip from the committee: don't rent to unemployed jazz musicians. You have been warned], you know where this is going.

If you are imagining that this is in Seattle, and the dotcom bubble is about to burst and I was going to have to sell after owning it for less than two years so I could keep my job while my company merged with one in San Francisco [one of only a small handful out of a company of about 100, I was a lucky one], you know where this is going.

If you are imagining that my good friend massively overpriced my house to sell it, perhaps as a good samaritan because she knew I was in a bad financial way by this point, and then incrementally dropped the price a little here, a little there over the weeks [or was it months?] until it sold, you know where this is going.

If you are imagining me making payments on my house while it's not selling while I'm paying an insane amount of rent in SF, you know where this is going.

If you are imagining that sitting down to sign the closing papers and seeing what was "leftover" after the sale was a surprise because of a numbers snafu, you know where this is going.

And yet, there's an upside to this whole big mess. When I got married and it came time for Andrew and I to buy a house, things went very, very differently. I hadn't yet discovered Searchlight Crusade [and if you're going to buy a house, you need to spend some time there], but this transaction was a 180 degree turnaround from the first one, that's for sure.

UPDATE: I want to add that I don't really blame my friend for much of this debacle, save for treating it like a trip to Macy's to buy jewelry rather than The Most Important Financial Transaction Of My Life. I didn't know what I was doing, and I got the expensive lesson that I deserved. But in case you haven't already learned: do not ever, EVER do business with a friend. The stakes are too high on both fronts. In this case, our friendship survived, but only sort of.

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