PF Weekly Grab a Brew

Is the big house the problem or the price? : PF Friday grab a brew #66

grab-a-brew-online-reviewGO BIG OR GO HOME

 

We all know someone who bought the big house and later found out it was too much to handle or too pricey for their budget.

We may like to browse online at pictures of big houses for sale but for many it’s just a dream or a distant reality.

We have been through some beautiful big houses when we have toured opened houses and although we are being nosey we love for that moment to feel what luxury is all about.

I was having my morning brew while reading Yahoo news and again another Hollywood star is struggling to sell their big house or mansion as we would all call it.

He has the big house that is absolutely stunning on the market for $15.5 million dollars BUT no one has purchased it and he has slowly reduced the price. This is the one and only Bruce Willis which we have learned to love over the years from watching various movies.

The Idaho ranch is now listed at $8.8 million dollars nearly half off the original listing price. If I had $8.8 million dollars and depending on other factors such as location and what the house has to offer I’d say that’s a darn good deal. I would almost feel as if I just won the lottery if I bought that house for nearly half off.

If you are looking for a big house to rent for parties or simply to rent you might just be in luck with some of these sellers who are struggling to sell but need to make cash to pay off the mortgage because they have since left the house to work on other ventures.

The problem?

You may never be able to sell it at $8.8 million down the road let alone the $15.5 million Willis originally had it on the market for. Having a big house is great but we all have to remember there are only a limited amount of people who can whip out a mortgage or pay cash into the millions of dollars to purchase said homes.

Not everyone is looking to buy really big houses even though many of us might dream of having the mansion property with all the bells and whistles. Many homes are becoming less affordable to most people these days.

 

The big house

 

The same goes for houses on a smaller scale and I’m not talking millions I’m talking hundreds of thousands leading up to a million or two dollars. Sure, it’s nice to have all the frosting on a new big house but are you prepared that if the time comes and you need to sell that it might not sell as fast as your neighbours up the street and around the corners house might for $400,000?

We see it all the time in our neighbourhood as some of the homes are in the million dollar range and they sit on the market. It’s not that they are overpriced as we are in a sought after area.

It’s because there is a limited amount of people willing to dish out that kind of money. It’s nice to have a big house but with that mortgage comes bigger expenses as well. Buy a mansion and you’ll likely need staff to help run the property. Sure they eventually sell but not as fast as many anticipated.

Do you remember the post I wrote about the couple a street or so over from us that jumped the gun and bought a pricey house while they still hadn’t sold their house? It took them ages to sell their house on a beautiful street and they had to cover two mortgages at the same time.

Sure the price was reduced over the months and eventually it sold but there’s a reason sticking to a realistic budget is important whether you are rich or not. It’s also important to make sure you can cover the expenses of two properties if you do buy a second home.

Sure most of these celebrities have cash although many of them don’t because we hear of so many of them going bankrupt or the money is tied up in real estate. It’s also because they blow money faster than they make it sometimes because they live on another money planet than most people.

I remember watching a program once where Michael Jackson went shopping. He walked in a store and was just pointing at items and saying he wanted that, and this and so on. Money takes some people to a level most of us will never experience. Some might not want to because money doesn’t equate to happiness. These stars for the most part can afford to do that because they make the big bucks but I still hold true that budgeting your money no matter how much you make is important.

My wife and I had a conversation about buying the big house down the road if we decided to sell our current home. We would like a bit more space, maybe a pool and walkout to a larger property BUT that all comes with more expenses, a new mortgage unless we can pay cash to cover the difference in price for the new home.

We bought our house on one income because we didn’t want to be house poor or stuck if something were to happen to one of our incomes. It’s a tough call and for some risk is better than kicking back like we did. That’s what made us feel comfortable though. We aren’t sure if we are prepared to go bigger as we like the debt free lifestyle and the doors it has opened for us.

If you live in Toronto, $500,000 is nothing for a house but think prices relative to your community so this all makes sense to you. I’m not sure how many millionaires reside in Idaho but I’m sure at one point someone will jump on the 50% reduction on his ranch.

It’s easier to sell a home in the mid-range to buyers and much quicker that the near million dollar home. That doesn’t mean you can’t go out and spend a boat load of cash on buying a big house but if you decide to sell realize that the price you want might not be the price you get.

If you need to move for work or are getting divorced or need to sell fast you might just have to take a price dump to get it off your hands.

I don’t know how much Bruce paid for that big house but like any property it has likely gone up in value. Whether it has gone up enough for him to still make a profit is his business but sometimes people don’t care and just want out profit or no profit.

Do you know someone who bought the big house then struggled to sell it and had to cut the price just to find a buyer?

 

Top recipe

 

marshmallow and white chocolate brownies

If you don’t already know I have a second Facebook page online called The Free Recipe Depot where I share recipes from other Foodie Bloggers from around the world.

Once a week I pick one recipe that has been submitted as my Top Recipe of the week. Trust me when I say this is no easy task as some of these foodies can cook up a storm.

This week that recipe goes to a food blog called “Family Food and Travel” with their Marshmallow White Chocolate Brownies. If you know me I have a thing for brownies.

Don’t believe me? Check out my Brownie board on Pinterest with well over 1000 pins and over a 1000 followers on that one board alone. I’m not the only fan of brownies of all kinds and I can understand why. They are delicious no matter what you stuff or layer them with.

Weekly CBB posts

 

If you missed any CBB posts from the week here is the list of posts you can catch up on reading!

 

Weekly reads

 

Every week I share a few of the best personal finance blog posts that I read online over the past week with all of you so please enjoy my top picks.

Well, that’s a wrap for this PF Friday’s Grab a brew #66. Happy budgeting and I’ll see you here again next week when I do it all over again.

-Mr.CBB

 

Money-quote

 

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12 Comments

  1. Yup, the more expensive homes have a smaller market which causes less liquidity. I sometimes have to sell things at a discount in order to get rid of it faster lol, but not when it comes to large assets like property. Maybe big time Hollywood stars like Bruce can afford to sell his place at a lower price because he can just make back the different from his next Die Hard movie πŸ˜€ I wonder if the perceived value of a house or ranch goes up if it used to belong to a celebrity πŸ™‚ And thanks for the mention.

  2. Thanks for this really entertaining post! And no matter how amazing those big houses are, I would never want to be responsible for that mortgage! My parents bought a pretty big house and now that all of my sisters and I are grown, they’ve found that it’s simply way too big for them.
    My husband and I still haven’t pulled the trigger on buying any house. We live in LA and it’s just saturated with over-priced real-estate. We might just wait and buy a house in cash once we’re ready to retire! πŸ™‚

    1. Hi Anneli,
      It’s funny because we hear that all the time from couples who are retired and the kids are gone so they decide to sell. Sometimes it’s tough to sell depending on the market and for those that rely on their house as retirement income that could be stressful. Cheers mate

  3. I remember seeing that show with Michael Jackson shopping….. Crazy!!!!
    My sister-in-law and her hubby had their house up for sale a while back while they were looking for a new place. They found and bought the new house before selling the old house. Other than being a little peeved about having two houses they weren’t overly concerned as the first place was mortgage free. So they had to have a mortgage for house number two. If the bank was hoping to make lots of interest money off that mortgage they were in for a rude surprise as the mortgage was paid off as soon as house #1 sold. That is the way to do it if you can. Because the first house was mortgage free they were able to sit tight and get a price they were happy with instead of selling fast for what ever they could get.
    Selling our currant house is under discussion these days but hasn’t gone far. I would be fine moving back to my home town and closer to my Dad. I seriously doubt we would get what hubby thinks it’s worth, the house needs a lot of work and he is no longer capable of doing it for reasons you already know. The boys could do some of the work but the problem there is having hubby underfoot while they try to do it.Hubby has a bad habit of telling them to do something then ‘checking to make sure they are doing it right’ and not only getting in the way but taking over the job from them. It’s a no win situation. I would very much prefer to be living somewhere else while this place is on the market, having been there and done that with selling a house(this is our 4th house over the years) We have been burned by agents jerking us around over showings….showing up late, not showing up at all and not calling as well as very short notice. If I’m living somewhere else then they can come and go without being a pain in my butt.

    1. Hi Christine…
      I didn’t think anyone would remember that program lol. It sounds to me that selling your house sounds like something you wouldn’t mind doing but going through the process is a bit too much. I know what that’s like but I have only sold 2 homes so far. It can get frustrating with all that you have to do in order to prepare to sell a house. I might have to write a blog post on that one day… maybe I could get some insight from you since I’m new here.

      1. We have been in this house 22 years now so I don’t know how up to date any information from me would be. But I wasn’t happy about a few things back when which is why I would rather be somewhere else when the place is on the market. Hubby thinks we could get a good price for this house, I don’t. Last time the mortgage came up for renewal we had to re-finance thanks to the bank. That meant having the house assessed and lawyer fees, both at our expense. The value came back at $165K I think it was. Hubby thought that was low. Should have seen the look on his face when I said I wouldn’t pay $150K for it…..then he thought about it and realized the boat load of work this place needs..easily $20-$30K worth. Mind you he still thinks we could get a good price for it without too much trouble. I have days I swear the best repair here would come by way of a bulldozer…..

  4. I think a house at $8.8 million is a steal of a deal! πŸ˜‰ Seriously though, it is tempting to go for the nice house but it’s just not worth it if you can’t reasonably manage it. It reminds me of the “nice” neighborhood next to us when I was growing up. My Dad would always say that if you were to walk into one of those houses that 90% of them wouldn’t have a piece of furniture as they spent it all on the house. Those brownies, btw, look awesome! I think I may just lick the screen, lol. πŸ˜‰

    1. Hey John,
      It does sound like a steal of a deal.. especially with that 50% reduction. I know exactly what your dad means. We have been through many houses that we can’t afford lol and the furniture is not much to be desired…. no screen lickin mate you’re funny. Better be careful the What’s For Dinner ladies might come chase you since you’ve been MIA lol.

  5. Of course the big house is not directly the problem, what I think the problem is that after purchasing, some people realize that they would want other things more than that house at that particular time in their lives, such as traveling, vehicles, different investments and so on.
    Superb read though, I really enjoy your posts, keep them coming

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