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June 24

Adventures in House Hunting: Part 2

Well… I’ve been on roller coaster ride for the past 2 weeks and now it’s come to a close, I felt it the perfect time to share it with you guys.

Felix and I saw a cute, single family home Sunday, June 9th.  What’s funny about this is that we have some friends of ours who are looking to buy a s.f. home in the same area (along with everyone and their mother) and they were there looking at the same exact house at the same time we were.  Awkward and funny at the same time.

Anyhow… Felix and I went home and had a healthy debate and decided to put in a bid on the place.  It was a totally thrilling & scary experience to do this might I add.  We found out the sellers live in Hawaii and with the time change, it took over 24 hrs to hear back from them on any & all communications.

We heard back from the sellers with a counter bid on Tuesday.  We went through 3 rounds of this bidding and it was very nerve-wracking since I just wanted to settle on a price and move forward.  We eventually met half way, as I predicted on Thursday afternoon.

BUT… this is where the roller coaster of mine starts falling downhill.

Financials:

I was pre-approved for a home all on my income.  (I was quite surprised to say the least.) We can’t actually take Felix into account with the financials since he is working as a contractor, and has been for the past 6 months.

It’s handy to get pre-approved before start your home search to know what kind of financing you can get before you fall in love with a house you can’t afford.  Of course you should always know how much you can afford before even getting pre-approved, but that’s another topic in itself.

On Monday when the bidding process started I sent the property listing to our mortgage broker.  She was busy and didn’t get back to me until Thursday.  In which she basically said, in a kind way, that I wasn’t approved for this home!

I can’t tell you how low my heart sunk at hearing this news.

It was really perplexing to me since I was pre-approved based on the asking price of the home we negotiated down a good 20k less than the pre-approval amount.  Needless to say I was shocked and confused.

All evening on Thursday Felix and I were talking about how we could make it work.  You see… he’s in transition to becoming a FT employee, but isn’t quite there yet.  So if his income was taken into account we would have no problem being pre-approved for this particular home.  But he currently wasn’t.

I set up a time the following day to walk through the numbers with our broker to see where we goofed up on this house.  She was going through things and was listing out the various items and amounts when she got to “assessments”.  She kept talking and I was like “hold up, can we go back to assessments.  What do assessments include?”  She was like… since this is a condo you have monthly assessments…

And this was the *high* moment!  This was a single family home not a condo so there are no assessments!  For some unknown reason she had the property listed as a condo even though she had the right cost, taxes, and address listed.  So once she fixed that I was once again pre-approved for this specific property.

*SIGH*  Huge sigh of relief for Felix and I.  This is when it started getting real and exciting again.

I went from the lowest of the low on Thursday to a lovely high on Friday.

All that was left to do was an inspection on the place.

Inspection:

These are pretty mandatory these days when purchasing a property.  You need to know what you’re getting yourself into before you buy it.  For any other newbies, the inspection HAS to take place within 5 days of the seller signing the contract on the price you agreed to.

We had our inspection for the following Wednesday.  Felix and I both wanted to be present at the inspection, and we met the inspector, our Realtor Seth, and my step-dad who we made sure to invite since he’s super handy and is an expert at nearly all home repairs and could give us good ball-park estimates for the fixes.

The inspector was really nice, but talked quite quickly and I’ll be the first to admit that many of his jokes in Spanish went over my head.

We stared on the outside of the house and with the fast talking I quickly got overwhelmed.  But he was pointing stuff out to Felix and I and explained things very well as to what kinds of repairs we would need to tackle and how.

From looking at just the outside of the house, he spotted a major issue.  The foundation had totally started to shift going from what should be two parallel lines (on the foundation of the house): | | to looking like \ /.  Eeeek!!!  So with the foundation doing something funky that is one major thing he wanted to check inside the house, in the basement.

I’ll say right now that the home we’re looking at was built in 1890-something.  So really old, and was built pre-plumbing.

We went inside the house and the list of things that was wrong with the house kept piling up and up.  I looked over at my step dad and he was just standing in the entry way with his arms crossed shaking his head *no*.

We pushed through and did the full 2+ hour inspection on this place.  It was getting so bad with things that were wrong with the property that the inspector was taking pictures to send to his buddies so that they would “believe him”.

Now, I know it’s an old house and some of the things that were wrong with it we knew right away and were happy to address.  But this is the short list of things that we’d have to do to this house:

  • New Roof (approx $11k)
  • Totally new plumbing ($6k-15k, depending on the severity of the issue)
  • All new Electrical (??)
  • New HVAC (heating/airconditioning ducts) (??)
  • Stabilize load bearing walls in basement and first floor (???)
  • New back deck ($1-2k)
  • Eventually fix the foundation walls ($60-80k)
These are just the major things… not even the minor things like moving the ac unit from under the deck or fixing a gas leak in the basement (which is also a major thing to be done.)
Once all of these issues were fixed THEN and only then would it make sense to start in on the surface level things like doing a new kitchen, bathroom, etc.
Our inspector was even saying that if we decided to purchase this home, he wanted to know so that he could bring his students in since it’s a perfect training house (since there is SOOO much wrong with it).
About half way through the inspection Felix and I were like *okay… no*.  If the house was $100k less than what we settled on maybe we’d think about it.
After the inspection, we took my dad out to a local beer garden and chatted about the place.  We got real and were going back and forth on what we would have to do to the place and how he would go about fixing some things here and there.

Conclusion:

If you’ve stayed with me to this point, I don’t think you’ll be surprised to hear that we decided NOT to pursue this home any longer.  This place is the money pit.  You could really ponder knocking the whole thing down to start fresh and it probably would save money in the long run.
We signed a cancellation today and it will go to the seller to sign, and then will go to the lawyer.  After this is done we’ll get back our earnest money-aka deposit on this property.
It’s been a whirlwind of highs and lows.  While it does suck, Felix and I are relived to get out of this unscathed and are already joking about it.
  • You know you should get out when “the inspector is taking pics to show his friends”
  • You know you should get out when ” the inspector can’t find anything good besides the doors and garage”
  • You know you should get out when “the inspector is laughing and cracking jokes about the place”
  • You know you should get out when “your dad is shaking his head no”
and on and on….
The good thing to come out of all of this is the fact that Felix and I are much more aware of the process and now have things to look out for in the next home.  I for one am going to be weary of homes where the floor is in any way uneven or homes built pre-indoor plumbing.  It’s not to say in general that these homes are bad.  But with this particular area, some of these types of homes just weren’t built to last and were never intended to.
Felix and I are starting back at square one, hopefully a bit smarter this time around.  Wish me luck as the adventure begins once again.  Any other home-owners out there have some crazy stories to tell about homes-gone-wrong?
  1. Jenny / Jun 24 2013

    Sigh, I’m sorry it didn’t work out. House buying is one of the most stressful things that I can think of. While a house built circa 1890 sounds charming, the cost of rehabbing the place is, as you found, astronomical.
    Hope you find the right one soon! Best wishes!

    • Liz / Jun 24 2013

      Thanks so much Jenny! I’m finding it really hard to be patient since the inventory of homes is so low. Luckily I have Felix on hand who is really helping me stay level-headed in this whole process.

  2. Bridget / Jun 24 2013

    Wow, a good reminder to everyone of the importance of getting a building inspector in when purchasing a home! I’m so sorry this house didn’t work out for you. Best of luck in finding your dream house.

  3. Kelly / Jun 24 2013

    Oh, you poor thing! What an emotional nightmare. I’m so glad you were able to accept that this was not the house for you, it sounds like it’s not worth it at all. I’m sure you will find the perfect home eventually! Good luck!

    • Liz / Jun 24 2013

      Thanks Kelly! It’s been pretty rough over the past 2 weeks, but I do feel much better canceling after the inspection than I thought I would. Really goes to show that it wasn’t right for us.

  4. K-Line / Jun 24 2013

    So sorry to hear it didn’t work out but this really is par for the course! Now you are so much more knowledgeable. It may still be a few houses down the road before you find one that works, that you actually purchase. But you’re one crazy experience down! :-)

  5. Ginger / Jun 24 2013

    What a lot of up and downs! But I have to say, I am SO GLAD you did the smart thing and turned this one down. Honestly, I’m really amazed that the owners/their agent listed this house for as much as it was! They should have been aware of the issues already. Now with such a bad inspection, I wonder what they’ll do.

    I bought a house two years ago, and my real estate agent was really good at looking for foundation issues in every house we even just looked at. And none of the houses where I was looking were older than 30 years, and most less than 20. (Of course, some of our soil is notorious for foundation issues.) He’s also got decades of experience in renting out a lot of different houses, too, and in his opinion, serious foundation problems are just not worth it. So I totally understand turning it down just for that reason alone. The right house is out there, and you’ll find it! It took me a while to find my house, but I’m so glad I did. :)

    • Liz / Jun 24 2013

      Hey Ginger! Thanks so much for this. I can’t tell you how happy we are that we canceled, since we know we did the right thing.

      But if the bidding stage I really really wanted this house to work for us. We’ve gone from *have to have it* to *have to cancel* in a matter of days.

      You brought up a really good point! I can’t believe they were trying to sell it at the price it was given all of the issues. I don’t think I even mentioned the worst of it…

      Apparently one of the support beams in the basement was not on a rock base and was just in the ground next to the dirt (below the concrete floor of course). Well… rats had started to chew off the post at the base. Yes, one of three support beams for the house is getting eaten away by rats. YAY!

      Now, my step dad could easily fix this for us in a day… but still. How could they sell this house knowing that’s there?! (In all honestly, they probably don’t since they’ve been in Hawaii for the past 2 years… but still). Major Ick! When we found this out at the end, I was ready to run out of the house.

      • Ginger / Jun 24 2013

        My mother says that the hardest part about buying a house is that by the time you make a bid on a house, you’ve already fallen in love with it and mentally moved in – and there’s still zero guarantee it’ll ever be yours! It is SO hard. In my search, I bid on a house and was strung along for nearly 2 months before it finally fell through. In the end I’m very glad, because the house I actually bought wasn’t even on the market until after I started looking again. But at the time it was super hard!

        Holy cow! A support beam in the dirt is just horrible to start with – and then rats *eating* it? That’s unbelievable! No wonder the inspector was taking pictures! Seriously, even if the owners didn’t know (and I do believe that – when you live with a place you don’t think like a buyer), *their* realtor should have done their own thorough investigation to see what they really had to sell. Crazy!

        You know, there are a lot of things to be thankful for. You’ve survived the up and downs, been through a bidding process (and won), done an inspection, and canceled a bid. That’s all great experience. But best of all, the inspection was so totally 1000% clear that you wanted to run fast and far from the property. It wasn’t just a handful of things (like new roof and new a/c, which is ugh, but by no means unheard of); there was no question, nothing to debate! That’s a really good thing!

  6. Kaoru / Jun 24 2013

    woah, that’s insane!! Glad you found all those issues during the inspection (and decided to walk away). You can usually ask the seller to give you a credit or lower the price for some fixes, but I doubt those sellers would have either given you a credit or lowered the price by at least 100k! Can you imagine being a renter in that place? yikes…

    Hopefully the next property you put an offer on won’t be such a headache. Good luck!

  7. Michelle / Jun 24 2013

    Oh, how disheartening. On the bright side, you’re learning A LOT. A home is an enormous purchase, and it’s good to know as much as possible before you take the plunge. I’m sure that with patience and time, the right property will come your way.

  8. Tasha / Jun 24 2013

    Just saying again how sorry I am about that situation! But think of all the things you know now that you can take into the next hunt at least!

    Btw, they may not fess up about a foundation (or even know!), but at least next time you can ask them straight off the bat how old the roof is– and was it a complete tear off or a patch job (because I think legally you can patch a roof up to.. I want to say it’s 3 times? so the more patches, the sooner until you’ll have to do a tear off $$). Their seller’s agent should definitely know that.

    One of the things I found interesting about house hunting is that I *really* wanted a traditional Chicago style bungalow going into it, but they ended up being the houses I felt the most wary in! While not quite as old as the one you are wiping your hands clean of (closer to 1910s), I still worried about the unseen things. I was surprised at how *less* worried I was in the 50s/60s houses. Not that they can’t have their own issues of course but I did feel a little less concerned. And this coming from someone who spent much of their life growing up in a Victorian in Chicago, so I didn’t think “old” would bother me. Sometimes you surprise even yourself! lol

  9. Ginger / Jun 24 2013

    Oh, man, you aren’t kidding– what a rollercoaster! I’m so glad that you were able to catch all these problems before you signed on the house. You’ve surely been spared tons of hassle (and money). I grew up in older houses, and while I love them, there’s just so much work involved with renovating and maintaining them. There are always tons of invisible issues, so a place like this with so many visible ones would’ve been awful. You guys dodged a bullet!

  10. Sally @ thequirkypeach / Jun 24 2013

    Wow! Glad you were able to get out of that deal – it sucks that the cutest old charming homes have the most fixer-up problems – good luck as you continue your search! :)

  11. Sarah C. / Jun 24 2013

    What a smart decision! That type of house is perfect for some folks — those who either want the lot or those who want to do massive renovations — but for so many people, it is just a heartache. As someone who likes resolution, I know how frustrating searching for a home can be, but you are so wise to be doing what is best for you!

    One thing that struck me about your story is that you seemed surprised at the inspection, and a lot of the issues that you describe were not hidden — to a professional (ie, not a first-time homebuyer!). I think I might have mentioned in an earlier comment how important I think it is to have a great real estate agent, and this situation is one where a great agent can really come in to play. Your agent ABSOLUTELY SHOULD HAVE PREPARED YOU for what might come up at this particular inspection. Perhaps not every single thing, but certainly all of the major elements. Before you even put in an offer, you should have ALREADY KNOWN that you would need to spend $50k+ on this home for structural repair — because your real estate agent should have been able to know that there were major issues even without an inspection.

    A great thing to note in your “list” of property preferences is how willing you are to renovate, how extensively you are willing to renovate, and how much money & time you are willing to commit to it. Be sure your agent knows this about you, and you will have a better understanding of whether or not you actually want to make an offer on something. Properties like this house go from “two-week emotional roller-coasters” to “not worth a second thought,” giving you more time to focus on properties that ARE a fit for you.

    Of course, I do not know your agent, and I do not mean to come across too strongly. Your agent might be an absolute gem who is full of knowledge. Just remember that a lot of folks think — “well, it’s the seller who pays both sides” — which may be true, but as the buyer, you are providing ALL of the money for the purchase, so you really are paying your agent 3% (as well as the other side 3%, unless a different arrangement has been reached). Example: For a $500,000 home, that’s $15,000 to each realtor. Is your realtor worth a $15,000 check (or whatever amount s/he will be receiving at closing — yep, it often happens right in front of you)? Make sure you think so (and, if not, tear up that contract & find someone who is right for you)!

    You seem like such a delightful lady, and I just want you to know that you have support from all over the interwebs (including from folks who have been down a similar path in the past & so can understand so many of the frustrations!). Team Liz & Felix all the way!

    • Ginger / Jun 24 2013

      Forgive me for commenting, but I think you make such really good points! My agent was also very good at pointing things out like this. I was looking at fairly new houses (5-25 yrs old) and he was always checking the foundations: looking for doors that stuck or swung, looking for cracks in the walls/ceiling (or spot painting that might have covered it up), and walking all around outside looking for cracks in the slab or brickwork. He gave me a lot of confidence in knowing when I did find a good house that wouldn’t end up being a money pit.

    • Karen in VA / Jun 24 2013

      I also have to agree. A really good agent with talk to you before you start looking at houses about what you like, don’t like, must haves, etc. I am in the process of closing on a house in the mountains of VA. I had a great realtor who noticed problems in the houses we went through… I went from thinking I really wanted a historic house to getting a 1960’s ranch as I realized my arthritic knees were not going to be able to handle all those stairs….

      Also, you should be able to count Felix’s income. I was self-employed until this past December. I provided my mortgage broker with my income statement, tax returns, bank statements to prove my income and was able to qualify for a mortgage. Yes, it takes a bit more time, but definitely worth it….

      Hang in there!!! I’d been looking since September and found my house earlier this month, right before my birthday…great gift…. The house inspection went fine, so I should close in about 3 weeks…..

  12. the Garment Farmer / Jun 24 2013

    Liz, thank you for sharing your experience. I’m sorry the house didn’t work out. I don’t have anything useful to share as I’ve never been down this road, but my husband and I would like to buy a house in the next 1-2 years, so it’s pretty awesome to hear all these details ahead of time.
    Thanks for sharing, and I wish you and Felix all the best in your house hunt.

  13. Kornelia / Jun 24 2013

    Omg! Hope you don’t mind me asking- what your Felix does? My bf works for FT in UK as BI Analyst! :)

  14. Jill / Jun 24 2013

    Oh man, house hunting is so overwhelming and stressful! Good thing you got out unscathed.

    I agree with Sarah C. above! Your agent really should have pointed out a lot of these issues BEFORE any paperwork was signed. They see houses day in and day out, so what was wrong with that house should not have been a surprise there.
    We bought last August, and one of the houses we looked at first was super cute and we thought it might work for us. Then we went to the attached garage and the floor had buckled and cracked diagonally across the length of the entire garage. (We live in SoCal, so you know, earthquake region and all). Immediately our agent said “no way” on us pursuing that property. He said foundation issues are extremely expensive, and even if you get them fixed, aren’t foolproof-basically a deal breaker. We went back inside and took a closer look and we could see the entire living room slanted to the right. That would drive me crazy!
    Good luck, you will find the right one, and now you know so much more than before. Silver lining!

  15. Jen / Jun 24 2013

    Oh, how awful! I’m so sorry. :( This has to be kind of heartbreaking, especially with (as you say) the roller-coaster of emotions involved with finding, bidding upon, and closing on a home…and you never even got to the last part! But I’m glad your inspector caught all of the issues, and am sure your father-in-law would have picked up on quite a few of them as well.

    Gosh, what a shame.

    (So far as the electric—with the age of the house, is it knob and tube wiring? That’s pretty early electricity and not up to code. It look pretty neat, but most folks don’t want to mess with it!)

  16. Jennifer / Jun 25 2013

    It’s very interesting to read about your house hunting adventures. My partner and I bought our first house about a year ago. It’s a “fixer upper” but not as bad as this house you were looking at. My advice about fixer uppers is to keep in mind that your inspector might actually not find everything that is wrong with the house, so make sure you have a good “rainy day fund” because you’ll probably spend a lot of money on stuff you WANT for the house, and then might find yourself suddenly NEEDING to fix something. This winter, for example, we had to do an emergency roof repair in horrible weather because we had water streaming down into the attic and walls – – and had to replace a lot of drywall that was completely moldy. Our home inspector seemed to think that the roof was ship-shape, so it was a complete surprise when we had water GUSHING in through the roof. We also had the basement flood in the first month after we moved in, despite having someone scope out all of the pipes. But overall, I really love having a house. We got a really good deal on our fixer upper, and I would definitely only recommend buying a house that needs a lot of work if you’re getting a very good price – – otherwise, you really don’t know what’s going to come up.

  17. bonita / Jun 25 2013

    Um, where to start ~ that house that you were looking at sounds quite a lot like the house we ended up buying!!

    *roof needs replacing (our inspection seemed to indicated it had been fixed for leaking. Er, not!)
    *ceilings need replacing
    *heating needs fixing/ac installed
    *deck needs replacing
    *bathroom/kitchen/ensuite needs renovating

    and I could go on! How we failed to realize it’d be such a big project I don’t know, but we didn’t and we bought it, so here we are. I am glad you decided not to go with your ‘project house’ Liz, ‘coz seriously, it’s just not worth it.

    xox,
    bonita

  18. Eileen / Jun 25 2013

    Thankfully the 80+ year old bungalow we did end up buying was, according to our inspector, in better shape than houses built 10 years ago, but we looked at enough money pits in order for me to be able to sympathize with you. I dearly love old houses and having bought one before this one, I knew what sort of baggage they end up coming with but I think there are still good ones to be had out there and don’t give up. It took us four to five months of solid looking before we found the ONE so be patient. Your dream home is out there.

    I had a friend who also loves old houses tell me that if you’re going to buy one your husband better be a general contractor and you should probably have a boyfriend on the side who’s an electrician/plumber. Yeesh!

  19. Esz / Jun 26 2013

    Wow! How disheartening!

    Its SO interesting to see how different buying a home is in the US! Here in Australia, houses have numerous open days where potential buyers are invited to have a look at the property. This is long before anyone puts an offer in. The big cities, buying a house is usually through auction and for that you need pre-approval from your bank for the finance.
    The structural reports are done at the same time as putting in an offer and the purchase of the home is usually pending on that. You never outlay any of your deposit before that is done.

  20. Shelley / Aug 16 2013

    I know you have already decided against the house, but a friend of mine had her heart set on a house that needed loads of work, but had great potential. It was priced outside of their range, but had been on the market a long time. They managed to negotiate with the seller, who lives in the US (the house is in the UK) by showing all the work needed (including asbestos removal by a special contractor) and managed to get the price down to reflect that work. Just an idea for you to keep in mind…

    • Liz / Aug 16 2013

      Thanks so much Shelly. The house in question that we passed up has been since removed from the market as the sellers didn’t have much luck selling it. It really was a safety hazard at this point.

      This is good advice for the future though, since we do continue to look at houses in somewhat rough shape. Thanks!

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