Our Insane Home Buying Experience

It's been a loooooooong time since I've posted anything, mostly because there no longer seemed to be much point in writing about a process that seemed to be made up of nothing more than endless waiting.

But we finally completed the process of buying our first home. Thank goodness.

Here are the numbers:

331 The number of days from when we placed an offer on our new home to when we closed
13 The number of months from when we started looking for houses to when we actually bought one
947,281 The number of times we considered giving up altogether
1,360 The number of dollars that almost derailed the entire deal

In sum: This process took forever. It was annoying, frustrating, agonizing, and horrible. But we got the house we wanted, for the price we wanted, and thanks to the long wait, it's worth a lot more than we paid for it already. All in all, a good situation.

So here's what's been going on:

As of Christmas time, we were still waiting for the seller's two banks to approve the sale price for our short sale. By February, both banks had given approval, but they didn't agree about who got how much money. Bank A wanted to give Bank B $2,040. Bank B would not accept less than $3,400. So they commenced haggling. Over $1,360. Apparently the nation's banks are so hard up that they have to worry about $1,360.

Anyway, come April, we and the sellers were both saying, "Fine, we'll pay the difference!" So the banks said, "Okay, you have exactly 2 weeks to close before this approval expires." For 11 months, we waited. And waited. And waited. All of a sudden, we had to MOVE, MOVE, MOVE!

So we contacted our lender. We got an appraisal and mortgage approval in record time. We were good to go. On Tuesday of this week, our agent called and said, "Ok, we are closing on Thursday at 9 AM. You have to pay the $1,360 at closing. But we're good." Fine. Great! Let's close. Twenty minutes later, she called back: "Your lender says you can't pay the $1,360 because otherwise they'd have to redo the loan approval."

So the day before closing we were at a point where the second lender refused to close unless they got $1,360. Both us and the sellers were willing to pay the money. And neither of us was ALLOWED to.

To make a long story short (not that that's possible at this point), our agent and the seller's agent had to agree to deduct the money from their commissions in order to close the sale. So thank God we had some pretty amazing people on our side.

But wait! Of course it can't be that simple. There was still the matter of the HUD, which had to be approved by our lender, and both of the seller's banks. As of 5 pm the day before closing, we were still waiting on the seller's second bank to approve.

9 am rolled around. We drove to the attorney's office, still not certain the closing was going to happen. (The sellers, who had relocated to a neighboring state, had driven through the night to get there, so they had it way worse.)

At 9:30, halfway through signing the papers, the final approval came through. I don't think I've ever been so relieved in my life!

So now we are homeowners.

God help us both.

I’m Dreaming of a Bleak Christmas

When my brother and I were kids, we used to sneak up to the attic to secretly unpack Christmas decorations the week before Thanksgiving. As soon as the turkey was put away, we were yanking lights, garlands, and fake trees through the hole in the ceiling, heedless of the shower of plastic pine needles and leftover ornament hooks.

This obsession didn’t fade with adulthood. In fact, for the past five years or so, my brother has decked our family’s home out so much that people specifically seek out our house to drive by. It is so bright, you can see it from space. It’s a bit annoying for the house’s inhabitants, though, because you cannot use the microwave or turn on the light in the downstairs bathroom without either going outside to unplug Christmas lights or blowing a fuse.

This is the family I come from. We are not Scrooges or Grinches (with the possible exception of my grandfather, who insists that Christmas is a bunch of hooey and yet cleaves to holiday traditions with surprising intensity).

So why don’t I have any Christmas spirit this year?

Normally, I would already have forced Dear Hubby to help me select a 10+ foot tree to strap to my tiny sedan. Normally, I would already have dug into the depths of our jam-packed storage unit to find my many boxes of Christmas decorations. Normally, our kitchen would already be coated in flour and powdered sugar and smelling of chocolate, and spice, and everything nice.

None of these things has happened yet. And none of them are likely to happen this year.

We’ve been in the process of (very) slowly packing some of our unnecessary belongings (like my husband’s ridiculously massive collection of books). It just seems sort of stupid to unpack boxes of Christmas decorations at a time when I’m in the process of packing the rest of my belongings.

Add to this the fact that we are newlyweds. We got a lot of wedding gifts not too long ago (and are still working on those Thank You notes -- my apologies to anyone reading this who was generous and kind enough to give us a gift and who has not yet received my thanks). As a result, my kitchen, which was pretty small to begin with, is now overflowing with new appliances and servingware that I have nowhere to store. Try baking dozens upon dozens of cookies in a kitchen with a mere 2 square feet of clear counter space. So not happening.

Oh, and let’s not forget the fact that it is now early December and yet it is 75 degrees outside. It’s hard to feel Christmasy when you’re wearing t-shirts and flip flops.

The one bright side to my lack of Christmas cheer: Because I’m not going hog-wild on baking and decorating supplies like I usually do, Dear Hubby has agreed to let me loose in the home improvement store after Christmas to buy decorations for next year (when we WILL have a house, dammit!).

Lesson Six: Be Careful What You Wish For

When House #2 was still on the market after 6 weeks, we decided to submit our offer again in hopes that they would see reason. They did. They met us halfway, meaning that we could purchase House #2 if we wanted to.

Now, I feel a little silly saying this after the amount of time I have spent a) wishing desperately for a house, and b) complaining about Fannie Mae’s unwillingness the negotiate the price of this particular house, but...

We decided to walk away.

At first, there was a moment of thrill -- SOMEONE WANTS TO SELL US A HOUSE! OMG!

But then, we started to actually think about our options. At this point, we basically have two houses to choose between: Dream Home and House #2.

I like to make lists. I spend way more time making lists than doing things that are on my various to-do lists. I just like lists. Dunno why.

So we decided to make pro/con lists.

House #2 Pros and Cons

• Huge. I mean GIANT. More rooms than I know what to do with.
• Built in bar. (Okay, in a few years when we have kids this’ll mean a lot less, but for right now...BUILT IN BAR, PEOPLE!)
• Available now. We could actually leave our crappy apartment.
• Did I mention that it’s huge?
• Big backyard that doesn’t look like a jungle.
• Not so great schools.
• Older, slightly decaying neighborhood.
• Local miscreants like to break windows.
• Requires roughly $10K in renovations right off the bat.
• Potential problems that could be revealed in an inspection.
• Tiny kitchen.
• Less possibility for really good return on investment.

Dream Home Pros and Cons

• Good size, but we’ll grow out of it when we reach 2 kids.
• Very well maintained -- new roof, new furnaces, new A/C, new hot water heater.
• Pretty neighborhood.
• Up and coming location.
• Great schools.
• Needs little to no work to be move in ready.
• Already passed inspection.
• Amazing return on investment potential.
• Backyard looks like a jungle. The entire thing pretty much needs to be bulldozed.
• Financing will be a bit of a headache.
• God only knows when Nationstar will approve the sale. We could reach retirement before closing on this house.

We debated, but it was clear which house we really wanted. We don’t want to buy a house just for the sake of buying a house -- we want to buy a house in order to secure the long-term financial security of our future family. That means buying a house that will give us a great return on our investment. That means House #2 -- and its built in bar -- are out.

I wonder if I could build a bar into the Dream Home? Bet I could...

Lesson Five: Fannie Mae Has No Idea How to Price a Home

We got word back on House #2.

We offered them 10% below the list price because the house needs a lot of work. We’d need to do a renovation mortgage.

A basic primer on renovation mortgages: You offer x dollars for the house itself. You do y dollars worth of renovations. After the renovations are done, the house has to appraise for x + y.

With this information in mind, we knew that the house would need to be valued at the amount we paid for it, plus the $7-10K worth of needed renovations. That’s why we offered a lower amount.

Fannie Mae, ever the generous soul, came down from the list price by a whopping $400. (That’s about .3% of the list price.)

We came up a few thousand dollars and countered, including an explanation of the needed repairs. They responded with the same offer, absolutely refusing to come down more.

6 weeks later, the house was still on the market with no offers.

A New Contender and FHA Fails

Since our dream home is taking absolutely forever to come through, we’ve been looking at other houses. Yes, we’re cheating on our dream home. But hey, we can’t afford to rent forever.

We’ve found another contender. House #2 has several hundred extra square feet. A 1980s split level, it makes up for its dated style with a sprawling floor plan that includes 5 potential bedrooms, 3 full bathrooms, and an extra den. PLENTY of room to grow (in fact, I’m not even sure I have enough furniture to fill it).

The problem is that House #2 isn’t in the same area. It’s in our less-preferred location: a school district that isn’t as good as the dream home, a neighborhood that’s older and not as well maintained. The neighborhood is also home to a gang of miscreants who seem to get their jollies by throwing rocks through windows, as evidenced by the THREE broken windows in House #2.

The broken windows bring us to another problem: House #2 doesn’t meet FHA standards. In order to get an FHA mortgage -- which is what we need because FHA mortgages let you put down 3.5% instead of 20% -- the house has to meet a list of minimum requirements. Among those requirements is “no broken windows”. Whoops.

Another FHA fail: House #2 has no stove. FHA requires that the house have a functioning stove. Oddly, the house does not need to have a fridge in order to qualify for FHA. For some archaic real estate reason, a fridge is considered personal property, but a stove is considered part of the house. (Personally, I’ve lived without a stove with minimal problems, but I don’t think I could go without a fridge.)

And the final problem: House #2 is a Fannie Mae property, but it’s way overpriced. Considering the amount of work it needs just to meet basic FHA requirements, there’s no way it could possibly appraise for what they’re asking.

So House #2 is massive, but needs work and isn’t in world’s best neighborhood.

The dream home is sizeable, needs very little work, and is in a gorgeous neighborhood.

We still offered on House #2. Will let you know what happens!

Lesson Four: You Know You’re Getting Older When You Get Excited About Furnaces

Despite not having a binding agreement, we went ahead with our home inspection on our dream home. (To recap: This is the short sale that we offered on way back in May; under the belief that we were just days away from having a binding contract, our agent recommended getting the inspection out of the way. This was about a month ago, and we still don’t have a binding contract. See Lesson Three: Nationstar Sucks for more.)

This would be a good time to say that we LOVE our home inspector. He came highly recommended by a friend of ours, and we think he is awesome (especially since he did two home inspections for the price of one because he felt bad for us).

After our first experience with a home inspection (the highlights of which included an overflowing septic tank, an A/C with most of the guts missing, and best of all, MASSIVE termite damage), we approached this one with a jaundiced eye. Sure, the house LOOKED great and it SEEMED to have been well maintained...but it could harbor giant sewer rats inside the walls. Who knows?

Our home inspector, Ray, wasn’t going to go easy on the house. While waiting for our agent to arrive and unlock the doors, he began his inspection of the exterior, carefully (and frequently) pointing out defects -- there’s some siding that will need to be replaced, there’s some moulding that is starting to rot, those windows need to be re-glazed, etc., etc.

But hey, that’s the mark of a good inspector: Someone who will tell you about EVERY TEENY TINY MINOR DEFECT. Sure, the list of things that need to be repaired seems dauntingly long, but 9 out of 10 of those items are simple, DIY-friendly, and (most importantly) cheap.

This trend continued inside the house. I won’t bore you with every minor detail. Instead, let’s hit the highs and lows.

The mousetraps in the kitchen -- admittedly somewhat worrisome. We have three cats, but they’re all giant chickens and can’t even manage to kill bugs never mind mice. I imagine myself coming home one day to find one of my cats cornered by a little mouse.

The many DIY-done-wrong projects -- frustrating, but not overwhelmingly bad. The worst one is the master bathroom. First, they re-tiled the floor. Great, except they tiled around the toilet in such a way that the toilet can’t be moved without ruining a good portion of the floor. And the toilet’s on its last leg. Then they redid the ridiculously TINY shower. Only they didn’t put shower-grade light fixtures in, they added a second shower head that serves no purpose and is disconcertingly close to the non-water resistant light fixture, and the knob to the turn the water on wasn’t installed right, so water runs inside the wall anytime that shower is used.

As a DIY-er, the quality (or lack thereof) of workmanship in these projects makes me sad. I want to track the homeowners down and give them lessons in tiling, laying carpet, and hanging blinds because they failed at each of these projects.

But then there were some highs, too. Best one of all: The house has two furnaces and both are practically brand spanking new. YES!

It was while Dear Hubby and I were dancing for joy upon hearing this news that we both realized...we must be getting older. Think about it: When you were younger, did you ever once give the slightest thought to a furnace? Probably not. You also probably didn’t think about shingles, siding, A/C units, or hot water heaters. Nor did you think about interest rates, loan points, closing costs, escrow, or title insurance.

I’m convinced that buying a house automatically makes you a grown up. Getting married was stressful, but it was stressful in the way that planning a big party is stressful and not in the way that spending your entire life’s savings on four walls and a roof is stressful. Buying a house forces you to think about your future in concrete terms -- how long before we have kids? Will we still have enough room? Will the school district be good enough?

As daunting as the prospect is, we’re ready to grow up. Now we just need that house.

Lesson Three: Nationstar Sucks

I promised to tell you the story of our ridiculously prolonged short sale. Well, gather ‘round my dears. Boy, have I got a story for you.

Back in May, when we first offered on our dream home, we thought that ours would be a normal short sale – by which I mean, frustrating and prolonged, but still predictable. We surely thought we’d be in our new house by now. Instead, 7 months later, we’re not even close.

The homeowners, anxious to get rid of their extra mortgages, leapt at our offer. The next step for any short sale is for the lien holder – or in our case, two lien holders because the homeowners had taken out a second mortgage – to approve the sale price.

The “first” lien holder (basically the primary mortgage lender) was a bank called Aurora. Facing financial troubles, Aurora was more than happy to accept our offer. Then we had to wait for the second lien holder, SLS, to approve the price.

While we waited – VERY patiently – for SLS to approve the price, Aurora got bought out by a third bank, Nationstar. Because SLS is apparently run by a bunch of stupid-heads (that’s right, I said it), they decided that this was a good reason to start the approval process all over again. *Facepalm.*

At first, Nationstar seemed reasonable. They agreed to honor Aurora’s original approval and allow the sale to continue. We breathed a sigh of relief.

But then, Nationstar decided that SLS was taking too long. Aurora’s approval was set to expire at the end of July, and SLS wasn’t coming any closer to approval. Nationstar came back and told us that they would not extend the approval, which meant that if SLS didn’t approve our price by the end of July, Nationstar would start its own approval process from the beginning.

Needless to say, SLS didn’t approve by the end of July. Nationstar went back to the drawing board. Because Nationstar went back to the drawing board, SLS figured it would be really fun for them to start over (AGAIN) as well.

So as of August 1, two and a half months after we placed our offer, we were back to square one.
By this time, I was a mere two months away from the wedding I had been carefully planning for over a year (for anyone who likes wedding stuff, check out this tangential post on our wedding). Wedding planning consumed my every waking thought, so thoughts of the house and the banks took a backseat for a while.

Then, in September, something finally happened: Nationstar came back and said, “We won’t pay closing costs unless you get prequalified through us and use us as your mortgage provider.” We already had a mortgage lender that we were very happy with, but we figured it was worth the sacrifice to get a home that we really loved and we simply couldn’t afford to pay closing costs in addition to paying for a wedding, a down payment, and escrow.

When we called to get prequalified through Nationstar, the representative told us that he had spoken to the underwriters (those mysterious people who approve just about everything relating to purchasing a home), and that he thought we should hear something about the approval within a week or two.

Much rejoicing ensued.

Three days later, the same guy from Nationstar called Dear Hubby and left him a voicemail stating that our house had gone into foreclosure, but he stopped it in time so everything would be okay. This, of course, would mean a further delay in approval, which he was sure we could understand, and so we would hear something within 30 to 45 days.

Shocked, we immediately called our realtor, who called the seller’s realtor, who said that there was ABSOLUTELY NO POSSIBLE WAY that the home could have gone into foreclosure. Apparently, the homeowners had been paying BOTH mortgages since the day they moved out, which at that point had been 9 months earlier. What’s more, he checked the county listings and no paperwork had ever been filed to foreclose on the house.

We were left with the very uncomfortable notion that we were dealing with a bank that was not only slow and incompetent (and run by retarded, feces-throwing monkeys), but one that also lied to us.

We returned to the waiting game. In the meantime, we got married (yay!). When we returned from our honeymoon, we contacted our realtor. We had finally decided to heed her advice and go back to house hunting. At this point, 5 months after we placed our offer on the house, home prices had gone up substantially. We found that we would not be able to afford a house that was as big and as pretty as the one we had offered on months earlier. Thoroughly depressed, we waded back into the market anyway.

The universe being what it is, Nationstar finally came back with an update the same day that we placed an offer on a different house. They decided that they wanted us to up our offer by $2,000. Knowing that the area’s prices had increased by a much larger margin, we agreed to the new sale price. At this point, we, our agent, and the seller’s agent all agreed that we were mere days away from having an agreement. We went ahead with a home inspection (which went swimmingly – more on that in another post). We waited.

Nothing happened.

Since then, we’ve been looking for other houses. We’ve seen houses without toilets, houses with bad roofs, houses with cramped floor plans, houses with holes in the walls, houses with rooms that have no windows, houses with broken windows, and houses with wood paneling on every wall.

And so we wait for Nationstar.

Because Nationstar has proven to be so pathetically incompetent, we’ve had second thoughts about using them as our mortgage lender.