Monday, February 20, 2012

What I Could Have Learned

It was finally move-in day. After waiting for what seemed like months (literally only 3 1/2 weeks), we were preparing several friends' vehicles, including two extended bed trucks, to drive the short distance from our apartment to our first house. We were packed to the brim, with nearly everything labeled for what was sure to be a smooth unpacking process (insert obvious sarcasm here), and were prepared to begin our lives together.

We were excited beyond description, but beneath the elated and jovial facade, I was anxious and nervous. I realized, upon considering what was immediately going to need to be "done" to the house, that I had no idea what to do to upkeep, fix or improve a house.

And this, loyal readers, is the objective of this blog.

I grew up in a household in which my father could have done (and most often did) anything in and around the house. There are only two things that I don't remember him doing while I was growing up: redoing the roof, and installing vinyl siding. I'm sure he could have done them if he had some help, but it might have taken him longer than he or my mother wanted to; and I, the prodigal son, was, at that time, not interesting in anything that had to deal with home remodeling, renovation or improvement. I was blind to the fact that one day I would need to know how to do these things and was probably also ignorant to the fact that the majority of what I would be doing in my house would be while following the instructions of my father who most likely taught me these exact things years ago when I was too preoccupied or disinterested to care.

Standing there beside the packed trucks, I immediately regretted my years of naivety and disinterest when it came to home remodeling. I was as unprepared for a new home as most people are for a surprise pregnancy. I felt caught off guard, embarrassed, and a bit angry at myself for not knowing I would one day need to know these things. My worst fears were confirmed when we began moving our things into the house and my wife said those dreaded first words, "it's time to paint!"

See next post for more on painting, but look below for the pictures from the move-in day at the house. You'll see how awful it looked when we moved in, the power lines running throughout the background and I'll be sure to upload before and afters to display just how far I, and we, have come since the day these pictures were snapped.

Happy viewing.

Wednesday, February 8, 2012

April 2010 Part 4

While a full-price offer on your first home was the norm just a few years ago it quickly grew out of fashion by the time we were ready to purchase a home. At the beginning of 2009 one could expect their home to sell for an accepted offer price of about 5-10% less than they originally offered it for (though that came as a combination of both price reductions and low offers). Our full price offer was bold, immediate, and was intended to get the remainder of the competition our of our way and provide us with the house we wanted without having to wonder about real estate agents' secrets, problems with the home, coming in too low with an offer, etc.

The news we received back was less than stellar. Though we were the highest offer they received (yes, they received multiple offers that day and took the house off the market less than 48 hours after it had been posted), the sellers weren't apparently ready to sell their home.

Stick with me here.

When you put your home up for sale, I'm pretty sure that means you should be ready to sell your home; you should have investigated whether you can afford a different place, where you are going to live in the interim if you don't have another home secured yet, and should have your finances in order. The home's sellers had none of this figured out ahead of time, and so when it came time for our offer to be accepted they included more than a few stipulations, including a week-long waiting period in which we, the potential buyers, were at their mercy, waiting to hear back on whether of not they would be approved by a credit union and their bank for a larger amount of money to move into a new home. Apparently the growing family was breaching the bounds of the small(ish) home (not surprising), but they hadn't bothered to check with any financial institutions or bothered to carefully observe their own finances prior to putting their home up for sale.

We were "bound" by the contractual offer, stating that if we wanted the home, we couldn't put in another offer and have one accepted, unless it was a short sale and needed to go through bank arbitration. So for an entire week we sat at the mercy of their banks, their finances and their timeline as we anxiously waited to hear back about the home, all the while other houses were put on the market and were accepting offers, ones that we could have purchased or looked at. It was a painstaking waiting game until finally...

We were informed they couldn't afford it. The house was being taken off the market not because we would soon be its new owners but because the family couldn't get any financing for a larger home, or for any new home for that matter. They were essentially stuck and had negated to check on whether or not they would be able to move out, prior to posting their home. Assumptions are a terrible thing, and while they were upset about not being able to move out of their home, they were certainly still gaining equity in their home and we were again left struggling to find a home to move into, as the expiration date for the tax credit crept ever closer and prices rose another 1-2% each week.

But the next weekend we conducted a house hunting campaign akin to shock and awe. We saw a home and immediately made a list of pros and cons and decided within 1/2 hour if we were interested in it or not; interested being we would draw up a full-price offer and put it in immediately or we weren't interested enough and we would walk away and never think about it again. Brutal and necessary.

One of the homes we looked at on their particular Saturday had all the makings of a "no" house, until we got inside. It was a newer home, which meant fewer things needed to be updated in it. It was essentially untouched on the inside--the two previous owners had left everything exactly how it was when the builder built it. It had a two-car underside garage, a 1/2 acre lot, and had an unfinished basement. While the backyard was nothing glorious to look at (it has a high tension powerline abatement running through the backyard and down the road in either direction), the interior of the house required the smallest amount of work (aside from painting) of any house we had seen before, including the aforementioned heartbreakers.

We immediately said no because of the large swath of powerlines, small visibility of the highway in the distance, and the price $250k, which was way outside of our budget. But our real estate agent assured us that this property was unique for those very reasons and would attract fewer buyers and would therefore be a home to more easily make a low offer on. We decided to trust our gut instincts after creating an extensive pro and con list, which included some research into living near powerlines.

What we discovered about purchasing a home next to power lines: We discovered that nothing has substantially been proven either way, but evidence suggests there could be long-term mental effects such as depression after living nearby for more than 20 years. While some cases referred to cancerous cells being created in children, the reality of the cause of the hysteria and questions regarding living near power lines are the same "sources" we are surrounded by everyday--the electromagnetic waves.

The amount of electromagnetic waves and "radiation" from working on a laptop for 8 hours is the same as living near powerlines for 8 hours. Cell phone usage is up to 20x as powerful (and we press those directly to our brains). Microwaves are up to 100x as potent (explaining why pregnant women should not stand near them). Living in a brick home carries with it about 1/2 the amount of electromagnetism and radioactivity as high tension powerlines. And to our surprise, many street powerlines are actually 3/4 as powerful, especially when they're carrying a power load to a large new development and the developer has neglected to place the lines underground.

It took me hours to amass the knowledge I needed to garner in order to make an informed and safe decision. The bottom line turned out to be that if you live a healthy lifestyle, avoid overexposure to additional electromagnetic and radioactive sources, and don't live in the home for longer than 15 years, your risks for any type of negative side effects or disease are negligible.

We put in an offer for $25k less than the sellers originally wanted for the property. It was a brazen and tactical move, designed to offer the sellers only a single alternative (work with us or face more months of uncertainty and most likely a deadened market post-tax credit). After some haggling, we agreed upon a price of $230,000, above what we had wanted to spend on a house, but an offer which nonetheless gave us a home. Finally.

Tuesday, February 7, 2012

April 2012 (Part 3)

After our debacle with our "first home," we had to play a strange game of wait and pounce. There were entire weeks in which there weren't any homes within our price range or liking put on the market, and then there were weeks in which we couldn't make appointments quickly enough to see all of the gorgeous potential homes in our immediate area.

One particularly Saturday we decided to browse quite a few homes in an area that was a little bit further away from work for my wife but a little bit closer to work for me. I, of course, in my selfish elation, thought it was the best idea we'd had in a while. And that feeling was reinforced after we were alerted to a new home being placed on the market that very morning. Seeing as how we were only a few miles from the house, we decided to do a drive-by (think window shopping not Grand Theft Auto). We were impressed by the lot, the size of the home and certainly by the pictures we viewed on our realtor's mobile phone. We made an appointment for later that afternoon and were shocked at how gorgeous the home was.

Location, really for the first time in our entire home-buying quest, made a significant difference. In most of the homes we looked at there was a marked difference only if the homes were located in two different states; sections of towns, or towns located adjacent to one another made no difference whatsoever. This home was in a less affluent area, was a bit further from commuter services and was certainly more rural than almost any location we had seen previously.

What immediately attracted us to it was that it was...drumroll...finished. The basement had been renovated to hold an additional bedroom with built-in bookcases (a plus for my often bookwormish self), and included a lovely living room space that provided a great getaway and party area. The downfalls, in retrospect, were probably the 7 foot ceilings, 6 foot drywalled beams, and dangerously low head clearance on the stairwell. Had we purchased the home I probably would have knocked myself unconscious on several occasions.

It had a very nice bathroom, several nice bedrooms and had a great walk-in kitchen that had a "unique" layout; one I'm sure a lot of buyers would have been turned off by, but one that we loved (read: refrigerator in a different area than the kitchen so you are allocated additional counter space; read also: could be a pain.)

We saw it for an hour and were captivated by its appeal. To put this in perspective, we were, at that time, like hungry supermarket shoppers and anything halfway decent probably seemed the most appetizing dish. We wanted to put in an offer immediately. We had learned our lesson. No calling of the parents, no stopping by three or four times to consider what we really wanted to do. If we wanted this house we needed to pounce on it immediately because someone else would undoubtedly be doing that exact thing in a matter of hours. We had our real estate agent draft up the offer right after we left the house and we put the offer in that very evening--for full price.

April 2010 (Part 2, or deux, dude)

With any offer on a new home, there's a good amount of trepidation and anticipation. All the what-ifs play a constant game of full-contact mental tennis: What do we do if we get it, are we making the correct decision, is there something better, should we continue looking, are we paying too much, is there anyone else also offering, etc.?

Sometimes it benefits to take a step back and relax. And other times it helps to scream aloud when you discover 24 hours later that the sellers' realtor lied to you about there being multiple offers, and that yours was the lowest and was rejected immediately.

Our first home has slipped through our hands. We had waited too long, had come in with (although fair) a too-low offer, and had included stipulations such as a $1000 credit toward the repair of the roof and a $1000 credit toward maintenance of the deck and siding which were in desperate need of repair. It was the cliched devastating blow.

I cannot count the number of times we drove by the house afterward or the number of times that we checked the real estate listing or called our agent to call theirs to ensure that the house was indeed still off the market. I was becoming obsessed with a home that wasn't mine and could never be mine. I was plummeting from the pinnacle of elation toward the deepest of melancholies. I had decided there was no way I'd ever love a house again and there was no chance we'd ever be able to purchase a home.

Though in retrospect it sounds cheesy and cliched, the feeling really was ubiquitous around our tiny cramped apartment. We wallowed in our misfortune, destroyed the documents relating to our failed offer, and tried to forget our would-be home. Our families tried to console us and told us there were plenty of other good deals out there. Though we couldn't possibly see a future for ourselves in the real estate market, we decided we wouldn't be defeated and begrudgingly set out to look at every house that we could, even those above our price range just for the off chance that we could get the kind of deal that would give us the possibility of a "forever" home for a "temporary starter" price.

That's when I finally, and personally, understood the definition of a double-edged sword. The hand that we had held the entire time was actually the greatest obstacle working against us: the $8,000 homebuyer tax credit. It was the greatest caveat for purchasing a home at the time and was set to expire in a number of short months, and everyone, including us, realized it; subsequently the entire real estate market had taken off and had formed a mini-bubble. And it was slicing into our hopes and dreams.

Homes were selling for $10-$15,ooo more than they were only a few months ago and prices seemed to be suddenly rising. It became a sellers' market within a buyer's market. The feeling was nearly unexplainable. People were selling their homes to friends or through real estate agents without even posting them online, and those that remained were "no good" by our standards. Then, as if the process couldn't become any more convoluted and seemingly impossible, houses stopped coming onto market. People who months earlier had worried they would never get out from "underwater" were holding onto their homes in anticipation of the market again rising. And the bad news only seemed to multiply over the coming weeks with the prospects of pay cuts at work, with our current rent rate set to rise, and with fewer purchasable homes finding their way onto our radar.

We knew we needed to lick our wounds and reenter the fray. Fast.

Monday, February 6, 2012

April 2010 (Part 1)

Take a trip back in time with me. It's April 2010 again. Do you remember where you were? What you were doing?

I was purchasing my first home. And scared. Seriously scared.

Wait. Let's back up a tick first. Let's rewind to mid-2009. Like a large portion of America I had entered the depths and depressions of unemployment, but was able to extract myself from the vacuous pit. In a few brief months I found myself on the opposite side of the statistics. I had landed a stable job (teaching high school English), had married the love of my life, and was putting more into savings that I had ever imagined. It seemed everything was aligning and the future could only hold positives. So I took a gamble and entered into the real estate market, the arguably single greatest villain of the late 2000s depression. At every corner were friends, family members, coworkers, etc. telling me and my wife to take the plunge because prices, rates and availability were inevitably short-lived and we, as a country, and as a state (Massachusetts) would never see such promise and abundant deals ever again.

Our first thoughts: this will be easy; there's so much to choose from that we'll never be able to decide on just one that we like and we'll be able to move in whenever we want and pay what we want for it. The reality was sobering. The first few houses which we looked at were mostly decrepit, dilapidated at times, and were downright destroyed in some cases (think front door kicked in, hot pink living and dining room, and no headroom in an upstairs master bedroom that mysteriously had a stairwell entering into the only spot in the room in which a bed could feasibly fit.) We needed to up our price range.

With an deflated confidence and inflated wallet we trudged on and found better homes, fewer problems and more aesthetic appeals, but we also found competition. On a given Saturday in late 2009 we were looking at anywhere from 5-10 homes in a single day, all across Rhode Island and Massachusetts. Though we focused on certain communities in our research we quickly found the realities of home shopping to be less than the grandeur that all the rumors promised. Online articles were screaming about the deals to be had in the sunbelt states, especially Las Vegas, where a 4 bedroom, 2 bath home that only 3 years earlier would have gone for $750,000 was suddenly reduced to $175,000. And even at that price they were having difficulty finding buyers or even investors. It seemed that American homebuyers had made a hasty exodus and we could only capitalize on the opportunities. Around here, though, the impact was much more muted. Yes, homes had decreased in value but the amount of buyers and the prices were staying relatively stable, allowing most areas of Massachusetts and Rhode Island to tread the tides until they receded. When we viewed each of these homes, we were never alone. We were often greeted by interested parties either leaving when we arrived or vice versa, sometimes found ourselves viewing homes simultaneously with other couples, and once even had to wait an hour in order to see a home which had cars lined up down the road with their occupants eagerly anticipating their chance to view the diamond in the rough.

These once-in-a-lifetime opportunities applied to countless people who, like us, had weathered the storm and were now ready to snatch up the best deal in the neighborhood, especially with the opportunity to cash in on the $8,000 homebuyer tax credit. But with holidays, our wedding, honeymoon and jobs picking up, time was suddenly working against us. We now found ourselves in a very negative situation. We needed to act much faster, be a little less choosy, and settle upon the realization that unless we made or had saved exponentially more we still couldn't afford our dream home, even in a market like this.

We spent the next few weekends sorrowfully watching homes enter the market on a Saturday and be pulled off the next day, often with full price offers, and with us unable to even make an appointment to see it. We walked through 11 homes one Sunday, and returned home exhausted and fed-up with the entire process, ready to just settle on anything that came our way, so long as it was something with a roof and the promise that we wouldn't have to endure this process again for a very long time. Then we found it.

It was gorgeous, or at least to us, then, it was gorgeous. It was everything we were looking for--a medium-sized lot near some quiet woods, in our price range, which had a gas hook-up, two different heat zones, a partially finished downstairs and was essentially just a cosmetic fixer-upper. We saw it twice within a week's time and were promised by both our real estate agent and the seller's real estate agent that they were flexible with the price and that, since it was a short sale, they were willing to stick with whatever buyer desired the home as opposed to going for the highest price. I decided to ask my parents to come up the next weekend to check it out.

My dad is the handiest of handymen. He is one of those people who picked up a Biology book in 9th grade and instead of reading the fascinating article on the mating habits of snowy owls, investigated how the book was bound and pondered over the construction of the bookshelves which supported the class copies. If anyone knew how to mentally deconstruct a house and inspect its every inch, he was the guy for the job. So when he came out to observe this home, I expected him to go on ad nauseum in regards to all of the pitfalls and negatives of the home; however, to my surprise, he was equally hopeful we'd get it and was very optimistic about its possibilities, and though he found many problems with it, he seemed confident that he and I together could fix each and every one of them. Our offer went in that very night.