Archive for March, 2014

What’s it Worth?

Apparently, almost exactly what I’m paying for it. As part of the mortgage process, my bank had a real estate appraiser survey the property for real estate value. They do this to make sure the house is worth, at minimum, the amount I’m borrowing to purchase it. If the house appraises for more, thats great for me the buyer (instant equity). If the house appraises for less, the bank won’t let me borrow any more than the appraisal amount. And in many cases, you take the appraisal back to the seller and say, “about your price…”

My appraisal came in just $1000 higher than the purchase amount, so I’m in good shape. As part of the appraisal, which my bank gave me a full copy, it shows the recent home sales in this and similar neighborhoods which show where she based her number. She compared my house with 4 others which have sold in the last few months, all similar in square footage, number of rooms, and condition. The house she ranked as the most comparable was the house across the street. Although it has a basement, she deducted a certain amount from its selling price and volla, my house appraisal.

Now I am waiting on the bank to do a clear title search and schedule a closing date. We are less than 1 month away, or so they tell me.

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House Hunting – Part 2

Continuing where the last entry left off, I put in an offer on a different home, although just across the street. Also a foreclosure, but this property is owned by a different bank. It’s been listed since October of 2013, and every 2 months they drop the listed price by about 10%. I had an idea of what I thought I would pay for this one, but my realtor convinced me to make an offer significantly lower. And I’m glad he did. I submitted my offer with the realtor after work on a Wednesday evening, I had a counter offer before noon the next day. Their counter was even below the price I originally had in mind, so I accepted! I know what you’re thinking, I thought it also: why not make a second offer and see what they say? But we’re only talking about $2,000 difference, and I didn’t want to get greedy and lose this house to the next person in line like I did the first one.

Then it was a waiting game to get my contract. I had to initial 12 pages of “addenda” to the offer, basically a bank novel to help me understand that “as-is” really means “as-is.” One week later, I had my contract and took it to the bank. I was already pre-approved for a mortgage several months before. I did this for 2 reasons: first of all, I wanted to know what dollar amount the bank would let me borrow for a home, because there is a very precise calculation they do comparing your debt to your income. Secondly, if I did find the right house, I would need a bank financing letter in order to submit an offer. Since I already did the first step, the bank took my contract and I signed the mortgage application. The funny part was when the banker (super nice guy, btw) says, “how much?” The look on his face was priceless. I had already explained to him in our first conversation that I was looking for a fixer-upper. Apparently he didn’t know just how much of a ‘fixer’ I was after. The look on his face said, “Are you sure you know what you are getting yourself into?” YEP! But I was prepared for that expression. I explained that I’ve tackled home improvement projects for the past several years, and have done woodworking for even longer. To convince him further (not that it was necessary, but I don’t shy away from showing my work) I brought along a small album of before and after photos including inside, outside, and a major bath redo. He seemed impressed, not so much by the work itself, but that he had no idea I was a DIY guy.

So now its just waiting on the bank to confirm all of my application details, hire an appraisal on the home, run a title search on the property, and then hopefully schedule the loan closing. On or before April 18, just over a month away! Being under contract is such a relief. I’ve been making an inventory of the things I will need. I can start picking up household items when I see them on sale or at yard sales this spring. I’m Craigslisting every day to find nice used appliances. And I can’t stop Pinteresting ideas for every room. Have you searched “Craftsman Bungalow” on Pinterest? You don’t know what love is until you do.

My little bungalow (yes, I am already calling it mine; I might also drive down the street at least every other day to see what the neighbors are up to and how the house looks as the snow continues to melt) – anyway, it has 2 bedrooms, 1 bath, kitchen, living room, dining room, and small laundry area at the back entrance. Also a 1 car garage with stone drive, back yard shed, and pretty good size yards in front and back. All the woodwork and dining room built-ins are painted, but they look original and otherwise in great shape. Hardwood floors under the old carpet, though needing refinished. The windows look original to the house, and badly need replaced. The roof also looks terrible; although there’s no water damage to the ceilings, it looks like just a matter of time until it fails. The bathroom is terrible; plywood on the floor, extremely soft all around the fixtures from lots of water damage. And the bath layout overall looks cramped, I’ve already been sketching ideas for moving either the vanity or the toilet. But I cannot wait to get started! And I do plan to document every room and the outside with lots of “before” pictures so I can enjoy looking back and seeing how much change I’ve created over the next few years.

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Head, Heart, and House Hunting

To recap the last couple years, off and on this blog has been a writing tool and way to journal about the home improvement and DIY projects I’ve tacked. However, these have not been on my own place. Most have documented the improvements to my mother’s home, so that she has a house to serve her long term needs and keeping in mind qualities that will need little maintenance in the future. But with my job now being full time and the desire to start roots here, I’ve been house hunting.

And so I should probably explain my choice of title. Because 4 months ago I was not even thinking about a house of my own. A spacious loft apartment, yes perhaps. But home ownership? Sure, I have the knowledge to do a lot of the work, but I thought that was years off. Now I’m not so sure. That’s why these last few months have also been head and heart “hunting.” Or maybe that’s just my way of saying, soul searching. Determining what I want in my future, and deciding that a fixer-upper house in a nice neighborhood is a plan that makes sense both in my head and heart, and in my budget. I think I’ve shown on paper that it will be a smart step for now and also for the years to come, and of course with my love of DIY, my heart was already into it.

What would I want in a house? Being single, I wanted something small and efficient. As a lover of all things old, I wanted a house with charm and character (“they don’t build em’ like this anymore”). And with a desire to do all things myself, I wanted a fixer upper (DIY or die trying). And I knew I was on a budget, looking at the middle to lower realm of the housing market in my area (including many foreclosures).

I found that homes meeting this criteria fell into 2 main categories. Either they had owners who slapped on inexpensive and crappily done “improvements” (I’m talking cheap quality, glue down flooring, flimsy paneled walls, cardboard cabinets, and plastic baseboard); or, they had gone without maintenance so long that the original character wasn’t worth saving (holes in the roof, holes in the exterior walls, windows falling out, floors falling in). I finally told my realtor; I want as authentic to the original home as possible, but in the best possible condition. And small, but in a nice neighborhood. And less than $50k. I think he was about to give up on me.

And then I found the right street. An older neighborhood of mostly large, character-rich and wonderfully loved and maintained homes. Lining the last 2 blocks are several little bungalows, all very similar in size and style. And several of them for sale. And of those, a few right in my price range!

I know they say don’t buy the first home you look at, but it was love at first sight. Craftsman built ins, small and efficient, needing DIY TLC, beautiful woodwork, stained glass details, great foundation and decent roof. So I made an offer and waited. And that funny positive feeling that said, “this is the one?” Wrong. I waited about 2 weeks, only to find out my offer was rejected, and the home was now under contract. Well shoot.

Ok, what about the second home you look at? And right across the street from the one that I was unsuccessful with? I looked at it, very similar in size but different in the types of work it needed. Roof is sagging, windows not in great shape, but the same built ins and a better layout! And a few of the neighboring houses have recently seen very nice renovations. Let’s put an offer on that one!

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