I’ve been trying to decide what my dumbest purchase was. The reason I was having a hard time coming up with one, is (1) I’ve made more than one really dumb purchase, and (2) a lot of good actually came out of my dumbest purchases, making them not seem so dumb.
I finally decided that even though good came out of this particular purchase, buying our manufactured home in 1997 qualifies as the dumbest purchase my husband and I ever made.
In the fall of 1997, I was 4 months pregnant with our first child. We were living in an older, 2 bedroom apartment in a decent part of town. The rent was dirt-cheap. However, I had always heard that couples should buy their first home before having children, because it gets harder to qualify for your first home after you have kids.
In addition, my husband and I wanted me to be a stay-at-home mom, and we knew we’d never qualify for anything on my husband’s income alone. That should have been a big clue that we had no business buying a home.
We couldn’t qualify for a mortgage on a stick-built home, so we went to our local used car lot manufactured home retailer, and took a look at a few homes. The agent sent us off to look at two older manufactured homes first. I still remember them. The first one wasn’t on it’s foundation really well. The floor was actually slanted.
The second home we looked at was something out of the 70s. Think psychedelic daisy wallpaper all over the bathroom. Yes, it was that bad.
Finally we were sent to a 1989 single wide home. It was in a park next to a rock quarry. Despite the horrible view and the fact that the home was in the middle of an industrial area, the home itself was really cute. I began to envision living there with my husband and new baby…cooking in the kitchen…and oh my goodness, there was a dishwasher! Long story short…I fell in love.
We went back to the office and told the lady we wanted to make an offer, but admitted we had never purchased anything so big anymore. Yes, we admitted we were newbies. And we didn’t have a down payment.
The lady told us how much we would need, and we borrowed the down payment from Jim’s dad. (We paid it off in full in 3 months.) If I remember right, we even offered $24,000, which was the asking price for the house. I still cringe thinking about it.
We took out a 15 year, fixed rate loan (the one thing we did right), and moved in to our new piece of real estate. But we didn’t own the land, so it really wasn’t real estate.
We lived there for 5 years, before moving, and for the most part it was a good 5 years. But there are several points which qualify this as our dumbest purchase ever.
- We didn’t research. We made an offer after only seeing 3 homes. We knew nothing about the buying process or negotiation.
- We didn’t take into account that space rent would go up. By the time we moved out, our mortgage had remained the same, but our space rent had gone up a couple hundred dollars, making our budget very tight.
- We didn’t take into account that manufactured homes depreciate in value. That presented a huge problem when we tried to sell. And we had to sell. It was very stressful.
- We didn’t realize that if the owner of a manufactured home park sells the park, the people living in the park can be forced to sell their homes. Fortunately that didn’t happen to us, but with industrial development all around us, it weighed heavily on our minds.
- We didn’t notice the signs of an impending crash in the manufactured housing market. The signs were there, much like the signs of the mortgage crisis today. Unfortunately the worst of the crisis hit right around the time we had to sell our home. Again, it was very stressful.
- Most of all, we decided to cave to the pressure to keep up with the Joneses and buy a home when we weren’t ready to.
In the end it was a good place to live for 5 years. And despite the bad decision making on our part, when we had to sell, everything worked out in quite the miraculous way. If you’re interested in what happened that made us need to sell our home, what we went through when trying to sell, and the amazing way it all worked out in the end, check back here Sunday when I post about how God showed us He really can work everything for good. Even dumb purchases.
What’s the dumbest purchase you’ve ever made? Please share! It can’t be much worse than mine!