Warning: Fair amount of real estate explanation and lingo in here….
Last Thursday night, we toured the only TWO houses within 15 minutes of us that were not a short sales or REOs (the market here is CRAZY, I tell you). Our problem thus far has been that our price range ($200-300k) is SCARY close to the cash investor range. We’ve actually put a few offers on houses, only to have them GONE within a week of being on the market! The last one we put an offer on, got 12 offers within 5 days and ended up going for $40k more than the asking price!!!
The problems: we CAN’T usually go more than asking price. If the house doesn’t appraise for as much as you offer, you are supposed to pay the difference in cash. That’s not even including a down payment! So if we offer $15k above an asking price, we are looking at shelling out $15k, plus our downpayment– something we cannot do.
Add that to the fact that housing prices have risen 5% since Anthony was born (no joke), and 15.5% since last year (AGH!), and we decided to step up the timeline on “The Plan”, before the market here locks us out.
Back to my story– we toured two homes, the only two that we might have a chance at. You see, it’s hard to have a chance on a Short Sale or an REO, because the bank makes the final decision, not the seller. And a bank will ALWAYS go with who has the most cash, not who was first, who wants it most, who is offering the most, etc. That’s the frustrating truth.
One of the houses we toured had only been on the market for 3 days and is pretty much our PERFECT ideal. 4 bedrooms, fixer upper in all the right ways (to our un-trained eyes, anyways), on a HUGE 1/2 acre lot, 5 minutes from school, and on a big hill with an incredible view! It even has a few details that I love– knotty wood beam ceilings (no icky popcorn ceilings!) and a rock fire pit on the back patio!
So, Friday morning, we put in an offer. Since our realtor believes that the house is very under-priced, we offered $11k more than asking, so that the extra could be used towards our downpayment, freeing up our funds for repairs.
As of Tuesday, they accepted our offer! It was a little scary, down to the wire, because at the last minute a cash investor came forward who was willing to pay for the entire thing with CASH and wanted to keep the tenants! I told you this market was scary!
And then, we got some more scary news yesterday. Since the house was, at one point, part of a lawsuit, it’s a “Sheriff’s Sale”, meaning that the party who lost the house has a 6 month redemption period. According to CA law, the seller cannot acquire the deed until that 6 month redemption period is over. And no title company will insure the title until that 6 months is up.
The problem was that we had no idea when the 6 months had begun. Did this mean our escrow couldn’t even BEGIN until 6 months had passed?
As of this morning, it looks like we can acquire the deed at the end of November, which would probably put our closing date sometime in December. A little later than we wanted, but hey, if we can make it work, we will!
We really believe that this house is a good deal, seeing as all the houses around it are going for $100k more, just because they have landscaping and curb appeal. If the market keeps appreciating as well, it should be a great investment!
We have our friend who is a contractor coming out to the property tomorrow morning to see if there are any “deal-breaker” repairs that he can see, and also to give us a rough quote for the kinds of repairs we want (kitchen remodel, new floors, portico off the front door for curb appeal, etc.). Everything depends on how much money we’re going to have to shell out in order to repair it. The current tenants LOVE living there and didn’t want to leave, so that says good things about the house!
So, for now, we are calling this our “Maybe” House. So many things between now and December could happen, many more than usual sale-escrow transactions to deal with, so we are taking this one day at a time!
But that doesn’t mean we aren’t at least grateful our initial offer got accepted 🙂
*Interesting Side Note #1: The street this house is on is the SAME STREET where Jesse was born, 29 years ago!
**Interesting Side Note #2: The realtor representing this house is the SAME realtor who has represented multiple friends of ours, including the Bartels! She knows our families, and really wants things to work in our favor!
***Interesting Side Note #3: The husband of the realtor representing the house also manages a few rental properties. I toured one of them in November of last year. He and I chatted for a bit, and he said to me, “Why on earth are you guys looking to rent instead of buy? Don’t make someone like me rich! Go buy a house! Now’s the time!” Partly due to this conversation, we started trying to buy a house!