The Pain of Defeat

I found this while collecting memes to tease a coworker of mine whose wife is having twins. The image seems well suited to the home buying market.

I found this while collecting memes to tease a coworker of mine whose wife is having twins. The image seems well suited to the home buying market.

I was distracted all day at work, waiting for 7pm when the offers were officially due, knowing that it would then be another hour before we could expect to hear from our real estate agent.

We were completely shocked when she told us we were one of five on the shortlist, out of 14 potential buyers. Now they wanted our highest and best offer by 9pm. After the realtor hung up so we could think about it, we didn’t talk for long. We’d already known what our highest limit was, taking into account how much a down payment would hit our savings; the added costs that go with closing, moving, and actually owning a house; and the lifestyle we wanted to live, which required occasional travel, tickets to shows, and dinner at a nice restaurant from time to time. We had figured out long ago what number we were comfortable with, so we called her back with an offer only $5K more than our original.

That next hour was going to be torture. I called a friend back home, an artist with a wife, kid and another on the way. He is calm, intelligent, and rational, and we have a record of always talking for roughly an hour whenever one of us reaches out. Also, he is a homeowner and a great conversationalist so I knew I could count on him to distract me.

By 9:30pm we had the news. We’d lost the house. To be honest, we already knew we were going to lose because someone had to offer more than us. Just as planned, we began talking about how great the next one would be. How this one was just too perfect for us. We needed a house that was a little scraggly like us. What were we going to change with this one? The paint? No, the next house was going to be a project, something for us to work on and improve together.

“It’s going to feel like you’ve been dumped.”

My friend gave me great advice. He said, “It’s going to feel like you’ve been dumped.” Meaning, none of the next few houses would be good enough. And he was right. We some some really sad houses, including one that we jokingly referred to as the B&E House because it was unlocked and unoccupied when we walked in (and every corner we turned we expected someone to come out screaming at us to get out of their house). We also saw several depressingly beautiful homes that were going to go well past our high bid. Still, a string of losers made us ready for the next good house that came along.

It was a surprise. We were going to see another that day and I noticed this one, as well as a couple others in our price range, show up on the MLS in the morning. Our agent was able to get us into just one, and we were going to have to accept missing the other two because we would be in New York the weekend they were holding open houses. Either way, it didn’t matter. The first house we’d planned on seeing turned out to be totally wrong for us. We found the layout awkward and couldn’t get past it’s lack of closets or outdoor space.

I wasn’t feeling particularly hopeful about the next one. The listing only had a few images, and we had to wonder why the price was so low. There were none of the typical indicators that this house was best suited for Contractors, or mentions of elbow grease or TLC in the listing to warn us of major work being needed. It did, however, say the house came “as is.”

More on our next offer in the next installment 

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Playing the Game

Not the house. This is the smallest house in Savannah, Georgia.

Not this one. It’s the smallest house in Savannah, Georgia.

After a few weeks of searching, we finally put in our first offer on a house.

This one is fantastic! It meets all of our criteria and has several little touches that make it perfect for us. We sat with our real estate agent and settled on a number, picked out key dates, and signed our names. This morning I wrote a heartfelt letter to the homeowners, explaining why my husband and I are the right people to own this house.

Now we wait…

My husband and I recognize how much of a long shot it is to get the first house we try for. Cash is king, especially in this market, and that is something we do not have a lot of. If we tie with the highest bidder, we’ll likely lose because of our low down-payment. No letter, no matter how much it strokes the ego of the former homeowner and assures them that the house will be well taken care of, is going to beat the all mighty dollar.

We know this, and we are preparing for the inevitable heartache of losing this house. I’ve put together a list of every negative I could come up to act as a salve. If our offer is not selected, we’re going to have to jump right back in the market and see many more houses. It will mean more weeknights and weekend days taken over by the hunt. My only solace will be that list of problems and the knowledge that, no matter what, another “perfect” house will come along.

Next up, the results

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Getting the Finances in Order

Best sight ever!

Best sight ever!

I finally did it. I paid off my student loans, and I am now officially debt free! Cue confetti and horns, a congratulatory message from my loan company’s…nope, just a reminder on the website that I can continue to make payments if I so choose. Thanks, but no thanks.

My student loans have weighed on me since I was a teenager, so I’m a little bit out of sorts about no longer owing money. I am thrilled to finally be through with this expense, and I am proud that–aside from a couple checks my dad wrote for my self loan when I was still in school and he didn’t know I’d received and paid the same $125 bill–I was able to dig myself out of debt completely on my own. I started out with one large federal loan and five smaller self loans. Those self loans had to go first, so I consolidated and paid as much every month as I could afford. Five years ago, the private loans were gone, and it was just me versus the federal loan. I took what I was sending to the self loan and added it to my monthly payments for federal, increasing the amount as I found better jobs that paid me a higher salary.

Step #5 (Should be Step #2) Know Your Budget

When my husband and I started talking seriously about marriage and buying a home near the city, my main goal was clearing out the balance and building up my savings to cover a down payment. Last spring we’d visited our bank to get pre-approved for a home loan, and the number we were given shocked us. Because we both have good credit, the amount was higher than either of us expected. We calculated the minimum down payment required for a house in the range they told us we were qualified for and realized that unless we wanted to completely upend our lifestyle we needed to lower our price range and expectations. My husband signed us up for the first-time home buyer’s course, and we figured out a realistic price range for a house that could meet our needs.

Using that number, I calculated how long it would take me to pay off the remaining balance if I raised my monthly payments, and I set up an automatic transfer from my checking to savings account to build up enough money for a reasonable down payment as well cover moving costs, household purchases, and an emergency fund. We developed a timeline and decided to start our house search fresh in the new year, after my loan was paid off and we’d made it through the dreadful Boston winter.

When we went back to the bank this spring, we had a more realistic number we wanted to be pre-approved for, and that’s the number we gave the lender. Little did we know, this plan would immediately backfire. After reviewing our notes from the first-time home buyers class, we realized that the loan our bank could offer us was the one we were expressly told to avoid, then our real estate agent suggested we reach out to lender with a better reputation, and now three of the last four houses we’ve visited were priced higher than our pre-approval would allow, negating any chance we could place a bid.

Knowing the market as it is, we’re trying to be smart about how we approach this intimidating purchase. We know the dollar amount we are comfortable with, but given the speed in which the few houses on the market are being snatched up by desperate buyers, we need to give ourselves an opportunity to climb into the ring when we find a place worth fighting for. Our game plan is to find a house that doesn’t appeal to the crowd that wants to move in right away. This means dated interiors and hopefully ugly listing photos that drive away prospective buyers. Still, it’s hard not to be tempted to throw in a bid for a house like the one we saw this week, one that could be perfect, but will cost us more than we are currently able or willing to spend.

Up Next: We Make Our First Offer

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Touring in Style

I’m writing this post the morning before we head out for our second round with the real estate agent. This story takes place last weekend, when she picked us up and took us on private showings of three different houses. Upon meeting us the weekend we drove ourselves around to the open houses, she said we’d never have to rent a car again as she’d take us to any open house or private showing we wanted to see. That is such a bonus for a buyer without a car.

Lesson #4 – Let the Real Estate Agent Show You Around

The first place we visited was a townhouse, sold “as is.” The townhouse we were there to see, which was in our price range, was unrenovated with winterized plumbing and uncovered fixtures. We stepped gingerly through the unit on rickety floorboards and dingy carpets, up and down shallow, uneven steps, and into the unfinished basement where we had to duck to avoid low-hanging pipes in the basement. It was here that I was reminded of the first rule when touring a house, dress for the occasion. I’m already very tall so adding in 1/2 inch heals and sending me into old homes and over icy driveways in boots with no traction was a recipe for disaster. In fact, the seller’s agent commented on how nervous I looked going down the steps. I blamed it on the small stairs and my large feet (size 11), but the heals are staying home next time.

We went around to visit the adjacent townhouse, which was partially remodeled and also for sale, for $50k over what we could handle. Our agent quietly pointed out the cheapness the new kitchen cabinets and other fixtures. While was interesting to see what could be done with the unit in our price range, we could tell immediately that this was going to be way too much house for us and that it would take, at minimum, if we did the majority of the work ourselves and relied on my connections with the architectural industry for advice, contractor recommendations, and materials, at least $40k worth of work before we’d be able to live in it.

The next place we looked at was located in the same area as the first house we fell in love with, the small home I feared we let get away the week before. The asking price for this house was at the high end of our comfort level, and it was represented by the seller who managed the open house we tried to visit two weeks earlier that drew so many visitors we gave up without ever going inside. This told us that no matter how much we liked the house, we were not going to get it. Still, we wanted to see it, and we were glad we did. It looked just like the stunning photos used in the listing, we could tell the home was well-loved and required little to no work to move in (the owners made such thoughtful improvements the most we could see changing was the color of a couple walls), the asking price was only slightly below the max amount we were willing to spend, and in this market we were positive there would be an immediate and expensive bidding war. We were right; the sale is already pending.

Finally, we came to the house I would tell everyone about at work the next day. This house was located in an area we’d never been to before and had the most delightful and terrifying amenities. First, because it had been empty most of the winter, the deep snow sat untouched so we had to walk across an inch thick slab of ice to get to the door. Inside we were greeted by a dated kitchen and views from the window of a busy commercial road with an outlet mall beyond. We chuckled nervously upon seeing four locks on the inside of the front door. Egads, what went on in here. This would not be the worst.

Exiting the kitchen into what appeared to be a living room, we were greeted immediately by the stench of cat piss. A lot of cat piss. When I was a kid, we adopted an adult female cat from one of my high school friends. We knew this cat was shy, but it didn’t take long for us to figure out that it must have been abused. If someone raised his or her voice around the cat, she would immediately pee. My parents had a somewhat volatile relationship, never violent, and there was a lot of yelling in our house, so I lived with that smell for a long time. She was just one cat, and I still have trouble visiting my parents because the smell is still present more than a decade later. However, this was a home that must have hoarded several improperly cared for animals. My husband and I have two male cats in our apartment, and we knew right away that no matter how much we cleaned and disinfected, ripped up and replaced, that the smell would still be detectable to them. It would not be a good situation.

The fun continued and the smell got worse as we traveled deeper into the house. We saw more locks on the outside of bedrooms and leading to the second level, encountered two safes in different rooms (one a badass large safe), and the grand finale, a server setup in the basement. Later I would look the address up and discover the place was just a failed data retrieval business, but it was more fun to suggest nefarious activities, such as offshore gambling, went on inside. I saw a door down in the basement with a hole cut in the bottom, large enough for an animal. Our eyes all started to water when we opened the door to reveal the source of the strongest odor, the room where all the cats must have lived.

This is a photo from the Neon Boneyard in Las Vegas

This is a photo from the Neon Boneyard in Las Vegas

I’m all for a house that needs work, but this was too much. Structurally, it seemed fine, and surprisingly the exterior and the roof looked great. However, the costs to make this place work would bankrupt us. Someone had messed up both of the fireplaces (I feared what an inspector would say), all the carpets and floorboards would need to be ripped up and replaced, and, despite the convenience, our real estate agent strongly suggested we might not want to live right next door to a gas station. The final nail in the coffin for this house was that it was a foreclosure, which meant auction, which meant a lot of factors we didn’t really understand as first time home buyers.

I’m trying hard not to be discouraged. Not counting our year of procrastination, we’ve only been at this for three weeks. We’ve been to six houses so far, entered five, and today we are looking at four more. This is the beginning of the season, which started late this year because of Boston’s ridiculous winter, but I still know the real estate market in this area sucks due to the large number of buyers and a low inventory of options. It’s early, and we haven’t seen enough places to have come across the right house yet. We’ve entered both pipe dreams and nightmares, but nothing in the middle. I’m hopeful that when the market really starts to pick up we will start seeing homes that meet our basic needs, force us to get creative with the budget we have for immediate improvements, and allow us to finally host more than one person at a time in our living room.

Up Next: Paying Off My Student Loan

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Dipping our toes in

After months of procrastinating and making excuses–and a head-clearing vacation in Colorado–my husband and I finally came up with a plan to move our house hunt forward. We would rent a ZipCar and visit a few open houses on Sunday, my husband would make us an appointment with our bank on Friday to get pre-approved for a number we were more comfortable with, and I would reach out to a real estate agent recommended to me by a colleague.

As luck would have it, she was available to meet with us Sunday morning before we picked up the car. We spent an hour chatting in her office about our wants and needs, and together we looked at a few current and past listings so she could get a sense of what piqued our interest and what made certain properties nonstarters for us. She seemed to understand the towns and neighborhoods we were considering and suggested a few others we hadn’t thought about. Overall we felt pretty good about our meeting. She gave us another name of a lender she thought would be better for us and told us she would follow up with access to the MLS (the preferred way to look for homes) and the names of the inspector and attorney she works with so we could look into their credentials. The three of us would email during the week and decide on some homes to visit together the following weekend.

Lesson #3 Get out and see some houses

After rushing back to pick up the rental car, we drove up to the first open house and witnessed our first taste of real estate mayhem. Because Boston has had a record-setting winter, the snow was piled up everywhere, leaving little room to park on most residential streets. These snow mounds, combined with the low inventory of houses and some pretty stunning photos of the property, created so much congestion on the street that each car had to drive single-file, one at a time, past all the other cars (into a cul-de-sac). Because we knew the asking price for this house was at the high end of our comfort zone for a home loan, we left without seeing the place. Later, we learned that someone put in a bid that was $20k cash over the asking price but it was still “significantly lower” than the winning bid.

We had a couple hours before we’d be able to visit the place we were most excited about so we went to the open house for a condo in Somerville that was surprisingly in our price range. The layout and interior were nice, but upon arrival we knew this was not the right place for us. Still, it was good to take a look and see for ourselves.

Yes, I was taken in solely by the name.

Yes, I was taken in solely by the name.

Not far away from this condo was the Tavern at the End of the World. We’ve driven by this place so many times and I fantasized for years about what it would be like, but we’d never been inside. It just made sense that we should go there to grab a sandwich and a drink. Surprisingly, the interior was pretty nondescript, but it had an decent selection of beers and the food was excellent.

The last house we visited was the one that put our house search back on track. A few days after we returned from our vacation, I received an email from Zillow with this listing and fell in love. It looked like a place I wanted to call home. I forwarded the listing to my husband, which spurred the conversation that led to this weekend’s excursion.

In person, the house was just as was adorable as its photos. The place was very small, but it had little touches that both of us loved, and best of all, the price was low enough we could take the hit of a bidding war. It was a bit too isolated but still close enough to enough bus routes that I was feeling optimistic, and we were delighted to discover that the homeowner was a brewer. I think if that kegerator and beer setup came with the house, my husband would have put in an offer for it immediately. In fact, he did suggest we put down a number, but I thought it was a mistake to try and buy one of the first houses we’d seen, so we let the deadline for bids pass without doing a thing.

I felt weak and kicked myself after the status changed to “Pending” on the first house we both loved. But, it was important for me to remind myself that there were things I didn’t like about the place, despite how lovely it was, and I’d made the right decision. These weren’t tiny aesthetic problems, and I could see big money down the line trying to resolve the issues I had with the place.  Besides our next adventure was coming.

Up next: We go out with the real estate agent

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Sucked into the Zillow vortex

How to procrastinate at finding your first home.

Lesson #2 Combining a Zillow Account with Crippling Anxiety

They told us in our first time home buyers class to determine our budget, look at houses in the areas where we want to live, and develop a sense of how our wants/needs line up with the places in our price range.

Instead, I used Zillow to scare myself into giving up, over and over. I would look at the site and mark my favorite homes in bursts: for the first couple weeks after we completed the course, I looked at it regularly until I became discouraged by the lack of decent choices and fearful about finding a real estate agent; at the beginning of summer I knew the market was heating up, but I began to fret about finding “the house” too quickly and having to cancel our trip to MN for a wedding reception/bbq we had scheduled in July to appease the family we didn’t invite to our October wedding in Boston (i.e. everyone except our parents and two of my sisters); and right after our second trip to MN in September for my brother-in-law’s wedding, until I just gave up again after seeing how quickly the houses were being snatched off the market.

My first hurdle was coming to grips with the fact that I’d have to say goodbye to my beloved Somerville.

The problem with living in one of the “hippest” neighborhoods is that it doesn’t take long to be priced out of it. We’re lucky to have an apartment close to the T that also fits in our budget. I’d live here forever if we both weren’t tired of renting a cramped apartment, living sandwiched between two other sets of tenants, and feeling like we can never truly make this place, which we’ve lived in for eight years, our home. My husband and I (and our two cats) outgrew the apartment a couple years ago, when we first started talking about a house. I want a garden, my husband wants to brew beer, and we both want a place that belongs to us.

Still, it was easy to see that the places we were able to afford in Somerville were far different from our options one town over, in a slightly less desirable city. All it took was a few jokes about the house my husband and I would die in, probably because the previous tenants still haunted its rotted walls. You’ll see it below, but I wanted to use this house for our Christmas card and terrify our friends and family.

With apologies to the previous owners and whoever bought them, I post sample photos from these two Zillow listings (removed from the site many months ago), because they were the same price and most graphically illustrate the difference in quality our budget covers in two neighboring cities in the greater Boston area. This comparison does not account for square footage, difference in the number of beds/baths, or accessibility to public transportation, which is an absolute must for any house we will eventually own. I don’t remember their original asking prices, specific locations, or what each one eventually sold for, but this difference is what forced me to realize that owning a house in my favorite city was a goal just out of our reach.

Somerville

One Town Over

Up next: Seeing what’s on the market

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Taking the first steps

How to procrastinate at buying a home.

Lesson #1 Take a First Time Home Buyer’s Class and Freak the Hell Out

StressEgg

Last spring, my husband and I went to the bank to get pre-qualified for a loan so we had a budget to work with, and I freaked out at the number and estimated mortgage. In my head I began calculating all the worst-case scenarios for why we weren’t ready for this: we didn’t have our budget worked out for the ballooning cost of owning a home vs renting an apartment, I was still paying off my college loan, and we didn’t know a thing about real estate so we were sure to be bamboozled into buying a money pit. My husband, who is much more ready for this than I, immediately signed us both up for a first time home buyers class to help alleviate my fears.

What I learned from this class was that the market sucks for buyers because greater Boston has no inventory and prices are high, assembling a good team (real estate agent, lender, inspector, attorney) is crucial, and despite the pitfalls that come with any large purchase, in the end owning a home is going to be a smart investment.

I also learned that my husband and I were much more prepared than I had realized to take the leap into home ownership, and I am really good at coming up with disadvantages. We just needed to figure out a price tag we were comfortable with, develop a list of our wants and needs for the future house, give ourselves time to save up money for the down payment and see if the market improves (it hasn’t), and find ourselves a real estate agent.

Though we should have spent the summer looking at houses, and believe me I spent quite a bit of time on Zillow marking my favorite places at various times over the course of the past year, we only visited a couple condos before signing the lease on our apartment for another year. We didn’t go back to the bank, talk to a real estate agent, or attend another open house until last weekend.

Up next: Getting overwhelmed by the real estate apps

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