On Friday, I detailed the start of our road to homeownership, which stretched over a year and a half from the initial “we might be able to afford a house” to the “let’s hire a real estate agent” stage. Now I’ll tell you how we finally reached the end.
Careful Thinking about Each Home
All told, we looked at exactly 50 houses, including the open houses. Of the 29 open houses we saw, we liked 3 enough to consider making an offer. They were sold by the time we started looking for real.
Once we started working with an agent, we saw another 21 homes. The first home we considered making an offer on was huge and beautifully upgraded, but it had a weird layout, especially in the kitchen. The second home we considered making an offer on was a fixer foreclosure. Not terrible, but in need of major updating. However, the location killed it for us. With both of these, I lost sleep trying to decide whether to make an offer. However, my husband and I realized that if we didn’t know right away, that meant it wasn’t the right house for us.
The first home we made an offer on was fantastically upgraded. We decided to offer 8% less than the asking price because the sellers were asking too much. We met our agent at a coffee shop to sign the offer paperwork, then waited, and waited, and waited. We were finally outbid four days later, without ever getting a response from the seller. We recently learned that it sold for more than the listing price. We don’t think the home is worth that.
The second home we made an offer on was a short sale that was foreclosed a week later. We made a full price offer, because it was priced appropriately, possibly even a little low. We really loved that home, and still love it, but it was not meant to be. The foreclosing bank is notorious for rejecting short sales, but we had a stressful week waiting to see if they accepted our offer anyway. And then another stressful week waiting to see whether or not it had actually been foreclosed and if the bank would accept our offer post-foreclosure rather than re-list it. That was also a no.
The third home we made an offer on was a foreclosure in great condition. This was house #48 in our list of 50, because we saw three homes that day and then one a couple days later. We were in a multiple offer situation, but came out with the winning bid and went into escrow. It’s 2 blocks away from the first house we made an offer on, but it’s 450 square feet bigger, and 10% cheaper. We’re really happy about that!
Tip: Multiple offers on REOs are not the same as bidding wars for traditional sales. With REOs, the seller doesn’t come back with a minimum bid for the next round, just “highest and best.” You have to be careful not to overbid yourself because you’re basically involved in a blind silent auction.
Then came the flurry of documents, inspections, reports, appraisal, more documents, and then waiting. We probably produced two inches of paper in escrow. We sweated the appraisal, but the inspection was easy.
Tip: If you’re planning to buy a home, invest in a scanner or printer/scanner. Our agent could email us offers and documents to sign that we signed at home, then scanned and emailed back to her. It saved a ton of time.
On the day of the escrow signing, we re-signed many of the loan documents we’d already signed, along with some new ones. Now we just wait for the deed to record before we get the keys. That will be followed by another flurry of painting and moving. While we wait, we’re doing the following:
- recalculating our tax withholding
- updating our monthly cash flow budgets so we set aside money for property taxes and next year’s homeowners insurance payment
- collecting paint chips
- getting mover estimates
- getting flooring estimates (verbal)
- prioritizing/extending our project list.
Once we get those keys, we’ll be ready to hit the ground running.