All set for the moment

I think I've done everything I have to do in this house-buying carnival. I completed all the to-dos from yesterday's post. I heard from my agent that the seller's agent says our to-do list was "reasonable" (his word) so hopefully the seller will do all the items. I can already think of something I left off and wish I'd asked for, but it's minor - and hey, maybe it'll be my first fix-it job.

So I think I'm in wait state. I also think I've paid for everything I need to pay for at the moment (credit check, earnest money, inspection, appraisal). So now I sit, at the ready to react when acted upon, but my to-do list is clear.

I think.

Oh crap: Christmas.

More to-dos

Boy, I know people buy houses without agents but I am SO glad I'm using one. I wouldn't have visited this house, and I wouldn't have made an offer, for two things. True, that's not the end of the world - as one friend accurately told me after my first bid failed, there will always be more houses. However this house meets my criteria in many ways and I will be happy if I get to be done with the house-hunting stage for a good decade or so.

Back to my agent: She also went over my inspection report in detail and worked with me to write up the addendum we sent to the seller last night. She reviewed the title packet from my title company to assure me there wasn't anything too unexpected there. She let me know I need to get on getting house insurance like today.  Yesterday, if I can swing it.

That bit surprised me - really? I need it now? But it's true both my lender and now my title company have requested that information. So I guess yeah I need it now.

So today's to-do list:
- Get house insurance
- Contact inspector to have him write up something certifying the house is pest-free (my lender insists, weirdly)
- Send in title information once I have insurance
- Contact my lender to give HER the insurance info
- See if my lender needs an image of the processed earnest money check.

Phew. Glad I don't do this on a regular basis.

As promised...

Well, the house inspection went well. He pointed out lots of little things but nothing that seems to be nightmare-worthy. My agent and I will ask the seller to fix a bunch of little things and then it seems like the sale will proceed!

Things that could still go wrong:
- seller could refuse to fix anything
- bank could disagree with valuation of house
- bank could decide I'm a sketchy proposition
- bank could decide the flip isn't kosher enough for them (though they've checked on it twice; since it wasn't a foreclosure they say they are not concerned)

In short, it's looking pretty good. So, a few pics, even though I don't think they do a good job of showing the place. It'll be easier with furniture, I think, and when I have all the time in the world to stage it.

exterior - the family room that was half the garage, and the living room. also - yard that needs plants!

 

looking from the living room past the front door and into the dining/kitchen area. I think that space needs an awesome work island/seating area sort of thing.

in the family/tv/party room looking into the kitchen area. to the left is the remaining single-car garage.

The kitchen: where the magic happens! I know a big 'ol fridge is going to make the place seem a lot smaller but it can't be helped. I'll try not to go TOO epically big. Also to the right of this pic is the hall to the 3 bedrooms and the 1 bathroom.

I dunno. This thing might happen. We'll see!

Paperwork

I've compared my two banks' mortgage paperwork. Bank A (the one that has lower closing costs but charges PMI) may not work anyway: the paperwork says that part of their title work is making sure the seller has held the title on the property for 180 days. This seller hasn't, and I know it - it's a flip. I'd called that bank and asked if it would be a problem and they said no, but maybe that person was wrong.

Anyway Bank B (higher closing costs, no PMI) has twice told me that won't be a problem. We'll see.

I took the mortgage packets to the coffee shop in the neighborhood belonging to this house, and afterward I walked past the house and through the park. I could be really satisfied there.

Still, I've felt strangely reluctant to delve into signing my name and assembling all the documents I need. I think I'm just afraid to get my hopes up.

Inspection is tomorrow - if it goes well I will schedule the appraisal. If it does not go well... well. No need to go there just yet I guess! But I will say: if it goes well, I will post pictures.

Crunching numbers

I'm deciding between two lenders for the mortgage on this house. It's interesting; I'm putting down 10% and getting a 3.375 interest rate from both banks, but their closing costs and monthly payments differ a bit.

Bank A will charge me PMI (since I won't have 20% equity) and slightly lower closing costs.
Bank B will not charge me PMI but they have higher closing costs.

After 1 year/12 payments, Bank B is 7% more expensive

After 3 years/36 payments, Bank B is 1.2% more expensive

After 5 years/60 payments, Bank B is .36% less expensive

After 7 years/84 payments, Bank B is 1.47% less expensive

I can't go a lot further than that though - because somewhere around year 7 or 8 the house would probably have 21% equity and PMI would be dropped. I did run some numbers assuming that PMI would drop after year 7, but Bank B still comes out a bit ahead (after 30 years it would be 1.3% less expensive), and goodness knows the house has plenty of room for me to grow into.

So as long as I stay in the house more than 5 years, Bank B seems like the ever-so-slightly better bet. I do have the cash, though it would be nice to have lower closing costs since I will have a lot of start-up costs... but I think I will keep my eye on the big picture.

Am I missing anything? Is it vitally important to keep closing as costs low as possible?

WELL.

I've made an offer and it's been accepted. It's a lot more house than I was looking for - 3 bedroom, living room AND family room; one-car garage. Only one bathroom, which is fine by me as I'm not a fan of cleaning those anyway. The kitchen is smaller than I'd like and the house was built in the 70s and isn't particularly cute.

But. It gets great light, with several skylights. It was recently remodeled and they did a solid job - even the closet doors are sturdy, real-wood affairs. There's room for my dining room table (heck, there's room for a MEGA dinner in the family room). There's a small outside patio off the kitchen, perfect for grilling. The front yard is ordinary now and will be a great place for a garden, and perhaps a patio or stone path or something to get rid of all the grass.

Also, it's in a great location - about a mile from a few of my friends, and under two miles from several really great neighborhoods. The neighborhood this house is in ("my" house? really?) has a small but great little business district - a garden shop, a brewpub type place, a slightly higher-end restaurant, and a great coffee shop. It also has an amazing and lovely park only a block or so away.

Also, the taxes are low and it looks like the principal & interest will cost about what my former rent was. I will have more expenses in terms of insurance, utilities, taxes, but I think it's going to be okay. 

So now we see what other roadblocks I run into. I'm oh-so-cautiously optimistic! Even though it's going to be nearly-empty for ages and ages! The inspection is Saturday. I'll take pictures.

omg house hunting

So, the owners of the last house now aren't sure they want to sell. They haven't given me the courtesy of telling me for certain, and the house is still listed, but it's more than 24 hours past when they were going to decide so... I guess the hunt is still on.

I appreciate that I'm getting a lot of sympathy from friends and acquaintances, and at the same time I find it irksome to hear that the market is crazy right now. I guess I can't think of a good way to offer sympathy, and the bottom line is I just have to deal with the market that I'm in, or get out of the market. Phooey. No wonder people went a little crazy during the boom time.

The value of a second visit

I revisited both houses dissected in my last post. If my house hunt continues, I will now require myself to visit every house twice before I make an offer, because the second look was very illuminating!

On second visit WOW was the small house small beyond reason. There is no way I could live there long-term, and in fact I probably would have had a panic attack after unloading my possessions into it. The living room could hold my dining room table OR my small couch, and it would have been hard to have guests stay longer than a night or two. That's just now how I see myself living.

On the other hand, the bigger/newer house continued to impress me. I had a friend along who talked about these new-construction homes with a contractor friend of his, and was assured they're built solidly because of all the codes. It's true this house was finished with mid-grade stuff like cheaper doors and lighting fixtures, but those aren't fatal flaws. The light inside is nice, it feels really spacious, it's got nice views of trees, and I think it would be plenty of house for me without being overwhelming. Of course I can't furnish it fully but that's okay - no rush on that front. And major bonus - the small front and back yards. I have been clear from the start I don't want to have a lot of yard to deal with. But the  yards are still big enough to each have a few raised beds, and I think I'll get a friend to design a pretty fence/seating area for the front to make it more welcoming to the neighborhood.

Another bonus is I already know people in the neighborhood - it's 2 blocks from where I'm staying now, and is around the corner from my real estate agents, who I really like. They're talking about throwing a party so I can meet the other neighbors they know. Exciting! 

In short, if it's not obvious, I'm putting in an offer on the bigger/newer house. I probably won't know til tomorrow since it's a bank holiday today; if the seller insists on seeing my pre-approval before accepting the offer, that will have to wait. So, we'll see.

Speaking of price/location

Today I saw five houses.
1) was nice and in a good location, but it's a big higher than I really want to pay, and we both think it'll go for even more than list. So I'm not going to invest any energy in it.

2) was surprisingly nice for the boxy boring house it looks like from the front, but it's not really in an interesting location, nor is it near friends, and then we realized it's near a not-so-nice housing complex (probably as bad as it gets in Portland, i.e. not so very bad) and my agent said we should forget it. I wasn't sold on it anyway so that was helpful.

3) a poorly laid-out newish construction home with just really weird layout and features... like a garage behind the house that you access from an alley, and there's a door to exit the garage by the sliding glass door of the house..which you can't unlock from the outside. So it would be useless as a come-home-with-the-groceries thing.

I did however see two houses that have me interested. They are about as different from each other as it is possible to be. Both are under my mental price cap.

House 1 is newish-construction, only three years old. I have a possibly irrational dislike of these houses, and my agent said she did too, but being inside is an eye-opening experience. It was built with quality ingredients like real hardwood, decent tile, granite in the kitchen, etc. It's got a small but nice backyard. The living room has a gas fireplace in it, and the main floor has a nice flow of kitchen/dining area/living area, and a half-bath. Upstairs are three bedrooms and 2 more bathrooms. In short it is way more house than I need.

Good things about it: it's walking distance to 3 friends' houses, it's walking distance to light rail, and it's got a nice garage (good for my car and bike; I don't really care that much about it otherwise). It's nicely set up for me to have guests visit. It has really good light inside it.

Downsides: you can hear the highway from it. It's not that pretty and it won't appreciate as fast as other houses do. Its taxes are a bit on the high side compared to other (older) houses. It's not near much in terms of a cute neighborhood/restaurants, but it's a half-mile from a grocery store, and has easy highway access.

House 2 - I mean come on - just looking at it, it's SO much cuter! It's also a lot smaller - only 700 sf in the main floor, and another 700 sf in a dry basement, accessed via an outside door. It's also been completely gutted and rebuilt and looks amazing inside. It has a main living area that flows into the kitchen, and two bedrooms that are connected by a bathroom.

Upsides: it's walking distance to a booming/up and coming part of town. It will appreciate much faster. It's cute. Much lower taxes - in all this house will cost $250 less per month than the other.

Downsides: huge yard. on-street parking only. much further-flung so it'll be a bit of a trip to visit friends (a 15-minute drive to the closest ones).

On paper, the bigger one makes sense. In reality I'm leaning toward the smaller one. I'm revisiting both tomorrow.

Further adventures in house hunting

I saw a few more houses earlier this week - four or five, I guess. They tend to blur together, mostly because I can tell right away I'm not interested in them, so I don't spend a lot of energy committing them to memory. Also, my memory is crap.

I'm seeing more today. I really like my agent - she knows that my price point is on the very low/competitive end of the market, so she's being creative. She is going to get in touch with real estate investors she knows to see if they're planning to sell any of their rental houses, and she's also talking to a contractor she knows who buys really sad old houses, refurbishes them from the beams out, and does a quality flip job. He's working on a house that is in a good-for-me location (and boy was it SAD when he bought it - I found the listing) but we both think he'll probably sell it out of my price range. But she'll ask and see!

Today we're looking at a house next door to the one I most recently didn't get, and then we'll look at a few houses that are in a much more far-flung part of town.

I have to admit I resent the fact that most of the areas and houses are too expensive for me. It's not anyone's fault, so it's an undirected resentment, but it just doesn't seem FAIR. Ah well, them's the breaks, and I guess I'll try to focus most of my energy on the price/expense/location questions.