Amy Austin | June 29, 2005

As I said before, you don't celebrate the purchase of a house until the closing is over, and the keys are in your hot little hands. For the last three or four hours, I've been re-visiting the local MLS pages for addresses to possibly visit over the next ??? days.

Our broker called us at COB today with the news that our appraisal was finally in. "Good news & bad news," she said. Just as I feared, the appraisal came in below the asking and contract prices. Not just a little, as I had thought was quite likely to happen (and secretly hoped, along with the seller conceding, of course), but rather big: $12,000 below our agreed price/$15,000 below their original asking. The sellers will be notified tomorrow, and then we'll wait to see if they will still sell at that price... but we don't think it terribly likely. At the very least, they will probably back out of their portion of closing costs, which will be a deal-breaker for us anyway. Oh, well... c'est la vie, eh?

Needless to say, we aren't too pleased with this turn of events, but we *are* learning about the true horrors of home buying. How 'bout you, Jerry -- things any better on your front???

Scott Horowitz | June 29, 2005
Just goes to show you, Kill them first and then take the house when it goes into foreclosure.

Denise Sawicki | June 29, 2005
Am I just crazy if I don't really want a house? I've got the money so that I could easily get one but I am so lazy, I don't know if I could take care of one. :( We got pre-approved for a mortgage loan but I don't know if I want to go any farther with this. I like where we're living now. We can bike anywhere we want, we have plenty of room, and we don't have to mow lawns, shovel snow, fix roofs, etc. It just scares me to be responsible for a house. I'm afraid it would blow up and my insurance wouldn't cover it and I'd be out all the money.

Amy Austin | June 29, 2005
Scott: True, that!

Denise: I don't really know you well enough to make that judgment (about being crazy ;-P), but I do know this: if you are renting, you are throwing money away. It may not be all at once because your house blew up (*so* unlikely, and I doubt that insurance wouldn't pay for it!), but you are still "out all the money" for the time that you continue to rent -- that's just plain mathematics.

I can certainly understand your hesitation, however, when you are accustomed to having very little to deal with in the way of home ownership and when you want to maintain your apartment-dwelling lifestyle, and I don't blame you one bit -- nobody likes these aspects of it! But there is also a certain pride that goes along with that level of responsibility and ownership.

Besides that, there are also plenty of options for those who want to own without all that sort of business. Don't know if they're much out there in Fargo (or wherever it is in that crazy Midwest you live! ;-D), but they are there. Townhouses and condos offer apartment-style living, often-times along with a homeowners' association (which can be a blessing and/or a curse, however) that covers these types of things (lawn maintenance, etc...), and you can still have the investment of ownership -- which only puts money in *your* pocket when you move, not your landlord's. Ultimately, of course this is something that only you can know to be the right move or not and is your (and Darrell's? ;-D) decision to make. But if you make decent money and your credit is savory enough, then I have to say that I do think it's crazy not to buy -- look into it carefully before you dismiss it!

Then again... the fewer buyers, the better for us! The competition for ownership is *INSANE*, and it's only bound to get harder in years to come, as it seems to me that wages are not keeping up with the costs of buying. If you buy now, you start to build equity, and that's important. I really feel like if we don't buy now, then we'll never be able to. And it's sort of true -- if you wait until too late in life, you will be carrying a mortgage into your seniorhood, when retirement and fixed expenses (Social Security???) will make it harder to do that. It just makes sense to me, but honestly, I don't really care what other people do.

Denise Sawicki | June 29, 2005
Well the insurance, property taxes,special assessments, repairs, higher utilitiy bills, all that crap added up doesn't seem to come out to so much less than the cost of rent even if one was able to buy the house outright with cash :P. All that stuff amounts to buying "nothing" as well... plus in the future, rather than having to keep a mortgage going longer, I'll have more money for a down payment. Assuming I don't become permanently unemployed first. But everyone pretty much agrees I am crazy, this is just one more aspect of it I guess...

Denise Sawicki | June 29, 2005
In fact the only reason I really have for consindering a house is so as to not have neighbors (which would not be the case in a condo). The neighbors haven't said that Darrell's music bothers them but if a mean picky neighbor were to move in (I've had ones who won't let me so much as turn on my stereo, no matter how quiet the volume, no matter how reasonable the time of day) we'd be in trouble.

Amy Austin | June 29, 2005
It's not about paying "less than the cost of rent" -- all those things are expenses, yes, but they are part and parcel of paying a mortgage. That isn't where the investment comes in. You are smart to consider having a larger down payment, yes, as it is true that this will give you shorter mortgage (if you choose, but usu higher monthly), lower finance rates, etc. But there's also no guarantee that by the time you decide to buy, the standard rates won't have increased dramatically, thereby making the savings negligible over the long run. Buying at the current rates, you can still reduce the life of your mortgage by paying double whenever possible. If you understand the way an amortization schedule works, this doesn't mean paying twice your monthly payment -- but twice the *principal*, which starts out as a fraction of what the interest payment is. By doing this, you reduce your principal and build equity faster. When you do that, you can reduce the life of your loan from, say, 30 to 20-21 years... all the while building equity such that you can re-finance at possibly an even lower rate, depending on the original loan (higher rates, of course, for mediocre/lousy credit and/or low down payment), or... it can also be a boost to you, should you decide to sell after only a couple of years.

As for neighbors and noise within a multi-family unit... well, that's just part of the shopping process, and renters usually turn over faster than homeowners. Like I said before, it matters not a whit to me when people say they'd rather keep renting -- I only think that you owe it to yourself to be thoroughly informed about the buying process when evaluating the decision.

Denise Sawicki | June 29, 2005
I'm just saying, even if I had 100% of the money to buy a house outright I'm not so sure I'd want one so I'm especially leery of taking out a huge loan to get one. That's just me and I too am in no way meaning to disparage anyone who makes a different choice. thanks for your opinions on the matter however... clearly I'm kinda set in my ways and it doesn't seem to help me make up my mind no matter how many people tell me all the reasons I'm crazy not to do this... The husband doesn't seem to have a strong opinion on the matter...

Amy Austin | June 29, 2005
Sure... gotcha.

However -- and I don't mean to press the issue, but it really does seem crazy -- why on Earth wouldn't you want to buy a house if you had the cash to do it outright??? I mean, if you owned outright, then there is *no way* that renting would be cheaper than the expenses incurred (unless you were Tom Hanks and bought the Money Pit! ;-D), and no matter what you decided to do in a couple of years' time, it would most assuredly be a pure profit situation!

It's good that you and Darrell are in agreement on the matter.

Amy Austin | June 29, 2005
Then again, perhaps I shouldn't ask such questions at the current stage of our endeavor. I was really looking more for support and encouragement... ;-p ;-D

Denise Sawicki | June 29, 2005
worst case scenario - a non-covered "act of God" occurs (whatever that means)... the house is gone, around this time I lose my job, nobody else will hire me because I'm insane, we die penniless and hungry thinking "just a moment ago we had enough money to buy a house, that money could have gone to buy us food and lodging for years to come..."

the thing is I'm *very* bad at dealing with people and I have the feeling that we're bound to get taken advantage of in some heinous way. Plus I'm not a responsible adult.

Denise Sawicki | June 29, 2005
hey, sorry to have turned this discussion around into my little piece of insanity. Back to your regularly scheduled programming. Someone offer Amy support please :-) You seem like a responsible adult who can handle this stuff. :P

Amy Austin | June 29, 2005
Hehehe... so, Denise, is the glass half-empty or half-full??? ;-D

Quite all right -- that's why it's a "discussion" after all... ;-)

Jackie Mason | July 1, 2005
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Denise Sawicki | July 20, 2005
Any luck yet Amy?

OK, this will sound even crazier, but I changed my mind, a house would be cool. Except we're very particular about *where* such a house would be. We went and viewed one that was quite lovely and in just the right location but we dithered too much in fear that there is something wrong with it that we're not aware of, and someone else got it. Now we're afraid that we'll never see a similarly nice one on the market. I'm sorry but I would still rather live in an apartment than either A. buy a house that is already falling to pieces or B. have to drive 6 miles any time I needed a loaf of bread or some such item, or in fact, C. have to pay outlandish fees twice the cost of rent or more for the next 30 years and wind up paying more than twice the cost of the house over that time! But I have ways of avoiding this if there are any houses on the market that are not outlandishly huge.

Also, I know it is not the party line for home-buying enthusiasts, but I would like to say that, in my opinion, one does "throw away" a lot of money when paying for a house... the interest and the insurance and taxes are things you do not pay when in an apartment and they do add up to more than the monthly rent on an apartment... this is not including the money that actually goes toward paying the principal and buliding equity. Interest is something I consider "throwing away" money because the only reason you're paying it is because you don't have the money to buy the house outright..... but I am just crazy that way I guess.

No argument-starting intended. I just got kind of excited about that particular house and was fantasizing about what we could do with it... so was Darrell :)

Erik Bates | July 21, 2005
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Scott Horowitz | July 21, 2005
Good thing you want to work in the residence halls at colleges and not teach, huh? hehehehe

Erik Bates | July 21, 2005
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Amy Austin | July 21, 2005
I'm sorry to hear that, Denise... sounds like that might have been a great place to start out. Thanks for asking, though, about our progress...

As a matter of fact, we finally got the results of our (second) appraisal on another offer we made a couple of weeks ago, and it was valued right at $100 over our price -- an even deal for the sellers. We were hoping for more, in order to use the starting equity to get money for a fence that we need for our pups, but... oh well. The inspection is tomorrow morning -- we'll see how that goes.

As for "throwing away" money in interest, Denise, "yes" and "no". Interest on a mortgage isn't just a penalty for not having enough money to buy outright... it's a sum calculation of how much money will justify lending a specified amount today, with adjustments for 30 years of inflation figured in. Not to be rude (I know you aren't trying to argue -- I'm not either -- just to illuminate), but do you honestly think that the prices you are paying in rent now are going to be the same over the next thirty years??? Not only is the answer to that a resounding "no", but "rent" is only a reflection of what the actual home/property owners are paying for their mortgages (you can usually figure on 10% over the mortgage) -- so either you are already paying for a mortgage that isn't yours (and then some), or you are just giving your money away to somebody who already owns outright... neither of which sounds very appealing to me! Not only that, but are you aware that interest paid on a home is tax deductible? In fact, this is the major incentive behind owning multiple properties... the primary profits don't actually come from a positive monthly cash flow of rent over the mortgage -- at roughly $50-200 a month for most landlords, that is actually rather negligible, even on multiple properties -- however... if you figure out what that landlord is making in tax write-offs (being in the "business" of renting property, he can also include both the homeowner's insurance and any expenses involved with the ownership of that rental property as part of that deduction), you will probably find that he is actually collecting a pretty sizable check from Uncle Sam every April! So how does *that* make you feel about throwing money away?!

Yes, home ownership is scary. But let me just tell you this... We are paying $650 a month to live in a property valued at no more than $60,000. For the entire time we've occupied this place, there have been some "issues" with the back door by the laundry "room" -- every time it rains, there is a lake inside the door, and you cannot tell where it's coming from, either. Our landlord seemed to think that the problem lay with the door, and so he replaced it about a month and a half or so ago. Problem *not* solved. It seems much more likely now that there must be something going on with the roof, or perhaps even the walls. But it took us 3 or 4 weeks just to get him out here. So now, what's even worse is that late Friday night (as I was climbing into bed), I discovered that the carpet next to our bed had become "squishy" -- which I mentally connected to the also recent discovery of buckling between the cheap vinyl self-stick tiles on the floor in the bathroom behind the adjoining wall (and now there is also moisture seepage coming up from between the seams)! On Saturday -- to my utter shock and horror -- I saw that this mystery water was now creeping up the walls in a corner of the room (including two electrical outlets), as well as up the legs of our furniture. Figuring the night before that it would probably wait for Monday (we couldn't tell where it was coming from here, either), I now made multiple unanswered calls to our landlord and left messages that he should get back to us "right away" -- that he would probably want to know about this situation *immediately*, as it seemed bound to seriously worsen at that rate. It's almost Thursday now, and still no return call or visit. The smell of mold/mildew (not the kind I enjoy, either) is starting to permeate the house, and we are dying to move out.

Everyone was shooting for NLT the 22nd for our closing, which is now set for next Wednesday, but hopefully, we will be able to start moving in this weekend -- after tomorrow's inspection... with which we anticipate no problems (optimism, Denise!), mostly because the entire infrastructure of this 1948 house has been renovated (all new plumbing, wiring, kitchen cabinetry/appliances), due to a tree falling on it in a storm not too long ago. (I figure this means that the house has "paid its dues" in potential trouble... for *at least* the time we will occupy it!) And even if not, that's what homeowner's insurance (with a $500 deductible) is for... there is hardly a thing you can imagine that would not be covered... even the groceries in your fridge. And I know that our landlord has to have coverage for this POS also, all of which can be written off... if he ever gets his ass out here to take care of it. We, after all, are powerless to do anything about it without him -- unless we want to pay for it ourselves (hell, no!) -- and it is definitely sucking.

So... given these current circumstances, Denise, which would you choose -- paying insane rent (with no return!) on a place that really is "falling to pieces", owning the place that is "falling to pieces" (but you could really care less if the place burned to the ground, because insurance will replace it, and it's all a tax write-off, to boot!), or moving into a brand new (essentially) place of your very own that you can write the interest off on and that will likely give you many years of trouble-free service with even minimal levels of attentiveness (especially without back-to-back low-income renters treating it like Motley Crue at a HoJo's)?

Of course, I realize that you must have better landlords than this, and so it's hardly a choice that would concern you as it does us at the moment... but I hope that it's at least given you some food for thought: 1) Not all landlords are created equal! 2) Interest is tax-deductible! and 3) Nobody cares as much about your surroundings/living conditions as YOU do!!!

Amy Austin | July 21, 2005
Also -- if you aren't aware -- contingencies for repairs is something that can be written into a home-buyer's contract. In it, responsibilties for any needed repairs discovered during the home inspection can be dictated, as well as a set amount that is not to be exceeded in order for the transaction to take place. In other words, you can decide that if the place needs more than $15,000 in repairs (a reasonable average amount) -- even if done at the seller's expense -- that you do not want to buy and will walk away. The reason for this is two-fold: 1) If the place requires that much to repair, it is likely to have been pretty neglected -- who knows what problems may lie ahead; 2) With the limited time that is usually involved in closing on a house (although this is subject to the convenience of buyer and seller), you want to allow an ample (or at least "sufficient") time frame in order for repairs to be completed. Rushed repairs can be just as bad as no repairs at all.

Denise Sawicki | July 21, 2005
Yeah, I can understand you wanting out in your situation. That does sound like a pretty horrific landlord situation. It's just that (as you surmised) our apartment has been quite satisfactory in nearly every way. I know the interest is tax deductible but as I understand it that wouldn't make a very big impact on me personallly... I'd have to ask my mom, the income tax expert... I also get the impression that my mom thinks we can't handle a house so I have to be careful to do it right so as to be able to prove her wrong. I realize there are perfectly valid arguments against my view on interest. As I said, I would really like a house - but only if it's the right one! It's too big a decision for me to choose something that we aren't happy with. I'd rather wait a few months for the right one to show up on the market, I guess. It doesn't seem that the competition for houses is quite as insane here as where you live. I know my requirement of being near grocery stores probably seems nuts to some people but my mental makeup is such that I really would go nuts if I had to drive everywhere. Walking and bike trips are the main way I clear my head... I could get around this problem I suppose but I really would feel better about the investment if I was able to choose a house and a location that I was actually happy with...

Amy Austin | July 21, 2005
Well, there's certainly no reason to feel bad about any of that... I think it's great that you like to bike and walk everywhere, and I don't think it's something that you should have to give up. Personally, we like a more rural environment (=longer drives), and that is a definite drawback to it. The place we are trying to get right now is 15 miles out of town -- *very* small town living (the post office, which is close enough to walk to, doesn't even deliver to most of the town -- they have PO Boxes instead of mailboxes there) -- but there is also still a Piggly Wiggly and a Handy-Mart (as well as a Family Dollar and a Dollar General, which should also give you an idea of the economic status of the town) in walking distance.

If you have the luxury of time and a slow market in which to shop, then there's no reason not to wait for the house you really want to appear -- it will... I wouldn't try to tell you otherwise. If it weren't for our specific situation (shitty rental, E deploying next month, hot market, 3-4 year rotation out of here), we wouldn't be all rushing into it, either. In fact, I would *much* prefer to casually browse houses in the much the same way that some people decide to go and test drive expensive sports cars -- without a care and no pressure whatsoever to buy.

Scott Hardie | July 22, 2005
Am I the only one who thought of "Dark Water" while reading about Amy & Ed's rental problem?

Amy Austin | July 22, 2005
Nice. I'm glad I haven't seen it yet, and I think I'll wait until our move is complete. ;-p

BTW, our house passed inspection with flying colors -- totally clean bill of health, and the inspector even called it "better than new", due to the quality of construction in 1948. He frequently takes part in modern house-building and said that such a house built in the same way today would not be affordable for us. Way cool. We are just waiting to hear if we can take early possession/occupancy starting tomorrow, and we'll close next Wednesday -- the wait is agonizing.

Scott Hardie | July 22, 2005
Great news. Good luck Wednesday.

Dave Stoppenhagen | July 22, 2005
Congrats Amy and Ed. On a side note my parent house has been on the market for about a year now, they live on 2.3 acres and they finally have a contract on it. My joy comes because it's not going to the heinous bitch that was trying to seriously low ball my p's with tons of contigencies. A second couple came in at the last minute and offered my parent more money and fewer contingencies

Scott Horowitz | July 22, 2005
I wanted to buy property, but NY property is threw the roof. In crappy neighborhoods, houses are going for $500k~$'s insane. So, I'm going to rent until I win the lottery (or knock up a rich girl). First I need to move out of my parents house (which is happening at the end of the year)

Scott Hardie | July 22, 2005
Dave: I don't even know the case and that sounds very satisfying. :-)

Scott: I sympathize. Prices down here, while not astronomical like NYC, are ludicrous, more than twice what they should be. Some people just need to live in the city that badly, I guess.

Amy Austin | July 23, 2005
Thanks, guys, and "congratulations" to your p's there, Dave... I agree with Scott.

And I'm glad that at least *somebody* is getting some satisfaction at the moment... Unfortunately, we were told today that the owners did not want to let us take early possession -- apparently due to a bad scenario that they had in the past where they had allowed the same, and not only did the buyers not end up buying after all, but I guess they caused some damages, too. I really have to question, however, the relevance of this anecdote, though -- did all this happen in a mere 5 days' time (the length of our wait for closing), or was it a rent-before-buying situation that lasted a bit longer? Had these folks actually done both the appraisal and inspection in good faith, with purchase so imminent as to be "a sure thing", or did the transaction fall through *before* all of that was done (which seems much more likely to me, unless the buyers were stupid enough to attempt some other major purchase -- like a car! -- in the days before their closing)?

Not to mention that we were kept waiting for over a week on the acceptance of our offer while these folks were away on a camping trip. (Our lucky break in finding this house was that it had already been under contract -- with our agent as the finder -- but because of that couple's inability to secure a loan, it fell through. So it was our agent who was presenting this turn of events -- along with a new offer from us -- to the listing agent and sellers... on the Saturday of the 4th of July weekend. So we spent a whole week -- flanked by both weekends -- agonizing over *the acceptance* of our offer!!! Grrr...) Sure, I suppose this isn't their fault -- they thought they had buyers, after all -- but I find their total lack of concern for our situation very irritating... especially since our replacement offer and pre-approval for a loan prevented any lapse of progress *for them*, while on our end, their delay held up both the appraisal and the inspection to the point of pushing the closing to next Wednesday, instead of TODAY (as we were originally shooting for in our contract!) ARRRGGGHHH!

So now, Ed goes back to work on Monday after three and half weeks of leave -- the whole point of which was to facilitate our move (into the previous house that would have closed on Monday but fell through on the appraisal before our current offer) -- and we will have approximately 4 days to evacuate and clean this hellhole so that we can be fully justified in not paying any rent for August. Not only that, but it will be even harder to get a truck for a summertime move that close to the end of the month... which is also falling just perfectly on a weekend.

(sigh) I am so damn pissed.

Scott Hardie | July 24, 2005
Sorry Amy. I've been in a similar predicament so often I've lost track. It's so frustrating. You try to move on your schedule, but nobody else out there gives a damn what your schedule is. :-(

Denise Sawicki | August 9, 2005
Hey Amy, glad your house stuff is coming along. I hope unpacking goes OK.

We decided on a house but they seem to be taking a while to do the appraisal. We already paid for the home inspection. I hope the appraisal works out OK... I'm a little worried that we acted too fast and bid more than the house was worth. Seems like I will probably be out a lot of money for inspections and such even if the appraisal comes out too low and they won't give us the loan.

Amy Austin | August 9, 2005
Thanks, Denise... I hope so, too! ;-)

Oh, no! Didn't I tell you that if there was ANYTHING at all to be learned from our experience that it was to get the appraisal done FIRST!!!? I can't stand to think that you might wind up out more money than we were, but I really hope that your appraisal goes well. Were you offering a competing bid, or did you just give what they were asking for it? Why do you think that it might be too much???

Denise Sawicki | August 9, 2005
Well they required we do the inspection within 5 days of making our initial offer and it seems the time they do the appraisal is totally up to the bank. It'll probably be fine I guess, I just got worried because these other bigger houses in the same neighborhood came on the market for like $5000 less... I'm a big worrier...

Amy Austin | August 9, 2005
Well, size certainly isn't the only factor in house appraisal. Depending on the age of these houses, it could be all about the amenities/updates/renovations (esp. the kitchens & bathrooms -- modernity there is critical!) -- so if you know that this house has nice, up-to-date amenities, then there may be no reason to worry. I would be sweating the other houses, too, though... wondering about them to no end. A big part of the appraisal is "comp value" -- and that comes from what has already sold in your intended neighborhood... but again, valuation is both formulaic and subjective. It all depends on what your particular appraiser sees in your prospective house and the comps. They aren't just looking at figures, but a narrative of all that makes up the dollar value -- they have access to more than the real estate agent does, and they can look at a larger radius to get those comps than the realtor does for a CMA, too (that's a free "unofficial" appraisal of a house based on market value that realtors give to potential sellers to help set an asking price) -- so, if there's a bigger/wealthier neighborhood really close by, then there may be no need to worry, either.

What concerns me is their stipulation about the time frame of your inspection -- that seems awfully fishy to me, and I wouldn't have agreed to that at all without extraordinary circumstances of some sort. It sounds pushy and fishy -- a bad combo in house shopping. Do you know why they did that? And who is "they", anyway -- the sellers? That sounds an awful lot like someone wants you to be locked in by the money you've spent on inspections! You've only paid for a basic engineering/structural inspection, right? (Termite inspection should be something that the sellers have to provide.) What were the results of that, or do you know yet??? (It's a really good idea to be there during the inspection, too... I hope you were.)

But you're right -- scheduling the appraisal is totally up to the lender (or the broker, if you have one), and if they're taking their time about it, I am sorry for you. Ours took 10 days from the actual visit to the completion of the paperwork, too (27-28 pages of narrative, we were told, due to the age/condition of the house -- a full explanation of renovations was needed to justify such high valuation on a 1948 house), so that may be what you are still waiting on -- no telling, unless someone is holding your hand or you're barking up their butts about it. I guess all I can tell you is "good luck!" :-\

Denise Sawicki | August 10, 2005
Wow Amy I hope you're not feeling obligated to keep replying to me with these long technical explanations. I was just kinda posting what's on my mind rather than demanding such stuff :).

The inspection was fine. no termite inspection. The house is only 5 years old. It had a litttle dent in the siding where someone ran into it with a lawnmower I guess. It's our real estate agent who told us we had to arrange the inspection right away (we had a contingency that the inspection had to be good in order to buy the house).

Clearly size isn't the only factor... it's just these are all in the same small neighborhood, all made by the same builder, and I was a little anxious that I saw one go on the market for a lot cheaper, more square feet, two years newer yet, otherwise quite similar according to what I can read on the web.

Yeah, we are going for one of those ugly new neighborhoods where the houses all look alike and are all very close together and either grey or beige. It's not everybody's cup of tea I know. But we really have no use for a large yard and don't want to mow one and the place is so lovely and cozy inside with a really awesome looking kitchen... and I would be able to walk to work + walk home every day for lunch... We weren't originally going to go with that neighborhood but it kinda worked out that way because that's what kept turning up that was in our price range. We may be paying extra because of the kitchen, as I think it is nicer than those in some of the other houses in the area.

I guess if you do the appraisal first you risk spending the money on the appraisal only to find out the inspection turns up something bad...

Amy Austin | August 10, 2005
No, no obligations, Denise -- just trying to be nice/helpful... I wouldn't tend to think you "demanding" in any sense of the word. ;-)

I just find it a little odd that you were pushed into an inspection -- especially on a house that is only 5 years old! I realize that there may be variance between our states in the area of realty, but here an inspection is totally at the discretion of the buyer. Of course, it is strongly recommended... but on a house that "young", we personally would have foregone the inspection for a home warranty instead. The cost is about the same, and a warranty would actually serve you better, because an inspection is just that -- an inspection. Once that guy walks out your door, *anything* at all could happen, and it wouldn't matter one whit to anyone but you after you wind up with the bill. Anything under 10 years old should still carry a structural warranty from the builders -- so inspections are really only necessary for older homes (or else "peace of mind", I suppose... although like I said, it doesn't really protect you from anything at all -- they aren't even there to estimate the expenses of possible repairs!). I am really surprised that was a contingency -- it isn't something that a seller is likely to foist upon you, and if the realtor did it, then I am guessing that it was a CYA maneuver to ward off any future wrath from you, the buyers!

And yes, if you do the appraisal first, you could still be out the money for both... but it is far less likely, since a) the probability of inspection "issues" is much lower than that of misjudging the fair market price of a property, and b) even if there are any inspection issues, they shouldn't kill the deal, unless the seller isn't willing to pay for the repairs... which is what should actually be the stated contingency. Also, as I stated in a post above, you can stipulate that repairs over a certain dollar amount -- even if done at the seller's expense -- will be a deal-breaker, for the reasons that I also mentioned above. These are contingencies that will actually protect you... not a rush to complete inspection before the appraisal even happens. It sounds to me like you are only dealing with a listing agent? (That is to say, the seller's real estate agent... which is a bit different from a buyer's agent, as he/she will be primarily concerned with the seller's best interests over yours -- and what leads me to believe that you were prematurely pushed into inspection.)

That's just my amateur, non-professional opinion on the matter, of course -- I may be completely off base here. But I think I understand the way it works here in NC pretty well, and our agent even suggested that I ought to think about getting a license myself. (Not bragging, just stating that my interest and understanding of the matter was such that I was/am seriously considering this for my next livelihood.)

Denise Sawicki | August 10, 2005
No, the sellers didn't put in that contingency - I requested the contingency that I can get out of buying the house if the seller won't pay for any repairs suggested by the home inspector, and the real estate agent said this meant I needed to arrange the inspection within 5 days, which I just thought was standard around here. My homebuyer's class and everything else I read had indicated that the inspection is essential and that the home warranty is kind of a dumb thing to pay for so that's why I went that way. Argh.... maybe all these things were only talking about older homes.

Also, I do have a buyer's agent and that's who I'm referring to when I say "the real estate agent".

I went in and edited the rest of my comment since I get overly paranoid and shouldn't really voice these things. I think it'll be fine. Just because it's *me* involved, though, I tend to have my doubts.

Further edit (so as not to clog up the place with new posts): I just got an e-mail saying the appraisal came in anyhow and it's fine. $800 over my offer.

Amy Austin | August 12, 2005
Hey, that's great! We came in at a mere smidgeon of $100 over ourselves. (I was hoping for more, of course, but hey... equity is equity, right?)

You're right about commisions, Denise... whatever way you slice it, that's where their money comes from, and it *is* really hard to have trust and faith even in a buyer's agent -- realtors can seem so much like used car salesmen, too! (Boy, you really are paranoid, editing your comment! ;-D It's cool, though.)

Well, here's hoping that rest of your deal goes smoothly -- congratulations to you and Darrell!

Denise Sawicki | August 25, 2005
I thought once you get the key your troubles are over. I got the key and the key won't open the house. Is this another patented instance of Denise being retarded or did someone else screw up? I left people some messages, I'm waiting to hear back...

Denise Sawicki | August 26, 2005
OK I wasn't being retarded, the real estate agent gave us the key to a different house by mistake (they looked just alike). I got the right key now and got in the house and all is well.

Scott Horowitz | August 26, 2005
Was the wrong house more expensive? You maybe should have taken it?

Denise Sawicki | August 26, 2005
Heh... I wonder how long that would have lasted before I got arrested.

Scott Horowitz | August 26, 2005
Worth a try, no?

Lori Lancaster | August 26, 2005
[hidden by request]

Amy Austin | August 26, 2005
Thanks, Lori! (Sorry about that, Denise... I guess you just amended what signifies the finality of a closing: Don't celebrate until the *right* key is in your hands!!! :-\ :-p ;-D)

Scott Horowitz | August 26, 2005
My motto: "Don't celebrate til she's naked!" :)

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