Edited to add answers to questions you're all raising in your comments. I'll keep adding answers as needed.
About a week and a half ago we were asked by our landlord to make an "as is" offer on our house. Initially we chose to just tell a few people about the opportunity. We didn't want to be giving play-by-play updates, thinking it would be easier to just tell people either that we bought our house or that we were moving to another rental.
I had a conversation with a neighbor last night, one of the few people we'd told, and she brought up some points I never would have considered. That made me realize that we're trying to blaze our way through uncharted territory on our own.
So, we've changed our minds. Actually, I've changed. Tim was open to telling people from the start. We'd love to get some practical feedback, things to factor in, options to consider, etc.
If you know me at all, then you know how badly I want to own a home. And I love, love, love where we're at. We live in a great neighborhood with a great yard and adequate space for our family. I would love to own this house. On the other hand, I don't want to have a home that owns us. I don't want to get in over our heads financially, both in monthly payments and in cost of repairs. Timing is everything.
I'll give you some things to consider before you give feedback.
* We have no down payment. The combination of Tim's salary (which is adequate for living) and the cost of housing make saving for a down payment virtually impossible.
* We are not willing to have me to go work in order to buy a home.
* Our house is livable, but needs some money poured into it (roof, exterior paint, possibly siding, fencing, windows, insulation, etc).
* While we're willing to learn, we don't have any experience in "do it yourself" house repairs.
* We've had a couple different loan amounts quoted to us that would probably be acceptable offers for our landlord, but they'd be a stretch for us.
* The increase in our monthly bills may be negated by a decrease in our state & federal taxes. (Stacey, feel free to chime in here!!)
* Our landlord does not have to sell. He planned on selling this rental when he retired, which he did in the spring. He and his wife are simply giving us a first chance at buying it.
* We've already factored in the cost of maintaining the house, paying for repairs, etc. and would only move forward if we could budget a cushion for those expenses.
* If we don't buy the house, they will sell it to someone else.
* As much as we love where we're at, we realize it's not the only place we could be happy.
* We have not been given a starting point in negotiating a price.
What we're thinking, and we'd love for you to tell us if you think we're wrong, is that we should get things done in the following order.
1. Get pre-qualified for the loans we've been offered.
2. Skip an appraisal (we've had a market analysis done on the house already and have an idea of what it could sell for).
3. Get an inspection.
4. Get bids on the cost of whatever repairs are needed.
5. Deduct the cost of repairs from the estimated cost of the house (and this seems wonky, like maybe we should be deducting these costs from what this house would be worth if it was all in tip-top shape ... so maybe we should get an appraisal).
6. Make an offer (assuming, of course, that we could afford the payments the loan would require).
Or maybe we should get an appraisal with the inspection results factored in. I'm assuming that would mean the appraised value would factor in the cost of repairs. Right?
Can you tell we've never bought a house before?
Honestly, the whole thing makes me battle against myself. I hate debt with a passion. The borrower is truly slave to the lender. So, there's a part of me that would love to get school debt paid off, then spend the rest of our lives in rentals or in a house that the Lord miraculously allows us to get into debt free. On the other hand, I see house debt a little differently than other debt, primarily because the value of the thing you've gone into debt for will appreciate. Our current economy proves that doesn't always pan out the way you expect, but overall that's the way house debt works. So, I go back and forth between wanting to just put all our extra effort into getting school debt paid off and thinking this opportunity may be our chance to enter the world of home ownership.
Anyway, when we told the first few people we asked them to pray for us to have wisdom. That's still what we want.
However, we'd also like feedback to help us sort through our options. If we buy the house, then it will truly be because the Lord worked it out. We have no way to manipulate it into working. If we pass up the opportunity, then I know the Lord will have something perfect for us when the time is right.
We just need to make a decision. We want it to be a wise and educated one.