Would you buy this house for $866K?

I bought my first house with my roommate while I was on a 3 week vacation (that my company forced me to take) in August 2023. My company was not doing well, my job was clearly in danger but I was determined to buy a house.

I’ve been looking for more than a year a this point and was desperate. My lease was ending and I didn’t renew.

Desperation is the worse. I moved into my sister’s house after my lease ended in July with no prospects for where I was going to live after she comes back in September. She gave me a deadline of having a purchased house by the time she got back with. The idea is that if I had a house lined up I’d move out of her place in a few months. Otherwise I would have to lease for another year.

So I aggressively scrolled through the MLS (I’m a licensed real estate agent in MA) and Zillow every day and went to open houses during the weekends. Every house I looked at went under contract within a week of being listed. Despite this, I still had standards, which made it harder. I wanted the units to feel spacious, have lots of natural light, be next to a T station (Boston’s subway line), and a basement with high ceilings.

My roommate (she invited herself into this investment project) wanted to be 30 to 45 minutes away from Newbury street using public transit. This made it extra difficult. I would have bought in Waltham if it was up to me.

We wanted a lot. And I was losing confidence by the day with every house we saw. Everything under 1M (our budget was 800K) was cramped or dark and they still went over asking.

I called the agent immediately to ask about the house. I went to the open house that Saturday. I liked what I saw. A trustworthy home inspector (Richie Wong) I got connected with just days before was able to do a pre-offer inspection with me at the next day at the Sunday open house.

I had no idea what half the things he said meant. The only thing I got out of the inspection was that the foundation was solid and that’s all I indexed on. He was nice enough to give some pointers on what it costed him to renovate his investment properties. At this point I had zero clue what anything cost.

The rough estimate is that it would cost $300K if I was managing the project myself and $600K if I hired a general contractor. It gave me some numbers to anchor on but somehow I thought I could do it for less. This was a mistake. It turns out these numbers were an underestimate given today’s material and labor costs.

With a fuzzy knowledge of what a rehab actually cost, I ran with the numbers and determined that it will be cheaper than renting. I put in an offer for 866K with no home inspection contingency and no mortgage contingency which turned out to be a very bad idea. I did get the house though.