Home Sweet thewallsareclosingin Home
Ever since we moved here, we've done weekly real estate scouting missions - but weren't looking seriously until recently. We watched as the market kept dropping, knew the minute any new home came on the market, figured out our preferred neighborhoods, watched what prices houses eventually sold at, and on and on. One house had been on the market almost since we moved here, and we would drive by it occasionally, calling it "our house" - but it was out of our price range. It backed onto open land and had a fantastic view of the Sierra - our dream home! But it was out of our price range. We watched as it stayed on the market, unsold, month after month, and watched as the price continued to drop. But it was still out of our price range. Finally, a co-worker of Devin's, who is also looking for a house, looked at it, and we realized it had dropped even further - still out of our price range, but maybe close enough to make an offer! So we called the realtor and broke our pattern of only looking at the outside of houses, and dove into real house hunting.
That house was amazing - great porch with hot tub and views, open ceilings in the kitchen/living/dining great room area, office off of the great room, and the owner is in construction and does tile work, and it had all tile floors, the kitchen was HUGE with gorgeous counters, a huge gourmet stove/oven, custom cabinets, and the bathrooms - walk-in showers that were beautifully tiled, granite countertops... and it had a "seasonal stream" in the back yard! It was really just an irrigation ditch, but I started designing a dry creekbed for it that would have water in it part of the year - how awesome! Okay, we were in love.
We realized that we needed to pick a realtor, and since I'd been emailing back and forth and using the updates of a different realtor in town, we went with them, and went back to look at the house again with our new realtor. We jumped right in and made an offer! The owner took the offer to the bank to see if they would do a short sale! Everything seemed to be going our way - we were going to get an amazing house!
Then, somehow, the owner got a loan from the bank or refinancing or something, and decided to take it off the market. We were heart-broken. We kept saying, "good for the owner" though, since he built the house himself, but it's not like he didn't want to sell it - it had been on the market for at least six months at that point, maybe longer. Our realtor thought maybe the house was never really for sale, after all - maybe the owner just wanted his bank to agree to refinance and used the short sale offer to make that happen. Oh well, either way, we didn't get the house.
We kept looking, though. Every house we looked at fell far short after that one. We looked in a similar price range to what we had offered, but we had offered at the very top end of what we felt we could, and it would have been worth it for that place. For these others, it didn't feel worth it. The next period was one of adjusting our ideas about what we could have in a house, and sort of "values clarification." We started to feel like we were being unreasonably picky. But it would be our home and so shouldn't we be picky? We started looking at houses that were much less expensive, and they started looking better. Then we started thinking of it as more of an investment than our dream home. We could have low mortgage payments, and afford to fix the place up and then maybe later, rent it out for more than our mortgage payment while we bought our dream home. Or traveled. Or moved.
Now we are waiting to hear about a home that doesn't have a view, is in the middle of a fairly boring little tract (only 3 streets), and needs updating. I call the style, "mid-century boring." There is nothing about this house that we love, but nothing we hate, either. And it has potential. And it is $100,000 LESS than our offer on our dream home.
We are ready to be out of the RV, too.
This house is a short sale, and so (ironically) making an offer on it leads to a long process as the bank has to approve the short sale. A short sale is basically faster than a foreclosure, and originated by the seller instead of the bank. The seller in this case was up to date on their payments, but it was killing them and they wanted out. They bought the house in 2007 for $372,000. They are selling it for $249,900. They had tenants in there paying $1800/month, though, so hopefully they had help paying most of that mortgage. But they were likely very upside down on their mortgage. We hope to avoid that, but the market is still dropping like a rock. Last month, Bank of America's Cyberhomes website valued this house at $282,000, and this month its estimated value is $244,521. (Where do they get the $521?) So now our offer is no longer below market value. And we expect it to keep falling in value, but we hope not too much farther. We hope.
It's scary, though!
Since we made our offer on this place, another house came on the market on the same street as our dream house! We went and checked it out, but it is a mess. It is a foreclosure, that is "bank owned," but in this case, the bank is the previous owner that did seller-financing. It needs major renovation, and likely to need some major repairs (a tree fell on the roof, for example). We made an offer on it that was much lower than what the seller was asking, and they said they'd accept if we would take over the eviction part, and basically take ownership with no inspection (because it's such a mess with the current people living there, there is no way you could do a thorough inspection), and also if we financed through him at NINE PERCENT. Holy crap! We have good credit and decent income, we don't need loan shark rates! We will be able to get something at less than 5% when we get our mortgage, easily! So, no thank you.
Click the link to the album for some photos we took of the house - you can tell it has really been neglected and probably there are many more things underlying the appearance that need fixing... but the views!
We looked at it again, and I drew up a bunch of pictures of what we could do to it, and we decided to make another offer - more money, but the seller fixes the roof (or credits us) and is responsible for evicting the current residents and lets us get a real inspection and our own loan. Sale contingent on inspection and loan. He came back with a counter offer, no more money, but again with making it hard for us to get a real inspection, and remove the loan contingency after a set period... and a non-refundable $5,000 deposit. Ugh. We really like the view, and the potential of this place, but it's really a big mess and feels like such a risk, so not being able to get a proper inspection is a real deal-breaker. Sadly, we didn't respond to his counter-offer.
So now we are waiting to hear on the mid-century boring tract home. The first mortgage holder accepted our offer, but the second is now haggling with the first over how the money should be divided, and in the meanwhile, the estimated value has dropped $43,000. I want a house, but maybe we should wait. Maybe, after all the work our realtors have done working with the banks on this short sale, if we get our offer accepted, maybe we should back out.
Cold feet, nerves... and fear. With a potential depression looming, should we really be buying a house? And a house we don't love? Sure, we can plant a victory garden in the back yard and lay in firewood and such... but, will the housing market drop another $100,000 here? There aren't that many homes here in Bishop. It's a small, small town. And isolated. The nearest city of any size is 3 hours away. So it's not like those towns where they have entire neighborhoods of foreclosures sitting empty with spray painted lawns. There's not a glut of homes on the market at all. If enough businesses close and people have to move away, though, there could be.
All of these things and more go through our minds while we are waiting. We've been watching so much HGTV it's ridiculous, and reading This Old House articles online - we have lots of ideas for fixing it up! But we want to be careful not to over-improve, and to keep within a strict budget, and choose upgrades that will actually increase the value of the home.
We should find out this week if our offer was accepted, and then we have to decide once and for all if it's really what we want to do. Or if we tough it out in the RV a little longer and wait for prices to drop further, or something better to come along. Or make another (probably lower) offer on the dump with the view...
This buying a house stuff is hard work and nerve-wracking!
