Well...we made a decision...the expensive one. Actually, we spent an inordinate amount of time last week looking at many houses.
We ranged the top houses and listed the top five best houses. Their prices ran from $750k to $850k to $950k to $1.2M and another in between. On our last day of looking we decided to look at one more house that had just come on the market.
Boom - it hit us! This was the one. Beautiful house. Very large. Lots of bed rooms - more than enough space for in-laws, children and a nanny! Great neighborhood. Not the most expensive house in the area. Phenomenal school system. Very safe. Costco not too far away. Not too far from my wife's office and from mine. Seems perfect. Unfortunately, it's $1.1M, which is a bit past our comfort zone. We won't have to do anything right away.
We ran the numbers quickly. Decided we could afford it. We put an offer in. Less than what the sellers want, but more than what we would love. We'll see what happens over the next few days. It certainly will be interested.
On the trip home, we ran the numbers again. Our new budget has quite a few assumptions about taxes and paychecks. I'll need to run through the numbers with my accountant to get a more solid idea. The key point is that we should still be able to save some money each month - in addition to a very generouse reserve for household maintenance, accrual for vacations and assumptions for regular spending.
We also anticipate income increases (if I can keep my job - so far everything looks good), which will increase our rate of savings. However, we certainly won't be able to maintain our current savings rate due to the doubling in housing costs.
The real challenge - although a controlable and measurable one - is managing expenses between the period of the move and when my wife starts her new job. We'll have about 3 months without her portion of our monthly earnings. We'll manage, but it will be painful.
I'll have to draw up a detailed cash flow plan before we're comfortable with everything that's happening.
We do adore the house and are very excitied about the possibility. The next step is seeing if they accept our offer - I expect they will counter a bit.
If timing weren't everything ... I have a major presentation to our joint venture partner's CEO coming up (several weeks ahead of schedule). At the same time I'll need to arrange for building inspection, etc.... Sometimes life can suck despite a rosey future!