The Real Estate Games.

From the time G started daycare at 4 months old until just about November-December, our routine involved walking into work.  We’d pack G up in the stroller and our little family of 3 would head out to start the day.  We’d walk about 1/2 way together and then Naomi made a left to head to the water taxi to take her across the harbor to the office and G and I would continue strolling straight into downtown.  I’d drop her off quickly at daycare and walk 2 more blocks into the office.  When my day ended, I’d swing by daycare and pick G up with the stroller and we’d walk home together.

I remember the day that the home hit the market because I had casually seen a new message in my inbox and opened it, but didn’t have any time to really look through it.  I was in the midst of our typical toy playing on the floor after our walk home when Naomi called, ‘did you see the new listing that came in?’ ‘Yes, that little tudor?  Something has to be wrong with it, did you see that price?  Let’s talk about it when you get home.’ I responded.  And that’s exactly what we did.  There were only 6 photos loaded with the listing which, as any recreational home searcher will tell you, means there is something wrong.  (Don’t even get me started on those that only post 1 photos, why bother, right?)  The photos of the interior were fairly telling.  We got a sense of the layout from the photos and saw that the stairs seemed to be in good shape.  The fact that it had a foyer added 1000 points (It sounds strange but a foyer, a true space to greet friends and family when they come to the house, was something we REALLY wanted in our next home.  Living in a 12′ wide rowhome where the living room was the foyer AND the hallway AND the playspace made welcoming people to the house with a baby and a boxer under foot very chaotic!) and when we saw the picture of the front facade and the backyard, we knew we had to call our realtor.

The price was VERY low for the area that the house was located in.  Sure, you could see wall studs in one of the pictures and the fact that they did not include a photo of the kitchen or bathroom, instantly lead us to believe that they were too horrible to consider keeping any part of, but at this price, it must be too good to be true.  Reading through the listing, we saw the previous sales price and then read the little line…bank owned foreclosure.  Ohhhh…now the price made all the sense in the world.  We went to see the house the following morning and found there was a reason there were not pictures of the kitchen, bath, or much else in the house because there was no kitchen, hardly a bath, and most of the first floor didn’t have ceilings, some didn’t have walls, and there was not a surface in the place that was not chipping and peeling.  Beautiful I tell ya, beautiful! We’re those people who yell at the TV when people are touring homes for sale and say idiotic things like, ‘I really love the place, but those paint colors, ugh, it would cost so much to change, must not be the home for me.’ and ‘we really considered this home but all the shrubs are overgrown and I really wish there was a deck, so I guess we’ll pass.’  We come to expect most of those things when we look at homes because we’d rather spend the money to make it what WE WANT instead of spending more to buy what someone else wanted (which in many cases, is nothing more than a Home Depot contractor special).  The layout of this house and the bones were great, almost exactly what we wanted and the things that were a little off, were easy to fix.  We stood in the backyard looking at the overgrown garage with our realtor and asked what purchasing a foreclosure really meant.  She was great and talked us through the process which is fairly similar to a regular home purchase but without the personal nature nor the ability to structure offers in anything more than bottom line numbers.  No escalation clauses, no hand written letter, no fixings.  You’re signing up to buy this place in the exact state it is, end of story.

Our realtor called the listing agent while we were there and was told that there were already 2 other offers on the house, so we decided to move quick and place an offer ourselves.  Having been disappointed with the previous 2 homes we considered, we knew we had to at least give this one a shot too.  It was in the right neighborhood, school, in the City, close to shops and necessities, could be a great home and had a great yard (somewhere under all the ivy, bamboo, and 3 years worth of dead leaves!), and with a low asking price, we could afford to renovate it before moving in.

All offers were required to include funds for renovations and homeowner occupant offers were being considered first by the bank that owned the property.  This could work out well for us as the first two homes we considered were lost to contractors who knew the value of the neighborhoods in which the homes were located. Both warranted them doing full renovations and reselling for a large profit.  We walked through with a contractor, set a renovation budget and scope of work, and included cash back from the seller for closing into our offer price.  Was it higher than the list price? Yes.  That price was solely listed to get multiple offers, that much was obvious.  Even with all the work to be done, the neighborhood alone was worth the list price.  We placed our offer.  We received a call that night from our realtor explaining that the terms we put into our offer were making it difficult for the listing agent to input into the bank’s evaluation system.  We talked pros and cons of changing our offer and after talking more about the house earlier that night, Naomi and I decided that we really did want to make it ours, so with this new information, we decided to simplify our offer and increase it slightly to make it a little more competitive.  Then we waited.

and waited.

and waited.

More than a week went by with not so much a peep.  We then received a call from our realtor.  We were in the running but the listing agent was making a round of ‘highest and best’ offers.  It was up to us if we wanted to participate.  This is where the real estate games really start.  You have no idea how many people you are bidding against or if there is anyone else for that matter.  You also have no idea if your existing offer is the lowest or highest as its current price.  Do we really want the house?  Is it worth ‘X’ amount more?  Isn’t our current offer good enough?  What would be the most we would want to spend on this house knowing all the renovation that needs to happen?  If we lost the house at ‘X’ price, would we be OK with that? These were just a few of the question that immediately came to mind at 7pm on a Sunday when we got the call.  Oh, and we had until 8pm to respond to the listing agent.

Talk about pressure, Naomi and I feverishly talked about the house, the price, what we’d be OK with as the minutes counted down.  In the end we took to heart the ‘highest and best’ offer request and did, in fact, increase our offer significantly to a point were we’d be OK if we lost the house knowing we did our best.  A quick call back to our realtor and our new offer was in.  Then we waited, again, for more than a week.

About 7:30pm on Halloween night we received a call from our realtor, hoping for good news, we anxiously picked up.  ‘You’re never going to believe this,’ she said, ‘but they are requesting another round of highest and best offers and we have one hour.’  Are you kidding me?!  Remember what I said about the games starting?  We couldn’t believe that we were being asked for another offer and, again, only having one hour to respond!  Needless to say, we were not happy.  What did they think our last offer was!?  We decided that after raising our first offer by a significant amount, that that was our highest and best and that we were not increasing it any more.  We responded back to the listing agent with the same offer and went about our night.  And not expecting to hear back for another week or so, we were pissed.

The phone rang a week and a half later, it was our realtor, we got the house!  How glad were we that we didn’t raise our second offer!?  I will spare you all the crazy details of scheduling 4 inspections back to back in one day and dealing with the mountain of paperwork needed for a renovation loan.  Let’s just say that a 61 day closing was still cutting it close.  It snowed on the day we closed which, for those that know us, know that is completely appropriate.  We are used to weather interrupting big events for our little family and have come to expect them.  What we were not anticipating was our Title Company finding 4 open mortgages on our home and trying to get an indemnity letter signed 24 hours before closing at the same time that the division of the bank, who owned the home and that they’d been dealing directly with, had a death in the office and the ENTIRE division was at the funeral and was on Central Time.  Needless to say, our 3:30pm closing time didn’t happen and we just barely signed the papers at 5:30pm on Friday, that 61st and last day of our contract.  How did we celebrate, you ask?  We took a bottle of champagne, carefully walked up to our new, snow covered pathway to the front door, turned on the one light in the dining room that had a bulb, plugged in a space heater (because the heat did not work), and sat in the corner drinking from the bottle while wondering what the heck we just got ourselves into.

We own this place?!  How did this happen!?

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The next post will have pictures of the house, we promise!  You’ve all earned it for sticking through all of this text!

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2 Comments

Filed under home buying process

2 responses to “The Real Estate Games.

  1. Joanne

    Holy moly! What an ordeal. I’m sure it will all be worth it though – and I can’t wait to see what you guys do with the place!!

    • Naomi

      Thanks, Jo! It really has been! We just kept telling ourselves there was a reason the house was so reasonably priced (and in the end it was still going to be worth all the headache since it’s such a great location)…because it was going to take a lot of patience to actually own and make into a great home! 🙂

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