Misleading rent vs. buy calculators

Oh, man, some of the online calculators that promise to help you decide whether to rent or buy a home are wicked misleading!

I just plugged in our numbers, and one calculator made so many assumptive and factual errors it was scary. I now feel the need to blog a public service announcement. Stand back. This may be messy.

First of all, though my rent would be less than my mortgage, the calculator assumed I would spend the difference rather than save it. Don’t they know I watch Suze Orman? Big problem for the bottom line, that assumption. And there was no way to change it.

Second, the calculator assumed that every penny paid to the mortgage would come off the principle. I asked for a calculation on four years of renting versus buying. The calculator said that I would shave at least a third of the balance of the loan in that time. With what loan? Is someone now offering principle-only loans? ‘Cuz I’ get one of them, no question. In the first four years of a mortgage, we’ll be lucky if 15% of our payment goes to principle. Using the faulty numbers, the calculator had my savings account ten times bigger than it really would be after four years of owning a new mortgage. That’s 1000% off. Slight problem, no?

Third, the calculator neglected to take closing costs for the purchase and sale, or realtor costs out of the alleged profit I’d make after four years of ownership (which is really bank ownership and my borrowship).

Did I just find a bad rent vs. buy calculator? Maybe. This one seems pretty good because it asks a lot more questions and involves a lot more financial nuances. I think the mortgage and realtor web sites that have these calculators have more than a little at stake in convincing us that home ownership is an “always””, rather than a “sometimes” wise decision.

Deciding whether to buy a really small, 8 trillion dollar Berkeley house that we won’t keep for more than 4 years, I found this site about homeownership myths useful. (Yes, it’s flawed, especially in not articulating why its title exists, but the financial blogosphere seems very threatened by its overall points. I won’t link to their nonsense. Geez. If someone arguing that renting is sometimes okay threatens your whole raison d’etre, get a therapist.) Even today, my SoCal realtor told me the interest write-off is a good reason to buy. Um, you don’t get the interest as a refund. It comes off our pre-tax income and therefore gets us about 15% of our interest payment back. Call me jaded, after selling in a down market, but I don’t always think buying is the best answer. Do the math yourself. Don’t use an online calculator. (And if you do, find a good one.)

(And don’t buy from liars who don’t disclose material facts that will keep you from selling at a fair price later. Seriously. But that’s a whole ‘nother entry.)

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Escrow

I’ve stopped cleaning now that we don’t have the wild beast known as the realtor-led-buyer wandering through our house every day.

It felt lovely for a day or so, but now the place looks like a hovel.

Thank you, lengthy sales process, for teaching that I actually like a tidy house.

Thanks, universe, for ensuring that we can’t afford someone to clean for us. Makes us feel all bootstrappy and pioneer-y. (Okay, not really, but I’m trying to look on the bright side this week.)

Rantlets: little rants of the day (iii)

Greetings, people within a few zip codes who are hoping to buy a house: I have a proposition for you. Buy my damned house. I’m tired of cleaning it, I’m tired of having bastards who aren’t you traipse through it, I’m tired of explaining to my son why we’re still here while Daddy is in San Francisco, I’m tired of lowering the price, and I’m tired of feeling rejected everytime someone who is not you says they’re going to write and offer then backs out when they find out all banks are people with DICKS who made a fortune at our expense and now won’t give anyone any more money, when they were practically cramming it down our throats before. They all suck. The other buyers suck. I like you. Please buy my house. Now.

Attention, ants: I freaking tired of this b*llsh*t. Get out of my house. Now. I’m tired of being all natural and organic with you. I know I carry out the spiders and the beetles and that one frog who got trapped between the slider and the screen, and I would willingly do the same for you if there weren’t eight hundred trillion of you. Plus, you freaking scurry any time I try to scoop you up. I’m tired of making little cinnamon and baking soda lines to discourage you, I’m tired of wiping down your trails with vinegar to confuse you, and I’m sick of telling my son that the new, last-ditch resort ant traps are “little houses” for you and your colony so you can “have your own house instead of using ours.” Eat the freaking poison, take it back to your stupid queen, and get the freak out of my house. You have the old oak stump, you have my cypress, you have the hose near the back patio, and you have the whole state of California to invade. Get the f*ck out. Now.

I decided today while we were out running that if you walk your dog by hanging onto its leash while you ride a bike, I hope someone pulls the skin off your big toes and makes you walk through lemonade for the rest of your life. How freaking dangerous can you be? Why not tie its leash to the bumper of your car and take it for a really slow drive? Are you so lazy you can’t walk with your freaking dog? Why did you adopt it, if you’re gonna be all borderline-abusey? Do you keep it cramped in a tiny apartment all day and then get pissed that the poor thing is full of energy? Why did you adopt it, if you’re gonna be all borderline-abusey? Are you convinced it needs to run but can’t be bothered to run with it or take it to a park where it can run with other dogs? Why did you adopt it, if you’re gonna be all borderline-abusey? Do you notice a theme, you borderline-abusey a**hole? Are you so out of shape you can’t even walk with a dog? Put down the Tw*nk*e, back away from the computer, and spend some time playing with your dog!

Hey, toddler. It’s a simple question. I’ve asked it four times. I know I could just pick one of the two choices and start doing it, and that you’d holler and choose the other and we could go about our business, but I’m tired of that game. Answer me. If I have to ask it again I’m going to lose it and you’re going to have to explain the ringing in your ears to your eventual parole officer, and I’m gonna have to answer to the other natural parents at our hippie granola meeting. So I’m gonna ask one more time, and you’re gonna answer. Got it?

Rantlets: little rants of the day

Hey, recycle professionals: I know life is hard, what with your being promoted from garbage man to waste management engineer. But you’re making enough money to break down the boxes for me. Seriously. I’m doing my part just by separating the twenty types of recycling mentioned in the eight-column spreadsheet you send us every year. “Please break down boxes” my ass. You do it. (Better yet, I’ll break down boxes as soon as you bastards start promoting composting as a way to eliminate billions of tons of waste every year…oh, wait. I forgot. You get more money when we throw stuff away. No wonder you want us to break down the boxes–so we can put more stuff in the can. Gotcha. Now that I know, I’ll change my answer: “Please break down boxes” my ass. You do it.)

Okay, people. This is easy. When you hear a siren, pull the fuck over and stop your car. Not slow down and look around. Not modify your trajectory a bit to the right. Pull over and stop. You selfish prick, there is an emergency somewhere, and since you’re too much of an a** to go help, the least you can do is get out the way.

Hey, parents of more than one kid at the playground: I’m sick of doing your job for you. Please pay attention to all your kids. You made more than one, so you really should parent all of them. I know that little one is cuter than the old one–believe me, I know, since I’ve just spent a freaking hour with your least favorite over here–but I’m sick of making sure the ignored and older kid doesn’t crack open her head, crack open my kid’s head, or drive me nuts with the ten hour stories you are clearly not listening to at home, since she needs to prattle on and on and on and on to me. If you don’t want to watch these spawn, hire someone who does.