LooseSuits

So, yeah, I just bought a house. My first, in fact. Feels cool, interesting, and with one pressing question in mind. Of course, this pressing question has a pretty long backstory with lots of numbers:

Two weekends ago we went to Tampa to see a couple of houses again. After months of searching, we had narrowed our search to these two. Both were in the same neighborhood, both were new construction inventory homes, and both were at about the same price:

House 1 (Built by Tripp Trademark Homes): Original value of $234,000 (including all upgrades). One story, 3br/3ba. 1850sqft. New price: $202,000

House 2 (Built by KB Homes): Original value of $210,000 (including all upgrades). Two story, 4br/2.5ba. 1878sqft. New price: $190,000.

As I said, both houses were in the same subdivision, sort of. Different Homeowners' associations, about 1/4mi from each other.

When we saw House 2, we were set. THIS would be our house. That is, until we started talking numbers, and looking at the business side of things. This house was offered to us at 190,000 with $5,000 towards closing costs. Total payment to purchase: ~$15,000. Interest rate was 6.5%

So we talked to the folks in House 1. Their offer: $202,000, $6,400 towards closing costs (which basically covered everything). Total payment to purcase: ~12,000. Interest rate was 6.75%, which they bought down to 6.5%

We started doing comparissons between the two houses.

House 2 had a corner lot (good) in an open street (bad), was highly visible (good) and had a major road going behind it (bad). Being a 2-story house, it would also cost more to insure than House 1. Electricity would also be considerably higher, since it had one AC unit for both floors, meaning the unit would be working harder.

House 1 was hidden away in the back of the subdivision (good) with a dead-end street (good), not very visible (bad), but with a conservation zone behind it (good). Because it was 1 story, it would cost less to insure. This was aided by the quality of the construction and many of the safety features added by the builder. Being a 1-story house, it would also take less electricity to cool.

In short, while the cost of House 1 was more, when you counted in maintenance the cost of both Houses was the same. So our decission was not yet made.

We talked to both builders about this, telling them what was going on with the other. They were wanting to sell, and we figured a bidding war was in our favor, if they took us seriously. We told them we would be making a decision no later than Wednesday.

House 1 responded immediately. They threw in $2,000 extra towards closing costs, bought down the interest to 6.375% (it had risen between the original estimate and this point), in addition to doing a 1 year buydown of the interest to 5.375%. Finally, they added in a few extras we requested, like an upgrded oven and upgraded lighting in some areas of the house.

House 2 took its time. It was Tuesday night before we heard from these guys again. They offered to lower the house price to $187,000, but that was all they could do.

We decided to go with House 1. The costs would still end up being about the same, once all was taken into consideration, but the responsiveness was something that weighed very heavily on us: if the people of House 2 took this long to work on a deal, how long would they take to respond to any warantee issues on the home?

We told the guy from House 2 that we had decided to go with House 1 and would be going to contract in 3 days. Then he told us he might be able to work something else out.

Saturday comes and goes. We go to contract, lock in a rate, and start the process, putting $3,000 on House 1.

I just got a call yesterday from House 2. They were able to bring the interest rate down to 6.375% and agreed to cover almost all closing costs, matching what House 1 gave us.

Had House 2 come to us with this deal just a few days before, we would have gone to contract with them immediately, no questions asked. As it is, I'll be paying slightly more for House 1, but feel considerably better about who I'm dealing with, given what came before.

Still, I've run the numbers, and if I go with House 2 instead of House 1, in the long term we'll be paying less for a (very slightly) bigger house with more land, even with the loss of the $3,000 (which is a non-refundable down payment on the property).

Question to you: Would you? Why or why not?