Expert: Lisa Webber - 9/30/2009

Question
QUESTION: 1. What is the most expensive house out there so far?
2. What house should I own?
3. What factors determine buying a house?
4. Beside owing a house, the next most expensive things to own is a car, then following by stuff in houses, and then I guess utilities?



ANSWER: Hi Henry,  

1.  What area are you wondering about?  Dunellen Hall in Connecticut I believe is the most expensive home in the USA and has recently been marked down from $125 million to $75 million.

2.  I can't answer that without knowing a whole lot more about you and what you like and don't like.

3.  Your income, your current debts, your credit score, commuting distance, neighborhoods you prefer.  Those are the big factors.

4.  It depends upon you.  I know people who have spent more on their boat than on their home.  I would think for many people it would be home, then car, then items in the home (computers, TV, furniture, etc.).

---------- FOLLOW-UP ----------

QUESTION: 3. the third questions mean what factors determine owing a house that you can be content about: such as style, color, structure, what in it, etc. comfort, etc. those things.

2. What is the most that people usually spent on: their children right, then maybe house, then car, then home stuffs, then trips, etc.  

3. What is all the expensive add up to and how can you be sure that by purchasing that you will be saved?

4.  I am planning to get a car or motorcycle for $2500, but I do not know if I am capable of owning one.  Do I need to worry most about what: car breaking down and needing to fix it or insurance?

Answer
3. That is a hard question to answer.  Some people use their home basically as a place to eat and sleep because they are more into outside pursuits including working and traveling. Others use their home as a sanctuary and like it to be a place to relax.  Other people like to have entertaining space so they can have family and friends over.  

2.  There is no way I can average out expenses because they vary so much.  Some people send their children to private school which adds to their costs, some go out to eat frequently, others only cook at home and bring their lunches to work and school.  Some people buy designer clothing and others go yard saling for their clothing.  There is truly a wide variances on expenses and I'm sure it will change from area to area.  I live in a very high cost area where people spend a lot of money on homes and cars, eat out a lot, buy designer clothing for their children, etc. (DC area), but there are other areas where average expenses are much less.  I hear a lot of people like to retire to North and South Carolina or Florida where housing and other expenses tend to be lower.

3.  The biggest advantage to buying rather than renting is tax savings and future appreciation.  Home owners on average have a higher net worth over time than renters do as most people's largest chunk of money comes from home appreciation.  You would want to discuss your particular situation with a tax adviser to determine the difference between buying and renting.

4.  You would need to be concerned about insurance costs as well as repair costs when owning a car or motorcycle.  When purchasing a motorcycle you also need to be concerned about the danger factor.  If you are planning on purchasing life insurance, that is one of the questions they will ask you, whether or not you own a motorcycle or have a motorcycle license.