Q&A: Epiphany in Baltimore
Some of you read blogger Epiphany in Baltimore and have followed his efforts to buy a home. (Thanks to the Wonk reader -- whose name now escapes me -- for pointing me that way. Let me know who you are and I'll credit you properly.) I thought it would be interesting to chat with him about his experience, since every buying story can help other would-be buyers … and often would-be sellers, too.
Throughout the interview below, I've included links to his blog for all who would like to see how each step unfolded in real time. And that's why I'm identifying him by his online name: He's a teacher whose personal blog links to a blog about his job, and he therefore prefers to stay anonymous.
Q. When did you close?
I just closed on Thursday! I've been living in the house for a couple of weeks, though, with a pre-settlement agreement.
Q. What did you end up buying -- the Baltimore rowhome rehabbed by St. Ambrose that you were serious about?
Yes, I ended up going with the St. Ambrose rehabbed rowhome in Belair-Edison. It's three-bedroom, with a balcony, finished basement, and a nice yard with a private fence.
Q. How much did you pay?
Q. Which "first-time buyer" grants and/or mortgage programs did you use? How easy or hard was it to line everything up? Do you have any advice for others?
My mortgage is through Healthy Neighborhoods, with a 3.75 percent interest rate. I definitely recommend checking out Healthy blocks in Baltimore and considering going through HNI to get that great interest rate. St. Ambrose was extra-helpful in helping me figure things out, as was my real estate agent, Bob Burkhard (who I met at the Live Baltimore office, which was my first stop).
I did Home Ownership Counseling with St. Ambrose and then with Belair-Edison [Neighborhoods Inc.]. I used the Baltimore City Employee grant for $3,000 as part of my closing costs.
Q. You mentioned on your blog in December that you were renting and weren't motivated to buy a house. What changed your mind?
I had some credit card debt I wanted to eliminate before I started house shopping. I really needed a new car, too, and didn't think my car would last long enough to shop for a house. Basically, I just wanted to get my finances in as perfect shape as possible before I went through the process. My credit score is around 675, and [I] wanted to get it up over 700.
Then, my landlord/roommate told me ... that she wanted to change her living situation and wanted me to look for another place to move into by April. I never wanted to rent again, so this is what motivated me to just see if I could do the house thing; I didn't really have savings, but I had just got my tax return back so I had a small amount to go from. So, basically, I decided to buy a house because I needed a place to live and realized that my financial situation didn't need to be absolutely perfect to do so. Hearing about Barack Obama's stimulus plans were another minor factor.
Q. How many homes did you end up looking at? What did you think of the options in your price range? And how did you decide whether asking prices were fair or not?
I looked at probably 20 to 25 homes; it was at a breakneck pace. I'm a teacher and a baseball coach, and my season (and 12- to 14-hour workdays) starts on March 1, so I basically tried to get everything figured out in the span of two to three weeks. I had a few ideas about neighborhoods I wanted to live in -- Belair-Edison (where I was currently living), Waverly (very near my job and a great neighborhood), Lauraville, and Ednor Gardens-Lakeside.
I did a lot of research online and joined a few online groups for each community. And, in the end, it ended up being mostly about price; the houses in Belair-Edison were just nicer in my price range than the ones in Ednor Gardens (my second choice). I saw really cool houses in the latter neighborhood, and one I just loved in Waverly as well, but they needed a lot of work and were $15-25K more. ... Plus, I got such good vibes from St. Ambrose; both their mission and their houses were so nice.
As for prices, I got a handle of things by looking at a whole lot of houses, looking at websites (Google addresses and it pops up real estate sites), and, most importantly, by listening to my real estate agent, who ran analyses whenever I was really interested in a house and guided me in the process.
Q. Did anything surprise you about homebuying, either positively or negatively? (Or both?)
I found the process really exciting and fun. The only negative was how long everything took after I picked out a house. Part of it was that I was so pressed for time, and so excited, so it probably made everything seem longer than it was. But, for example, the Baltimore City grant took a really long time -- twice as long, at least, as it says on the application -- so leave yourself plenty of time.
Q. Bottom line: Happy you bought now?
Absolutely. Now that I've closed, I'm going to amend my taxes and get the $8,000 first-time buyers tax credit.
Categories: Housing market experiences, Q&A
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Comments
Ah, you paid way, way too much. What is it about St. Ambrose and their ridiculous pricing? A home in Belair-Ed should top off at $100K unless it's on Parkside. $126K is too high for mid-block, and your value won't hold. But, as a teacher and first-time buyer, I'm sure you got loan products that distracted you from the price.
Posted by: Belair-Ed Neighbor | May 4, 2009 9:51 AM
The house is an end house, not mid-block.
Top out at $100K? There were no houses in that price range in any of Bel-Air/Edison. It was comparable or less than any of the houses on the market in the area, for similar size and area.
The house is beautiful. St. Ambrose has really high-quality rehabs. I'm very happy.
Posted by: epiphanyinbaltimore | May 4, 2009 11:01 PM
Congrats on your purchase. Sound like you got a great house at a good price. And great financing.
Enjoy home ownership.
Posted by: bdc | May 5, 2009 9:54 AM
If you run the comps, you will see that my assessment may be accurate. On Ramona, my neighbor across the street bought a beautifully renovated home from St. Ambrose for $164,000, in 2008. Ask her today if she over-paid.
I know St. Ambrose and others would like to see if values go up, but the reality is that we're not there yet. Many real estate agents tell their clients to avoid the area not because of the prospect of crime, but because the values are still not holding solid.
Posted by: Belair-Edison Neighbor | May 5, 2009 1:13 PM
A comp analysis for the last three years was completed, and I still don't see any evidence that nothing in Bel-Air/Edison is worth $100K. There's quite a big leap between $126K (my price) and $164K (the house you are citing). I would never have paid that much for a house in the area, no, but $126K seemed like a more than fair price.
As for St. Ambrose, they are a wonderful organization, and they are bound by HUD (where they get their homes) rules to only charge a certain percentage of their rehab price for their houses. I requested several add-ons to the rehab that cost $3400, but HUD rules stated they could only charge me $1000 for them, because charging more would give them a profit on the rehab and sale, which isn't allowed. They charge based on what they put into the house.
Do you have any comparables of houses in the area that sold for less than $100,000? Not all of Bel-Air/Edison, but the nice parts. There were none that were even close to that in the 25-30 houses I looked at in the area.
Posted by: epiphanyinbaltimore | May 5, 2009 3:18 PM
Well, that is the challenge: what are the "nice" areas of Belair-Edison? I would wager each block has its mix of bad and good.
The other Q is gauging how much to put into a house. St. Ambrose is nothing short of spectacular in their renovations, but my concern centers on whether these renovations can pay in a neighborhood still under volatile pricing. It's a concern you and I will share as neighbors!
Posted by: Belair-Edison Neighbor | May 6, 2009 9:25 PM