Dispatches from the home-buying front: Part II
Today he shares Part II of his tale, which picks up after they'd made several offers -- most on foreclosures -- to no avail.
Four offers written. Four offers denied. There were almost 80 houses in our file of previously viewed homes. We had started in late August and it was now early October.
We went out once more. Out of five we saw that October Saturday, we liked one townhouse. Another odd neighborhood: The street names were Starboard, Portside, Sternwheeler and Sloop. Who comes up with these things?
It needed some work, but the location was perfect, and it had a big deck and a big back yard. There was real hardwood flooring throughout the main level.
Offer in. The agent called: The bank wanted our highest and best, and wasn't taking any more offers. We held fast at $31,100 over the listing price.
Shortly after that, our agent called us: Success! The bank, Wells Fargo, had accepted the offer, but wanted to push our closing date back from Nov. 18 to Dec. 11. We would miss the tax credit, but at this point, who cares? We got a house!
We signed the counteroffer, scheduled our inspection and appraisal, and updated our now out-of-date loan application.
The inspector came and did a wonderful job. He spent three hours combing over the 1,600 square feet of the home, plus the deck and the outside of the building. He pointed out every minor flaw and every feature, big and small, about how the house worked.
There were some negatives: Only three of the four burners on the stove worked and the oven door was broken, so we would have to replace the range. The deck needed some repairs done and would need replacing soon. There were no deal-breakers, though.
We spent a few days searching for day care for our infant daughter. We found one and put down a deposit with an awesome in-home daycare. They would hold the spot until the end of December.
Our lender sent out the appraiser a week later. The appraisal report was devastating: In order to get the FHA-backed loan, changes had to be made. Changes that would cost about $3,000, the appraiser said.
Our agent was livid. Our lender was baffled. The appraiser had put things on the appraisal report such as "the carpet has exceeded its economic life" and "puddle of grease in the oven." No mention of the broken oven door, though. Neither the agent nor loan officer had seen anything like this before. The appraised value was well above our offered price, but the "livability" of the property was in question.
They suggested we ask the bank to make the changes, even though we had repeatedly signed that this was an "as-is" sale and that we wouldn't ask the bank to make changes. We had some leverage, though. The appraisal is binding for six months, our agent said. If we back out of the sale, and the bank tries to sell it to someone else with an FHA loan, the appraisal stands and the changes still have to be made.
While we waited for their answer, things got worse. The title agency had "performed a routine records search" and found the previous owner had filed for bankruptcy.
What? The lender couldn't have done that before? You know, like, before it listed the home for sale?
We were now in a "post-foreclosure bankruptcy" situation. The bank didn't legally own the house.
Tomorrow: The waiting game.