This is the massive purple folder that holds all of the paperwork for the house. I’ve been carrying this thing with me everywhere I go for the past month and a half. This bitch is staying at home after tomorrow though, because Thursday is closing day!
Being that tomorrow is the light at the end of the tunnel when they will supposedly drop the keys into my hot little hand, let me tell you what a damn pain in the ass it was to make this house buying thing happen. Previously, all I knew about home buying I learned from real estate shows on HGTV. Turns out they’re not the most reliable source…
STEP ONE: Decide it’s time.
This kind of came out of nowhere. I mean, it’s always been the plan; this is what the savings account was for; the affordability of doing this is what attracted us to Knoxville. But it wasn’t actively pursued until January. During the holiday rush, I started asking, “what are we waiting for?” Well, there were a few financial things that would have been nice to have more solid before we started this process. But the tax credit extension pretty much overrides those other concerns. It would have been really foolish to wait any longer and miss out on an $8k tax credit that we couldn’t have if we waited a few months longer.
STEP TWO: Hunt down a good house.
We had to figure out exactly what we both wanted in a house. Here was our basic list:
- Older house with character
- Large lot and private backyard, preferably fenced
- Close to downtown and/or interstates
- 3 bedrooms, 2 baths
- Would be nice: fireplace
- Would be nice: open kitchen/living area
We only looked at 6 houses total. And the one we bought was the second one we saw. It has everything on our list except for the open floor plan, which is basically non-existent in older houses. Plus it fell in our price range of $125k-150k. I loved it from the first time I saw the pictures online. Danny loved it as soon as he saw the backyard. I thought it was pretty remarkable that we agreed so easily on this. It just seemed right.
STEP THREE: Make an offer and negotiate.
We relied on our Realtor for guidance on this. He also happens to be our landlord at our current rental house. His name is Rob and he’s great. So for many people there would probably be an additional step in finding the right Realtor to work with. But for us, there wasn’t much question that we would go with Rob when the time came.
So we went in $7k less than the asking price, with a bit of an inside tip that they were about to lower the list price by this amount anyway. The house had been on the market for five months, and there were no other offers coming in at the time ours was. So I would imagine a bidding war situation with a recently listed property would be 100 times more stressful, and something I’m glad I don’t know about. The seller basically accepted our offer on the price, but we went back and forth with a few counter offers negotiating items that would and would not convey with the house. And on January 17 at 5 pm we had an accepted offer. And that was the end of the fun and exciting part.
STEP FOUR: Get a damn loan.
I was smart enough to get pre-approved for a loan, so I knew ahead of time how much I could afford. I was not smart enough to learn about the different types of loans, or to understand what it meant to be pre-approved for an FHA loan versus a conventional loan. An FHA loan is a very affordable one, that requires a very low down payment. It also comes with its own set of regulations and inspections since it’s insured by the government. In this case, an FHA loan would not have been ideal for an older house like this one. The FHA inspector would have requested a number of improvements be made to the property before closing. That in itself is not a bad thing, but the improvements would be inconsequential to us and might have turned off the seller. An example of one of their stupid requirements is that the deck railing rungs are 5 inches apart instead of 4 inches. Do I care about that? Of course not, and it certainly didn’t seem worth it to ask the seller to fix it.
So it turned out that my credit was good enough, and my down payment was large enough that a conventional loan was also an option. It made the monthly payments about 30 bucks higher, but turned out to be a better choice for us. I know several other people who are pursuing FHA loans right now, and they seem a lot better suited to newer construction homes.
STEP FIVE: Get it inspected.
The inspection was just a few days after our accepted offer. I was prepared for lots of stuff to be wrong, but overall it turned out alright. In a 65 year old house, you have to expect that certain things are going to need attention. The main outstanding issue was that the previous owner had the washing machine dumping out into the sump pump well, instead of the wastewater line. This counts as “grey water” exiting the house and it’s illegal. So we got her to fix that, and negotiated on a few other smaller items.
STEP SIX: Find insurance.
I thought this one would be a breeze. “Oh I’ll just call State Farm, Allstate, and Travelers and see who gives me the best rate.” Not so easy as it turns out. Not one of those three companies would insure this house. Some companies will not insure any house that has fuses instead of a breaker box. This house has fuses. And as for the rest of them, it has to do with the siding that’s on this house.
You see, my friends, back in 1945 the go-to building material was asbestos. It was super strong and durable (it still is). the problem comes when someone rips it out of the building, or the area around it starts to deteriorate. When asbestos is intact and properly sealed, as it is in this home’s shingles, it’s perfectly safe. But when it comes time to replace it, or do some construction to your house, you need to bring in the professionals to remove it. And because apparently many ignorant people or their house guests might try to remove asbestos shingles from their homes, many insurance companies just won’t touch them.
After six solid hours on the phone getting insurance quotes, I found a locally-based insurance company that has special policies for older homes of this nature. It was another recommendation from my Realtor. I should have just cut to the chase and asked him who to start with.
STEP SEVEN: Unexpected bullshit.
What I was absolutely not prepared for was what happened next. A standard part of the loan underwriting is the appraisal, which was scheduled and seemed to go fine. Except for the fact that it was done the day after a big rain/snow/slush storm. There was a small patch of water on the basement floor, and the appraiser required an additional inspection by a structural engineer before approving the loan, to the tune of $350 paid by the buyer. I think the appraiser and the structural engineer were in cahoots. But then again, I just like saying “in cahoots.”
And of course the engineer gave a fine report, and the loan was approved. Then the underwriter demanded that the Realtors revise the accepted offer to change the verbiage of one item. And then it wasn’t good enough and they had to do it again. And then when all this back and forth crap went on for weeks, they realized, “wait, now we have to push back the closing because we don’t have enough time left.” So the offer needed to be revised for a third time, and all of our moving plans needed to be postponed another week. Total bank bullshit. Sorry, “bullshit” is the only word coming to mind for this scenario right now.
STEP EIGHT: Closing.
Now this is what’s scheduled for 4pm tomorrow. So all I know is that I have a cashier’s check made out for a huge amount of money, a time, and a place. And this better go off without a hitch tomorrow, or I’m going to completely lose it and go nuts on some poor random woman who works for a title company.
So with that, wish me luck that tomorrow is the end of this saga, so we can move in and move on.