While I’ve only really had to directly deal with finances for the last five years or so, when I look back at my home purchase a year and a half ago I both wince in pain and smile in delight. See, when I purchased my home, I made what I considered my best money move ever (to date of course) and my worst money move ever in two aspects of the purchase.
My best money move was in the purchase price of the home. When we were looking, the housing market sizzling hot with homes having open houses on Sundays and signing contracts on Tuesdays. Houses were going above their listing price, bidding wars were erupting, and it was a feeding frenzy. If you were a seller, you held all the cards and you played them. We put a bid on three houses, none of which were even in the running, before we put a bid on the house we eventually owned.
So why was this the best money move ever? My offer was for $295,000 and that the seller could continuing living there for two months, paying me for my carrying costs. A competing offer was for $330,000, all cash, but the seller couldn’t live in the house for a few more months. In fact, my realtor found out that the other offer had up to $350,000 in cash (something the seller’s agent disclosed to try to drive up my offer). I knew that the sellers had purchased a home in Mt. Airy and were looking to move but that seller hadn’t found a new home yet and so they were delaying the process. My seller wanted to sell their house as soon as possible so they could afford their new house and were in a bit of a bind, I was third in line in this real estate love triangle.
So when my realtor asked me whether I wanted to increase my offer, I told her no. Here was my reasoning:
- Why were they asking me for a counter-offer if the higher bid was a good $35,000 higher? I reasoned that it was because they found the other part of my offer, that they could stay for two months, very appealing (they almost required it) and so they wanted to see if I would move.
- The seller’s agent disclosing that the other bidder had $350,000 had the opposite effect of what she intended. There was no way I could beat someone with $350,000 in cash… I had to live or die by the other clauses in the contract, not the $$$ ones.
So I crossed my fingers, waited, and learned a couple days later that I won… even though I offered $35,000 less. That was, by far, my best money move ever.
Now, my worst… you could argue that buying a house near the peak of a housing market was pretty stupid. However, hindsight is twenty-twenty and if housing prices begin to sag (they haven’t in this area yet), maybe it will be my worst money move. However, I think my worst money move was when I didn’t negotiate any of my lender fees down. I paid all those stupid administrative fees and document fees because I felt I was under the gun to close in two weeks (another contingency in the contract). In reality, I probably wasn’t under so much pressure and could’ve negotiated some of those down. In the end, I think it cost me a thousand dollars or more across two loans (first and second mortgage).
So, there you have it… my best and worst money moves ever. Now bloggers out there, if you want to write about your own best and worst money moves ever, post it and link back to here (or email me) and we can start some sort of list. Hopefully it can be an educational experience for everyone and we can learn from each other’s mistakes!
Other Best and Worst Money Moves Ever:
- Five Cent Nickel
- Binary Dollar
- It’s Just Money
- Student of Finance
- Achieving Wealth
- Young & Broke
- Blunt Money – Best Move, Worst Move
- Picking Up Nickels
- Exchange Ingredients
- Lazy Man and Money