Category: Housing

Tech Checkup 2019

Personal Electronics

Just about everyone owns a phone.  And I love the vitaminwater challenge to ditch your phone for a year.  In our case that is an iPhone XS Max, a Pixel 2, a Samsung Galaxy S4, and the trusty Amazon Fire Phone.  The Pixel is a work phone, so the iPhone is the only phone we spent over $100 on.

For our personal computers my wife and I each have a work laptop and at home we have a 2014 Mac Mini.

We each have a pair of Bose headphones.  I got the QC35s which are expensive, but I bought them used for about half the price.

We each have a Kindle Paperwhite which I’m pretty sure I purchased with some Staples ink money.

We also have a Sony a6000 which my wife likes to use when we travel.

Household Electronics

We got a Google Mini as a gift and then purchased a Chromecast Audio for $15 to control a dumb speaker we have in our room.

I was pretty sure we were going go without a TV.  But after seeing the prices of projectors we ended up with a Samsung 55″ TV.

We have a Ring doorbell and security system.

Kitchen

We have the a mixer, food processor, instant pot, slow cooker, and ice cream machine.  Nothing crazy like a sous vide, cotton candy machine, or a deep fryer though.

Conclusion

I try to keep things to a minimum and especially electronics since they can be expensive.  I’m pretty proud of what we have and the fact that it isn’t very expensive and gets used frequently.  Most of the items I bought used and will sell it as soon as I no longer need it.

Year End Summary 2018

We had great year in earning points and we managed to exhaust heaps as well.  We didn’t have any serious side hustles this year as we both started new jobs and focused our time on that.

Credit card signup bonuses:

Southwest – 50,000

AA – 70,000

United – 40,000

We used these points to travel back to California several times since we relocated to Austin.  We also took a few vacations including one to Asia and New Zealand that burned 500,000 points to fly around in business class.  In fact, we have something similar set for 2019, but you won’t get to hear about that until the summer.

Marriott – 380,000

I was loving the Marriott points until they increased the price of their travel packages.  We got just about every card that gave Marriott points, so I think it was about time to call it quits.

Hyatt – 120,000

IHG – 100,000

One benefit I appreciate from their card is 4th night free on bookings with points.

Amex – 80,000

Chase – 100,000

Citi – 50,000

Barclays – $750

Amex, Chase, and Citi are great for their flexibility to use as money or transferrable points.

Total – 1,010,000 + $750 travel ($10,850 value) 

The $10,850 is a conservative number especially since we have used points to avoid expensive flights such as using 9,000 miles for a $300 flight and 58,000 for a $2,500 one.

Additional income:

Cashback ($250)

Cashback portals ($375)

Bank bonuses ($200)

Staples credit ($470)

Mortgage bonus ($1000)

Agent bonus ($10,000)

Total – $12,295

Nothing new to see here, just carrying on with the stuff we have done for 3 years now.

Conclusion

Having an extra $12,000 is insane for not doing much.  Meanwhile the ten grand toward travel went toward more like $30,000 because we did a lot of business class, something we certainly wouldn’t pay for.  I tell my wife I like to be the richest person when shopping somewhere but the poorest when traveling.  What I mean is I like to be frugal when purchasing things with my money so I can save more, but be extravagant with points to get expensive experiences.  Rules for credit cards continue to get more restrictive, so it will be interesting to see how long the game lasts, but I’ll keep playing until the end.

Home Purchased

The home buying process went smoothly.  We searched, put in an offer, got our financing, and closed.  We have moved in and have been finding a million things to clean, fix, and improve despite it being a newly constructed home.  Along with homeownership comes a lot of temptations to keep up with the Jones and lots of costs.

Temptations

There are so many things that you are marketed for when you are a homeowner.  The first weeks have brought mailers about home security, water purification systems, mortgage death insurance, and more.  Most things are easy to avoid, but there are some things that I find tempting.

  • Home automation

Home automation is admittedly cool.  You can control air conditioning, locks, find water leaks, and more from your phone.  However, I probably don’t need a connected smoke detector or expensive lights that automatically turn on when I enter a room.  On this front I’m going to get a lock with a keypad and probably skip nearly everything else.

  • Security

Security is great, but I don’t like monthly fees and they can be quite high ($30-$50 a month).  I’m trying to figure out the right balance because I don’t want to sink a ton of money into protecting every window and door with sensors and cameras.  Maybe I’ll have some sensors that alert me, but without the extra monthly fee for 24/7 monitoring.

  • Furniture and trimmings

When we were renting we wanted decent stuff that could survive several moves and fit into most places, but now that we are settled we want stuff that matches our layout.  Fortunately we don’t have to replace our stuff to do so since we sold most of it two years ago.  We even bought a TV.  However, we do have to get some window coverings which are definitely included in any rental.

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Home Buying: The Financing

Unless you have a bundle of cash, you’ll probably need financing to buy your house.  You can look at all the homes you’d like, but you’ll need a pre-approval if you are going to make an offer.  I would recommend setting a budget for your home rather than taking whatever the lender will approve you for.

Pre-qualification or Pre-approval

If you are curious whether a lender would give you a loan you can get pre-qualified.  Usually this is just a soft pull of your credit and they will tell you how much you could afford.  A pre-approval generally requires a hard pull of your credit and may require some documentation.  A pre-approval is stronger than a pre-qualification, but I’d wait until you are ready to make an offer to get the pre-approval.  Getting either of these does not commit you to using that lender nor commit them to providing you a loan.

Choosing a lender

You will want to choose a lender that has a good reputation, because it would be terrible to lose a home.  However, all situations are different, so you may see bad reviews from people that didn’t get approved.  Lenders are regulated by the government, so make sure they have a license number and are able to lend in your state.

You will want to get loan estimates from multiple lenders so you get the best prices.  When comparing the loan estimates you will want to do an apples to apples comparison.  Don’t compare a 4% rate with a 4.5% rate, nor a 15-year with a 30-year, make sure the terms are the same.  You could do the math, but they can give you multiple loan estimates for much easier comparisons.  If you look at the two pictures you will want to add up A. Origination Charges and B. Services You Cannot Shop For.  On the left we have a quote which would have fees of $564 whereas the other has fees of $929 ($275 + $654).

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Home Buying: The Offer

Now that you have found the house you are interested in buying and the price seems reasonable you need to proceed with an offer.  It is scary buying something that costs multiples of your salary, but hopefully you have thought through renting vs. buying before now.

Agent or not

So at this point you should already have worked out whether you are using an agent and how much, if any, of a rebate they will be giving you.  If you have an agent all communications should go through them since they are familiar with the process.

First offer

Your first offer really depends on the market and how much you like the place.  In the Bay Area houses almost always sell for more than asking, so submitting an offer of full ask may not even be enough.  However, here in Austin I’m pretty sure a full ask offer would get you the property.  Currently it is a seller’s market here and properties move pretty quickly, so it would be tough to go too low without someone beating you.  I’d recommend trying something below the full price.  Even if it is only $1,000 less that is saving a Hamilton a hundred times.

If using an agent I’d ask for their recommendation but be a bit skeptical as their incentive would be to get you in the house.  An interesting thing is that the selling agent has their incentives aligned with you.  They would much rather sell something faster for $10,000 less which is only a $300 commission difference for them than wait months longer to get a full ask offer.  In Freakonomics the authors showed that agents leave their own homes on the market longer than they would for a client.

When talking with the sales agent for the builder he said that the managers wanted the full price they he told us and were not willing to budge because they had already lowered the price by more than 10%.

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