The Trials of Purchasing A Home in Today's World
We are buying a home, or are we?
For the past year, we have attempted to purchase a home in the area we now live in. We moved here a couple of years ago and rented a home in order to really research the area before spending our hard earned money on a home. In the past, we owned homes, getting a loan without batting an eye: no more. The hoops we are jumping through, the heartaches we are experiencing and the lessons we are learning are frustrating us to the extreme. Read on and learn from us before setting out on your own journey into the housing market.
House #1, Overlooking the lake
We began this journey to purchase a home in the vicinity by using our heads. How old we were, our income, family requirements all played a part. Cost, of course, played a key cost but not so much as I thought it would. Location was a primary factor including distance from work, what school district, and cost to drive to and from each including both a financial cost and a time cost. Years back, we had a beautiful home on an acre complete with an in ground pool and huge garage/work building but with me working an hour away. The price of oil skyrocketed and we panicked, fearing the cost of my drive would cost us in the long run with the house so, we sold it. We have regretted making that decision ever since.
So we began to spend hours online looking at homes in our vicinity with a set price in mind that would allow us to pay it off prior to my full retirement, close enough to both work and school for our youngest, and with something to pique my wife's interest as you know: ain't nobody happy if momma ain't happy.
We found an absolutely beautiful home online one Saturday morning. It had literally just hit the market that morning and my wife was one of the very first to view it online. We immediately called our chosen realtor and had him set up an appointment for that very morning. He was a bit put out but did as we requested.
After seeing it online at 8:00 AM, we had an 11:00 AM viewing. We would be the first to see it in person. Once we arrived and walked around the outside, I had a good feeling. My wife did as well, and once the realtor arrived and let us in, we quickly decided it was perfect. Woods behind, on a hilltop overlooking the lake, a dead end road: perfect. We began talking money, what to offer. The asking price was $98,500 for the three bedroom, two bath 1,300 sq. ft. home. The realtor told us to offer $89,000. I looked at him with concern, thinking he was joking but quickly realized he wasn't. He really felt that would be a good first offer.
I don't play games, and I told him so. After a few minutes of talk between my wife and I we settled on a number that was between what I thought was a good offer ($105,000) and what she thought ($100,000). Our offer was $102,500. He shook his head, and we headed back to the office. Once there he tried to talk us out of the offer, saying it was the first day and they would be eager to sell quickly. We told him that this nice of a house in this area will sell quickly, I predicted by Monday it would be gone. He disagreed, saying his 25 years of experience told him it wouldn't.
He was wrong, I was right. He called us that very day to say someone else had gotten the house with a substantial cash offer; we weren't even in the running. An over-asking offer and we weren't even considered. Made me question his knowledge, let me tell you.
House #2, A-Frame
In April of this year after many more days of searching and many, many hours online attempting to locate a house that suited our desires, we had settled on another home which happened to be an A-frame home near a lake in our vicinity. At just over $100,000 it was near the top of our comfort zone regarding what to pay and how long it would take to pay it off prior to my full on retirement. Without dipping too deeply into savings we could pay it off in a decade or so per our estimates. We contacted our realtor (same guy) and saw the house. It was cute, it checked off most of our key points we had decided on and we signed the papers. A just below full price offer as the house had been on the market for over 100 days and two previous offers had fallen through. The owners lived out of state and were motivated, we were told.
Offer signed, a bit of haggling and then acceptance. We began the journey to own. After four weeks we received the news: I had not been at my job long enough to qualify for the loan. Because this job was different from my previous employment all the prior years working (over forty!) was discounted and only the current one would count. You have GOT to be kidding.
And so began the process of backing out. Because the loan was denied we felt we would be getting our earnest money back, but not so fast. Because the owner had done some work to make the house meet the guidelines of the loan requirements, they were less than pleased to lose this sale. They refused to sign the release of our earnest money and we were forced to take them to small claims court to try and gain our money back. After a filing fee and a month long wait for the court date we got our day in court, only to watch we the judge sided with the owners. "Why?" we asked. It turned out to be a clause in the contract which allowed 25 days for gaining the loan had expired and our realtor and financial people had failed to file for an extension. They had failed their job and we were out a substantial amount of our spendable capital, which would influence us moving forward. This, combined with the appraisal and associated fees cost us a full month's wages. This was akin to throwing money off the bridge into a chasm: it was wasted money, money we would never get back.
House #3, Small But Opportunity
We received the timeframe associated with when my job would qualify for a loan and waited. It wasn't long, just a couple of months. We began searching once more and eventually found a house that offered a unique opportunity. It was small, only about 500 square feet. one bedroom one bath but was in a lovely location, was new (only two years old), a log cabin, on a creek and with a very large deck. The county does not have a restrictive building code so I would be able to build in the deck to create another bedroom, possibly even a bathroom so long as I did not extend beyond the current footprint of the home. In other words, as long as I contained everything beneath the existing deck roof I was okay. Then, I could pull a permit (or not) to build another deck even closer to the creek in the backyard. Perfect! One more caveat: it was about half the price of the previous home. Even better!
So, we made an offer. Things progressed nicely until... another hitch. Turns out that because we had a bankruptcy (huge medical bills that weren't covered by insurance on a trip of mine to the hospital were the reason we filed) in the past three years pushed us out of contention for a loan. This time we did get our earnest money back and before the time had elapsed necessary to allow us to get the loan (again, a couple of months) the home was sold. We were left standing on the road once more.
So, to recap: First house: outbid. Second house: job time (by two months). Third house: bankruptcy time (again, two months). Total amount of lost money due to inspections, appraisals, earnest money and such: in excess of $5,000.
House #4, A-Frame Near The Lake
When the time frame we needed had arrived we began again. This time, we focused on an area that was being renovated. Former rental cottages being flipped which were in a beautiful area near the lake. Another A-Frame, three stories completely redone. A very small lot but the opportunity to possibly purchase three additional lots adjacent to it for a pittance (tax sale, we were told) made it attractive. A new realtor we met at the home after looking at it from the outside three times. Inside was very nice, yet it was not finished completely. We were told the owners were flippers, lived four hours away and would dedicate the time necessary to finish it in time for an inspection. So, we tried again.
We made the offer, slightly below asking due to its being on the market for three months with no bites. We also told the realtor, who was representing the owners, that this was our only offer. We were not playing games, this back and forth that all too often occurs. We would not be doing that. She presented our offer then called back with a counteroffer. She literally did not listen to what we told her about games and so we told her no thank you. The next day she called back asking us to reconsider; we declined. Then began the barrage of calls and texts asking us to come back to the table. What we later learned was that she did not even take our offer to the owners, instead playing the game on her own with us in order to gain herself a few more dollars in commission. In doing that, she lost.
She got what she deserved and I hope the owners drop her like a hot potato for costing them a sale.
And Yet, We Soldier On.
After this last disappointment I was ready to give up. Thousands of dollars lost not to include the hours and days of searching, miles driven and time spent looking at houses anywhere within forty miles of where my wife and I work and countless stress induced time spent worrying over this and that. But my wife, even though disappointed, made me realize that where we are currently living, while nice, was a rental and the owner could sell it at any time (they are old and not looking too good regarding their health) and we would be left in the cold. And so, on we went.
Now, we have found another home, another A-Frame. It is nice, we can see the lake, and is a very reasonable price. Another house that went on the market, my wife found it the next day (she almost lived on the home for sale sites) and we made a full price offer which was accepted that day. Yay!
Once more we began the process but this time we were prepared. Before settling on this house we had contacted a lender and laid our souls bare. We told them everything and informed them that we wanted our information to run all the way through the underwriters to verify that "Pre-Approved" meant "Approved all the way with no possibility of finding a problem that would deny us a loan". And they did just that. They took it to the underwriters, they processed it with an amount we would be comfortable with to spend and we received the go ahead. Nothing to worry about, full steam ahead.
House #5, A-Frame on Lake
This A-Frame is slightly different and a combination of the last three homes we attempted to purchase. An A-Frame, like the other two yet lower in cost and with possibilities we could exploit with a little elbow grease, much like the little log cabin. Two bedrooms, one bath yet with some planning, work and capital we can expand it by 20% in living space fairly easily. And at a low cost. So we made an offer which was accepted and the paperwork begins again.
Then, more snags. The inspection turns up very minor things to fix, total cost maybe $100. No problem. But a concern was noted and the owners took it upon themselves to get ahead of a potential problem with the septic tank. They decided to replace it. This was not asked for nor made mandatory, it was simply a notice of a future potential concern. And yet, they tried to fix it properly. They contacted someone and at their own expense are putting in a new one. But it is to be completed the day before closing and the inspector might not be able to get out there in time to verify all it well.
Then another shoe dropped. Now my wife hasn't got enough work time to qualify. She has been a stay at home mother for years raising our children. She is working now as all but one child have grown up and moved out, but hasn't been there for the two years they require. She attempted to use a former work history to qualify and we were told that would be fine...until the school district she worked for was unable to locate her files. Sending in tax paperwork, a copy of a paycheck and even her badge complete with picture wouldn't settle the underwriter (I thought we were good?!) and so the decision was made to use only my work for the loan. This is one week before closing, mind you.
Then we get that approval only to find that now the underwriter wants to know who owns the road in front of the house: is it private or state/county owned? Believe it or not, no one seems to know! Closing is less than 24 hours away and we still do not know if we are going to close, all due to this single question: the road.
Can you believe it?
And so, we wait.
Tomorrow brings us the answer of whether we will close on time, or even at all. I am tired, I am done. If this doesn't work out I do not know what we will do.
I wrote this just to give people an option to read this and learn from our trials and mistakes. Forewarned is forearmed so to speak. Do not go into the purchase without having known and learned something that will prevent you from following our pathway to our home.
I pray this will help someone out there, Good luck.
And the answer is: the Daily Double!
Believe it or not, the realtor and the home owner "managed" to "find" a way to get the road issue eliminated. We kind of feel like the old military here, don't ask, don't tell. Anyway, this issue was resolved at the eleventh hour only to have another immediately raise its ugly head.
The house has a shared well. the FHA loan we applied for will allow four houses on a shared well, this one has five.
Are you @$!%&^ kidding me?!?! This was literally the hour before we were to sign the documents. One hour. The realtor said we could apply for a conventional loan (if we wanted to do that we would have done it to begin with. The FHA had perks we wanted.) We told him no. He tried to insist, gently then more forcefully. Look, we set this closing date for a reason, we chose this loan for a reason. We will not force a square peg into a round hole here.
This time, we only lost half of our earnest money. The loan company which was processing our loan broke the law by doing this (it states it clear as day on the application that this is illegal) but we are bone tired and fed up: take the damn money. We have no fight left in us and will just tally it up to experience. Again.
I am sharing this information with you so that you might learn from our experiences. They are vast, they are deep, they are hard. I pray you do better in your search.
© 2018 A Voyce