- Real Estate
Difficulty of Real Estate Searches
All of my life I have made decisions that affect me, for a large part based on the desires of others: my friends and family want me to stay close; my friends say the prospects for boyfriends I have are in jeopardy if I take that job travelling. Naysayers saying “you don’t want to put all of your stuff in storage, do you?” Well the reality is, I should have done all of the above and had some more life experiences to pull from. I recently found a sentiment on Facebook, author quotedthoughts on Pinterest, which states:
Shake Things Up
I really believe in that. For me it is about all of the chances not taken. Had I put all of my stuff in storage, I would have travelled the world sailing for a year, and seen much more of it than I have currently. This life my fiancée and are living right now, is not the life we want: living almost paycheck to paycheck in a rental that costs us $2400 a month (outrageous). Well in order to get the life we want, my fiancée and I have decided to relocate. Where? Somewhere not in California, as we cannot afford what we want here. We both want waterfront property with enough space for our six+ vehicles, deep water access to put the boat in it off of our own property (hopefully). That is a hard ticket to find here in Southern California in an affordable range for us, so we are now gearing up to move to Louisiana.
So how do we discern what risks are involved for us in this move? Together, we (my fiancée and I) weighed all of the Pros and Cons we could figure out for us: But how do we figure this out? What kind of risks do we face? For a move like this… let’s look at the basic day-to-day and what affects you every day: friends, family, being social, where you live, where you work, necessary money to eat, clothe yourself, and stay healthy... and never mind all of the smaller incidentals: groups you belong to, activities and hobbies you engage in locally!
For this project, we establish the Inputs – my fiancée and I, the activities: project sizing (full move across country and all that entails), initiation meeting (my fiancée’s discussion with me), scope (again, a full move – everything that affects the life we have established currently), time (we established a timeline of no more than six months), cost (downpayment for a home, inspection costs, homeowner’s and flood insurance, earnest money; moving costs, travel expenses to go view the homes, and more – deposits for utilities may be necessary as well), quality (of everything – we want a decent home, we need good data to assess what we need to establish for this move, objectives – we know we want a waterfront property, and wish to keep working as we are currently (crossing my fingers for my current employer to approve it), tools (we need a car transport, movers, all moving supplies and accessories): reporting and review (my fiancée and I need to keep each other updated on any changes that affect our move in any manner to assess if the affect flows into any other aspect), definitions of scale (how is this defined? by our objectives, risk thresholds (for us, the main risk is finding and buying a home that ends up needing more work on it than we had originally thought, employment for me if I am let go), outputs (all of the answers to our questions and results of our endeavors on all fronts).
- Friends/Family/Social: Family would love us closer than we are now already. None of our friends live in the area. The few who we do many outings with may be willing to relocate, eventually. Everyone is sad about that. Plus, we are on a bowling league, and participate in many activities on a regular basis as participants.
- Housing: Rent or buy? We decided on buy… but how do we see the houses? A long weekend of house viewing is in order.
- Employment: Both of our positions are nationwide, so his is certain, but mine depends upon my supervisor, and company policy.
- The Physical Move: who likes moving? Sorting, Packing, Shipping, Unpacking – while still trying to be useful/useable for your basics. The vehicles: RV, Jeep on trailer, Boat w/trailer, five other vehicles (two to be sold). What tows what? We need a transport - when can he do it? Changing our addresses on everything we receive, or gets shipped to us.
- New Neighborhood challenges: not at all familiar with the area, except for the maps on Google and Zillow, and the US Coast Guard charts for the waterways available online (via http://www.nauticalchartsonline.com), new culture, new weather dynamics, and new state laws to abide by.
- Health Insurance: It used to be that you couldn’t get insurance with any pre-diagnosed conditions. At least now that everyone must have insurance that should be a little easier if my employer does NOT let me work from home.
- Hobbies and activities: We are “car” people – we go to shows, events, car cruises with our friends and more. We will miss all of that. California is one of the biggest venues for this hobby. We also enjoy the Renaissance Faire when it is here for nine weeks. We attend regularly, and this will be missed. Sure we can go visit once or twice on vacation for a week at a time, but it won’t be the same. We live fifteen minutes from the location now!
First on the list, we review the Housing issue. Oh what a task this is. Rent or buy? Well, that question is a little trickier… It behooves us to buy a house. But how do you shop for one when you live 1900 miles away from where you want to move? Online. So that works… sort of. You search and search and search. Find the perfect house, figure out its costs, then try to prequalify for a loan for that amount. For us, right now, we are sitting at a proposed cost of $200,000 for a waterfront home with a boat launch/dock, and a grassy yard for our dog. Now here is the real challenge for us. Getting qualified for that $200K loan.
Two weeks ago: My fiancée has been self-employed for three years; however, he bought out his business associate, and is now a Small Business Owner, but only for the last six months. So... from the Lender? We can’t even put him on the loan or factor in his salary as the rules have changed and he would have had to be sole owner for two years worth of taxes. From me? Oh dear. Fiancée’s salary is much higher than mine, and we were banking on that to qualify for the $200K loan we want. I send in all of my documents: W2’s the last two years, tax returns the last two years, bank statements the last two months. However, I am thinking we won’t even get near that $200K amount. The Lender pulls my credit. While my FICO score (your Credit Score used for any entities to rate you for approval for loans, etc) has been raised due to my due diligence on making timely payments; no late payments, getting my school loan statuses corrected on my report this last year (they were reported twice), and getting any errors off of my report. I qualify... but for how much!?!? Far less than the $200K. But wait, there’s more….. One week ago: I found the PERFECT house for us. Dock, land, garage, and a pool! $199,900. School Loans are in deferment, but were only reporting out to this October. In order for them to not factor into my payments, I find out they need to be deferred out for a year. Guess what? My perfect house… falls ‘Off Market.’ It felt like a knife to my heart. So I contact the loan provider, and yes – my school loans should be in ‘School Deferment’ with them, which is currently in progress for a date out to April 2017! Perfect! Even though we lost that house… our search continues. It could take a long while to find another that fits our needs in the area, and our price range.
The Perfect House
The Loan Process
Yesterday: I provided all of the school loan documentation to the lender, so now what do I qualify for? $270K. You can imagine my surprise. We now know what the payment and insurance will be, and it is far less than the rent we currently pay already. Win-win. An article I found by Suze Orman1 states that your “…housing budget should be low enough so that you can afford to make progress on all your other important financial goals.” With that in mind, we are ahead of the game, with the mortgage payment and insurance being half o what we are currently paying now, and we are still able to save.
Alright, so one HUGE obstacle is down. With all of the documents I provided, that not only gets us the pre-qualification letter (already in my hands), but also gets us funding approval already, which is a Buyer’s advantage over another buyer who may or may not get funded. In a situation where a Seller gets multiple offers, this could be a huge benefit for us. However there is another point Suze Orman made in her article2, that I absolutely agree with: we will not compromise on the Home Inspection Contingency. Suze states one huge mistake Buyers make is ”Making a Bid That Waives the Home Inspection Contingency. In some markets where demand is high and the inventory of home sales is low, some prospective buyers make offers that waive the home inspection to make themselves more appealing to sellers. That’s insane; if there are major structural or mechanical issues you could be in for tens of thousands of dollars in added expenses. A smarter move is before you bid, shell out the money for the home inspection. If your bid isn’t accepted you’re “out” the cost of the inspection. But that’s smarter than winning a bid with no inspection and then being hit with a slew of problems later on.”
The Job and More
Next item? Employment. I mentioned above that both of our positions are nationwide. He works in a service delivery field for security/retail sales processing equipment for several large chain companies. He has technicians on both coasts, in the Midwest, and more. The only aspect that will change for him is that the area in which he personally services the locations, will be around our new house instead of here in SoCal. For me, again it depends on many factors that are out of my hands. My supervisor has to decide to allow me to work from home. I work for a Cable provider that does not have a presence in the state we are choosing to move. I feel my supervisor will not be able to approve this, as if she opens it up to me, she would need to open it up to everyone on our nationwide team (we physically sit in five different cities throughout the nation). While I have a home-based business, and have a faster than usual Internet speed, and have a home office and the capability to work from home with efficiency – I know there are others on our team that would not have that advantage or work ethic.
Next item? Friends/Family/Social: His parents and mine are retired, and travel extensively – they would come to visit. The area we want to move is a tourist attraction, so all of our friends would most likely come visit at some point as well. The reality is that we currently see the majority of our friends and family on holidays and birthdays. That may not change – we will only be a short flight away instead of an hour’s drive. Family? Check. Friends? Check. Yes we have even closer friends we do many events with, and I will be saddened that they aren’t immediately around us… however, some have already expressed thoughts along the line of going with us, even if at a later date. Close Friends? Check. We even offered to put up our friends while they build something after purchasing a lot near our new home (once found).
Next item? The Physical Move. As I said earlier, we have a lot of vehicles that need to be moved/transported 1900 miles. Now a couple of them may end up at a storage facility, but that is not our hope. The house we are in now is a three bedroom with a two-car garage/storage and a lot of stuff. We currently cannot park cars in the garage due to its being setup as a workshop and the amount of stuff stored in it. That is a lot of stuff. We need to sort, sell, donate, etcetera to whittle down to what we need, and what we want to move to the new house. Packing it all up… now we need the necessities: boxes, packing tape, paper for wrapping, markers, and a clear area to start stacking them up for the movers. We also had to review some other laws for the state due to one of our hobbies: firearms. This aspect is a huge responsibility, and needed to be reviewed prior to entertaining wherever we wish to end up.
Lastly? New Neighborhood challenges. We won’t know anyone there, won’t know the streets or the city layout. We cannot really ‘get-to-know-the-neighborhood’ until we move out there - which is also one huge disadvantage to choosing a home remotely. We did entertain renting a house for a year or so, but we dislike moving. Who wants to do it another year later?? Do you leave your stuff packed? Go without your hobbies for a year? That could be miserable. However, it could be done. You could just fill in your time with getting to know your neighbors, the same article from Suze Orman’s website: http://www.suzeorman.com/blog/four-expensive-home-buying-mistakes/ neighborhood – the more accessible activities and hobbies. Most importantly, in the past, when I wished to select a new home, and was local enough to drive there easily, I would visit during the day: morning, evening, nighttime - and more, to see what the area is like prior to moving into it. We do not have that luxury for this move. At most, we will take an extended vacation, and schedule some house viewings with our realtor in order to make a more educated offer.
All in all, we are approved for funding for a loan, and we are now searching for a home. Our revised goal is to just get there. Once we are there, if we hate living in the house we choose on a day-to-day basis, we can keep looking and rent that first house out once we are able to add my fiancée onto a loan for someplace else. At least at that point, we will be local and be able to actually go visit and drive the areas to find the neighborhood we really want to be in, which has been a difficult part of this process, being as remote as we are. That will start the next phase of our business – property ownership and management!
The Rabbit Hole of the Internet
However, we have to find a house first. And that, my friends is where the rabbit hole appears. Of the scams of the Internet! "Call us today at 888-888-XXXX we have your dream property! Well, if you just send us $1000..." to this address in Nigeria. No, thank you. Also, while the data is *supposed* to be fresh on all of the realty websites, driven by the MLS, it is not always so. I have had a few disappointments so far where I think I have found the 'perfect house!' and then it falls off the market, and is not really available. In some cases I think that the realty company leaves it a little while due to a number of reasons - the 'look we sold it!' aspect and the 'we can help you too!'
It is disappointing, to say the least. Plus, in addition to the stale ads, you have the oh-so-misleading labels such as Waterfront on a house that is NOWHERE near water. Oh you mean the neighborhood is called Lakefront? Really. Where is the lake?
Also, as I said earlier, we are car people. We need room for an RV, a boat, a car trailer, and 5 other cars. This could take awhile. Not many of the listings I have seen focus on the parking on the property. We may need to move twice to find what we really need.