Buying our house… chapter 4

If you haven’t read chapter 1, 2 and 3…

STOP right now, go back & read them.

It’s important.

Let’s get started right where we left off at the end of chapter 3…

It’s finally CLOSING DAY! Friday, August 31st 2019 would be the day that we would buy and take possession of our lake house!!

Here’s how it was supposed to go… sign closing papers at 10am in Ames, leave by 10:30 to drive to Clear Lake, hand the seller his proceeds check by noon, spend the rest of the day/weekend deliriously happy, celebrate our purchase, show it off to friends & family, take measurements, make lists and start planning our remodel.

But…

Here’s how it actually went… arrived in Ames for closing at 10am, had a brand new closing agent so we finally finished signing paperwork around 11am but then we realized there was no proceeds check for the seller, spent 45 minutes tracking down the seller’s proceeds, put a new plan together to have seller proceeds wired to his bank, drive to Clear Lake finally arriving there around 2pm to find the seller still at the house and not completely loaded up/out of the house!

This is not how my plan was supposed to go. Not. At. All.

Even though I had explained the mix up on the proceeds & the new wire transfer plan to the seller’s banker, she hadn’t called to explain it to him. There before me stood a very skeptical, old school gentleman who expected a large check in exchange for the keys to his home. So I explained what had happened and that the funds were wired to his bank so he should go there & close on his new house (closing was scheduled for 2pm) as originally planned. Did I mention he was skeptical? So he called his bank to check… the funds were not in his account… his banker lady was out of the office… great.

We’re still standing outside our new house and now I’m nearly in tears. I’m a Realtor. I do this stuff every day. After 14+ years and over 600+ transactions under my belt why on earth was this happening to my own purchase? Approximately 10 more frantic calls back and forth til we learned the wire had actually gone out, but due to business practices of both our lender and the seller’s bank the funds wouldn’t actually “show up” in his account until after 3pm. He was going to have to trust us and head to his closing.

Luckily he did trust us.

He handed over the keys and headed off to his closing. He left behind a bunch of stuff in front of the garage that he said he’d be back for on Saturday and hopefully someone would come next week to get his boat lift. I was so relieved I wasn’t even worried about the stuff. If he comes back for it great, if not, no big deal. We finally had our house!!

Cory and I promptly walked inside to check out our new dream and the first words out of my mouth… “What the Hell have we done?”

In my defense I was pretty stressed with the highs and lows we’d already been thru that day. The house wasn’t exactly clean. The heavy drapes were all shut and it was pretty dark. Even after we opened the shades you couldn’t really see out with all the plastic on the windows. The orange counter tops were a little brighter than I remembered. The kitchen was painted blue and the living room green. I’d never noticed the heavy accordion doors used to divide the living room/dining room/ kitchen. The tub/shower in the main bathroom was baby blue. And the nearly white carpet in the living room had stains… deep breaths… deep breaths…

Our lovely shades…

Calf Sh!+ brown & baby blue…

Orange counters/Almond appliances

Then my amazing sister, Betsi and her boyfriend Brian showed up. They brought tools and lots of ambition. We all immediately went to work on removing the heavy shades, the window plastic and the accordian doors. It was getting better! We had light! Then Betsi and I started on painting… white.. everything white for now. I needed a fresh palate, a clean slate! The guys removed the plate rail from the top of the cabinets, filled holes in the wall (from shades, pictures, etc), cleaned out the garage attic & garage and made 3 trips to the local landfill.

Needless to say Betsi, Brian and many other friends who stopped by helped us all weekend. Cory and I hadn’t planned to start on the house at all that weekend but we were (and are) so happy that we had help. It was truly amazing what some elbow grease and sweat equity could do to a place in 3 days.

Some other things we “learned” about the house that weekend… the freezer side of the side by side fridge only opened about 4″ because the fridge was too big for the space & it ran into the wall, the “stackable” washer & dryer worked great but it wasn’t a true stackable unit so you need a step ladder to access the settings/on/off buttons, the electrical for the house was going to need an upgrade, the original carpet in the house was an ugly brown shag (still in all of the closets), the fireplace doors are just decorative for now (not fastened in the least bit!) and the dishwasher didn’t work (later we would realize the dishwasher wasn’t even hooked up anymore and a wine cork was used to block off the hook up to the garbage disposal!)… on the plus side, the garage was much bigger than we expected!

And the view from our deck… was breathtaking!

 

Buying our house… chapter 3

If you haven’t read chapter 1 and 2…

STOP right now, go back & read them.

It’s important.

Let’s get started right where we left off at the end of chapter 2…

“We’ll take it!”

OMG. We were REALLY doing this…

Deep breaths… big, deep breaths…

This is chapter 3 and it’s a really, really long chapter. Well. Maybe the chapter isn’t that long but let me tell you… the time from “pending” to “closing” was really, really long. June 19th (accepted offer) to August 31st (closing & possession date)… that’s 2 plus months… almost 11 weeks… 1,776 hours… 106,560 minutes… you get the picture.

You have to keep in mind a few things about our offer & the time between pending & closing…

1. We knocked on his door out of the blue.
2. He didn’t have the house actively for sale.
3. As hesitant as I may have been in the beginning, I was now ALL IN & IN LOVE with the idea of buying this house.
4. I’m a REALTOR in my 14th year of helping people buy & sell homes.

Let’s talk about those first two items… we caught him a little off guard. Yes, he did want to sell the house & we had a deal but he didn’t have a plan for the future. No plan for where he would move, he didn’t even have a town picked out…maybe stay in town, maybe move closer to family, maybe buy another house, maybe just rent… no set in stone plan.

Keeping those first two items in mind we offered a long “pending” period before closing, 74 days. In our area cash sales & some conventional financing sales occur within a 30 day period and USDA, FHA, VA financing sales usually take around 45-60 days. When we made our offer to him we wanted to make sure that he didn’t feel rushed and that he had plenty of time to find a place to live. Hence we gave him almost 2 1/2 months before we possession and closing. Not only did he need to do some soul searching and find a property, he would likely need to get pre-approved & have 45 days to close on a property too.

Keeping item #2 in mind… We offered to take the house “as is” and we did no inspections. Ok, that’s a little bit of a lie, we had to do a pest inspection because our financing required it. As is, no inspections was a way to make our offer more attractive and “easy” for the seller. I didn’t want him to worry or be hassled by what we might find and subsequently ask for if we did a typical home inspection. And honestly, Cory and I knew the house would need work (the roof was obviously shot, he said the furnace and a/c system were old, wood siding has issues), we knew we wanted to make a lot of changes (did I mention the orange counter tops?) and we were aware/prepared for items that would need addressed. And just a side note here: I always suggest that buyers do a home inspection, do what I say not what I do. I (and my husband for that matter) were leaning heavily on my experience & knowledge and were very comfortable taking our future into our hands without an inspection. Great article on why to have a home inspected… Importance of a Home Inspection Contingency

Keeping #3 in mind… 74 days is a long time to wait for anything. If you think back to chapter 1 and 2 you’ll remember that we knocked on his door, took a 10 minute tour of the house, made an offer and spent maybe another 10 minutes at the house. That’s a grand total of about 25 minutes. Again, do as I say not as I do… always take your time looking at a potential home before you make an offer.

If you know me, you know I’m a planner and a list maker so I did what I’m good at and started making lists… Things We Need… beds… hmmm… this could be a problem… I have no idea how big the rooms are or what size bed will fit in them. Ok, furniture… another problem… no idea what will fit or where outlets are, windows fall… ugh. Let’s move on…  Things We Need to Do… Call the contractor, flooring company, kitchen guy – easy enough but what am I going to say… we’d like you to come look at our house in 74 days to give us an estimate on projects? Electrician… wait did we even look at the electrical service?

I knew the seller had a lot on his mind already and I refused to be a pain in his you know what. I preach to my buyers that they shouldn’t ask to see the house over & over or schedule follow up showings for measurements and estimates. We were just going to have to be patient. For 74 days…

Keeping #4 in mind… I had 14 1/2 years of real estate experience under my belt when we made our offer. I’ve got stories upon stories to tell of deals gone bad. My colleagues and I often joke we should write a book, but we wouldn’t want to scare away innocent buyers so we haven’t done it. My experience is what makes me a great Realtor (yep, I just referred to myself as great) but it does not make me a great buyer…

You have no idea how many times I reminded myself that this must be what my buyers go through when they are buying a home. The middle of the night panic attacks wondering if we’re doing the right thing, grumbling about tracking down more documents for the lender, all the hurry up and wait, worrying about the 88 things that can wrong in a transaction… oh wait, normal people (read NOT Realtors) probably don’t worry about those 88 items (if you’d like to know what they are, message me & I’ll send you a handy list!) but I did worry. I knew how unique this deal was and I knew how many things could go wrong… What if he changes his mind? I mean we knocked on his door… What if his family or significant other talk him out of selling? What if someone else offers him more money? I mean, I know how unpredictable FSBO (for sale by owner – which is basically what he was) can be… What if he can’t find a house he wants? What if he can’t get financing for what he wants? What if something stupid on our end falls thru? What if the house doesn’t appraise? What if he finds a house to buy, gets a deal put together but then that purchase falls thru?

Keeping all of these things in mind I insisted that we tell NO ONE we were buying a house there were just too many things that could fall thru. NO. ONE. Have you met my husband? 😊 I absolutely love the guy but our promise to tell no one lasted about… 22 days. Then it spread like wild fire. So for the next 31 days I fielded “I heard you bought a house!” with “We haven’t bought it quite yet… still have to get the appraisal and thru underwriting, closing isn’t until end of August…” and then the last 11 days I kept replying “Not quite yet, closing isn’t until the 31st!”

We finally made it to closing day… and then… deep breaths…

~  to be continued  ~

Buying our house… chapter 2

If you haven’t read chapter 1…

STOP right now, go back & read chapter 1.

It’s important.

Let’s get started right where we left off…

Me: “Are we really going to do this?”

Cory: “Yep!”

Me: …long deep breath… “Ok… Now what?”

Cory: “I don’t know! You’re the Realtor!”

This folks is the deep conversation that Cory and I had in early June of this year as we pulled away from the house we would eventually buy in Clear Lake.

Oh jeez. He’s right. Deep breath. I know how to do this. I do this every day. We can totally do this. Who am I trying to convince? OMG. Stay calm… Cory’s counting on you. How do my clients do this? This is nerve wracking…

Mind you… I’m driving us back to Ellsworth (home). My mind is spinning & my heart is racing. This is the last thing I thought would happen today when I got up this morning. I’m making to do lists in my head as I drive. Damn… This is not how this is supposed to go. This is not the neatly formed path that I lay out for my clients. We’ve already fallen in love with a house, that we aren’t pre-approved to buy and Cory is counting on me to make it happen. Needless to say… I didn’t get much sleep that Sunday night.

Ok, Brandi… relax the F… down! You of all people know how to do this and what needs to be done. Attack it like every other transaction you do 50+ times a year. What would you tell your clients to do…

• Does it fit “most” of what you want/need in a property? If it doesn’t fit some of the your wants/needs are you ok with settling on those items? (yep, fits every single one!)
• Crunch numbers on purchase price, interest (wait, what are interest rates at right now?), insurance (I have no idea!), taxes (holy cow, these aren’t Hamilton county taxes) here’s a great calculator to use… Karl’s Mortgage Calculator
• Gather documents to get pre-approved (2 years tax returns & W2s, 2 months bank statements, last 2 pay stubs)
• Decide on a lender (this was horrible and wonderful all at the same time)

8:01am Monday I emailed Tyler Osby with the Tyler Osby Team at Fairway Independent Mortgage.  Like I said earlier, this was a hard decision. I have 5 lenders that I absolutely love working with, lenders that I frequently refer and trust any & all of my clients with… but I can only choose one. Tyler was the lender that we’d decided to use for our purchase. I explained that we’d fallen in love with a property… no we didn’t have a purchase agreement yet… nor do we have a purchase price… but we need to get pre-approved and fast! What did the great Tyler tell me… FILL OUT THE ONLINE APPLICATION. Hmmm, turns out I’m just like every other person who needs to get pre-approved!

I filled out the application and attached the documents that I knew we’d need. This is where the rubber meets the road folks… it took us 2 full days, numerous requests from Tyler for more documents, hours of searching & gathering to get pre-approved and I’m supposed to know what I’m doing! Here’s a more complete list of the items that you need… Pre-approval checklist. Our situation is a little complex, we have a couple of business partnerships, Cory and I have ownership in the company that he works for, some of his income comes in the form of bonuses, I’m self employed… Tyler didn’t want any surprises. I could do 2-3 blog posts just on the details involved with getting pre-approved, maybe I’ll do that later… back to the topic at hand.

Safely pre-approved, I called the seller and told him we’d like to make him an official offer. He said great, I’ll be home tonight… wait, what?!? Ah yes, he’d much rather do things face to face than use technology. At first I was a little annoyed, it would be so much easier to email him the offer, I could set it up for electronic signatures… but once I took another deep breath, two things came to mind. 1) think of this from his perspective – he doesn’t do this every day, we’re the ones that caught him off guard, this is a big deal, put in the time & effort, it’s worth it …and 2) I get to see the house again!!!!!

Written offer in hand (with all of the extra “stuff’, addendums, disclosures, etc) we went to the house. More chit chat (did I mention he’s super nice?) and discussion of the weather… this is kinda awkward… I laid our offer on the table, put on my Realtor hat,  started thru the offer and all the extra stuff. He asked some questions (all good) and asked if he could have a few days to think it over & show it to his lawyer. Think it over? I don’t think my heart nor my sleepless self can handle a couple days… but ok…

Even though I was heartbroken that he hadn’t just accepted our offer and signed all of the paperwork on the spot (what was I thinking!) I stayed calm and asked if I could take another quick look at the house (YAY!) & snap a few pictures. He gladly obliged while he and Cory went outside to look around. That was a Tuesday evening…

Six really long days later on the following Monday, he called me… deep breath… with a counter offer. Stay calm, act like a professional… “Ok, I’ll need to talk it over with Cory and then I’ll get back in touch.” Deep down inside I was doing cartwheels. I knew that we would accept his counter offer because we’d already discussed our limits, our non-negotiables… We were going to buy a lake house! I resisted the urge to call him back 2 minutes later & scream… “We’ll take it!”

I patiently waited all of 27 minutes…

OMG. We were REALLY doing this…

Deep breaths… big, deep breaths…

~  to be continued  ~

 

Sewer problems…

Well that’s sh++!

Literally. Sh++.

Two weeks ago I was doing a load of laundry. Came back in to put said laundry in the dryer…wait… what’s that smell… is that…  omg… what’s in the bathtub… O.M.G.!!

Yep. Bad deal. Started making phone calls to plumbers, drain & sewer companies. Turns out that a Wednesday at 4pm is not the easiest time to get someone to respond. But never fear A-1 Drain & Sewer Cleaning answered their phone and said they were finishing up a job and would be right over. I had to share a pic of the truck below… great marketing!

As soon as they showed up (two guys) they listened to my story, assessed the situation and started to work. I heard some grumblings about tree roots and then they brought in a bunch of equipment. First up was pulling the toilet that was nearest the street, they laid down sheets to protect the floor & rolled the equipment into the bathroom. I managed to stay out of the way and tried not to ask too many questions but it was quite the sight.

After some time and quite a bit of racket from the big machine they rolled in (I know, I know, real professional terms here) they said they had “60′ out and couldn’t get thru” so they needed to get under the house and into the crawl space to try something different.

One of the guys crawled all the way in to our crawlspace while one stayed outside with and ran the equipment, then some more equipment, lots of flashlights, quite a bit of noise, another hour of work and… they got it!! Whew!!

Now that they were done, I felt more inclined to ask questions. What was the problem? He said we had a small amount of tree roots which they’d easily cleared from inside the house but the biggest problem appeared to be a combination of rock hard, undissolved toilet paper and grease. I loved this quote… “Dried up Charmin is harder than concrete.” Then I asked what should we do, what do we need to do? Pretty simple he said, don’t be afraid to use/run water. With all of the water saving faucets, toilets, shower heads we aren’t pushing as much water thru the pipes. And never, ever put grease down the sink.

In an effort to make this a learning lesson for you, I’ve done a little more research. This article does a little better job of explaining what they actually did to clear the sewer line and the equipment that they used at my house! And I copied this explanation from the San Francisco Chronicle’s website on how to avoid these problems in the first place…

Preventing Clogs

To prevent clogs, use as little paper as possible to get the job done. Choose a paper that is soft and absorbent enough to be comfortable but that dissolves quickly – the trend toward more absorbent and softer papers increases the strain in plumbing. Test the paper’s ability to dissolve by placing a few clean sheets in a sink full of water and gently swishing them around to see how easily they fall apart. Avoid packaged wet wipes as well if you know you have plumbing problems, even if they are labeled “flushable.”

And from Mr. Rooter’s website…

Grease – If the grease is still hot, simply pour it into a dedicated grease jar or can. A mason jar or old coffee can with a lid works well, or you can make a disposable grease can by removing the lid of a soda can with a can opener. When the jar or can fills up, simply scoop out the solid grease into the trash bin or throw out the entire can. You may also leave the grease in the pan, wait till it solidifies, and then wipe it out with paper towels & throw them away.

Cooking Oils – Allow the cooking oil to cool off before you do anything with it. If there is less than a cup of oil, pour it into the trash can on top of a few paper towels. This may not be an option if you’re dealing with large amounts of oil. If you need to dispose of more than a cup, pour the oil into a container and reuse it next time you’re frying. Or you can save plastic milk or juice jugs with screw tops, coffee cans or mason jars to collect used cooking oil in and throw the entire container away when it’s full. (Make sure the lid is on tight.)

 

A “Soft” Housing Market? We don’t think so!!

A ‘Soft’ Housing Market? We Beg to Differ!
Posted: 25 Aug 2014 04:00 AM PDT
A ‘Soft’ Housing Market? We Beg to Differ! | Keeping Current Matters

There are some pundits lamenting the softness of the 2014 housing market. We can’t understand why. Though it is true that the early part of the year disappointed because of a myriad of reasons (ex. weather, lack of inventory, less distressed sales), the recent housing news is extremely encouraging. Let’s give some examples:

Spring Home Buying Season is Healthiest in 3 Years

Move, Inc. just last week revealed that this spring’s housing market finished stronger than any time in the last three years. In the report, Jonathan Smoke, chief economist for realtor.com explained:
“This is the first time, since the beginning of the recovery that we expect to see positive momentum throughout the second half of the year. While seasonal patterns are emerging in July month-to-month comparisons, all other metrics point to fundamental market health and a build-up of momentum.”
Existing Home Sales are Up

In their latest Existing Home Sales Report, the National Association of Realtors (NAR) announced existing-home sales increased in July to their highest annual pace of the year. That is even though distressed property sales fell to 9%, the first time they were in the single-digits since NAR started tracking the category in October 2008. Lawrence Yun, chief economist for NAR explained:
“The number of houses for sale is higher than a year ago and tamer price increases are giving prospective buyers less hesitation about entering the market. More people are buying homes compared to earlier in the year and this trend should continue.”
New Construction Surging

According to an article on Market Watch, new constructing is surging:

“Construction on new U.S. homes jumped 15.7% in July to the highest level in eight months and starts were revised up sharply for June, indicating a pickup in home building after an early-year lull. Housing starts climbed to an annual rate of 1.09 million last month…Economists surveyed by MarketWatch had expected starts to climb to a seasonally adjusted 975,000 in July.”
Foot Traffic at Year High Numbers

Foot traffic (the number of people out actually physically looking at homes) has a strong correlation with future contracts and home sales, so it can be viewed as a peek ahead at sales trends two to three months into the future.

The latest foot traffic numbers show that there are more prospective purchasers currently looking at homes than at any other time in the last twelve months which includes the latest spring buyers’ market.

Bottom Line

The spring market finished stronger than any time in the last three years. Home sales are at year long highs. New construction is beating estimates. There are more buyers out than at any time in the last twelve months.

We think the housing market is doing just fine.

12,575 Houses Sold Yesterday!

12,575 Houses Sold Yesterday! Posted: 23 Apr 2014 04:00 AM PDT If you read certain headlines, you might be led to believe that the housing recovery has come to a screeching halt. Naysayers are claiming that rising mortgage rates and a lack of consumer confidence are keeping Americans on the fence when it comes to purchasing real estate. That is actually far from reality. After all, 12,575 houses sold yesterday, 12,575 will sell today and 12,575 will sell tomorrow. 12,575! That is the average number of homes that sell each and every day in this country according to the National Association of Realtors’ (NAR) latest Existing Home Sales Report. According to the report, annualized sales now stand at 4.59 million. Divide that number by 365 (days in a year) and we can see that, on average, over 12,500 homes sell every day. If you are considering whether or not to put your house up for sale, don’t let the headlines scare you. There are purchasers in the market and they are buying – to the tune of 12,575 homes a day.

Should I Rent If I Can’t Sell?

Should I Rent My House If I Can’t Sell It? Posted: 04 Mar 2014 04:00 AM PST A recent study has concluded that 39% of buyers prefer to rent out their last residence rather than sell it when purchasing their next home. The study cites that many homeowners were able to refinance and “locked in a very low mortgage rate in recent years. That low rate, combined with a strong rental market, means they can charge more in rent than they pay in mortgage each month, so they are going for it.” This logic makes sense in some cases. We at KCM believe strongly that residential real estate is a great investment right now. However, if you have no desire to actually become an educated investor in this sector, you may be headed for more trouble than you were looking for. Are you ready to be a landlord? Before renting your home, you should answer the following questions to make sure this is the right course of action for you and your family. 10 Questions to Ask BEFORE Renting Your Home 1.) How will you respond if your tenant says they can’t afford to pay the rent this month because of more pressing obligations? (This happens most often during holiday season and back-to-school time when families with children have extra expenses). 2.) Because of the economy, many homeowners can no longer make their mortgage payment. What percent of tenants do you think can no longer afford to pay their rent? 3.) Have you interviewed a few experienced eviction attorneys in case a challenge does arise? 4.) Have you talked to your insurance company about a possible increase in premiums as liability is greater in a non-owner occupied home? 5.) Will you allow pets? Cats? Dogs? How big a dog? 6.) How will you actually collect the rent? By mail? In person? 7.) Repairs are part of being a landlord. Who will take tenant calls when necessary repairs arise? 8.) Do you have a list of craftspeople readily available to handle these repairs? 9.) How often will you do a physical inspection of the property? 10.) Will you alert your current neighbors that you are renting the house? Bottom Line Again, renting out residential real estate historically is a great investment. However, it is not without its challenges. Make sure you have decided to rent the house because you want to be an investor, not because you are hoping to get a few extra dollars by postponing a sale.

Top 10 Reasons to Hire a Real Estate Agent

Courtesy of: Park City Real Estate – JensenandCompany.com

 

   

 

The Impact of Increasing Mortgage Rates on Prices

The Impact of Increasing Mortgage Rates on Prices Posted: 14 Jan 2014 04:00 AM PST Many pundits are warning that there will be a drop in real estate values because mortgage rates are beginning to increase. The logic makes sense. However, history shows that increasing rates have not negatively impacted home values in the past. Four times over the last 30 years mortgage interest rates have dramatically increased. Here is the impact the increases had on home values at the time: Dates Mortgage Rate Home Values May ‘83 – July ‘84 12.63 – 14.67 + 6.6% March – Oct ‘87 9.04 – 11.26 + 5.2% Oct ’93 – Dec ‘94 6.83 – 9.2 + 1.2% April ’99 -May 2000 6.92 – 8.52 + 10.9% Perhaps the impact of increasing rates on future home prices won’t be as dramatic as some are predicting.