Since the beginning of the year I’ve been looking to buy a house. The one in NOLA sold near the end of 2007, and that marked the moment when I seriously considered home ownership again. My slate was clean, and I now had the finances to put a significant down payment on a new place. My debt is nil, and my credit is awesome (and nobody was more surprised than I was about that).
Started the search January 7th. Looking specifically for a single story house, around 1300 sq ft, a two car garage (one side to park in, one side to have as a workshop), three bedrooms and two bathrooms, a reasonable yard, a spacious kitchen, and located in South Austin.
To keep within my calculated comfortable budget, my sacrifices would fall along the lines of proximity (looking further south, and consequently further away from downtown) and attractiveness (finding a place with good bones and lots of potential that had a certain amount of “ick factor” that I could spend my own time renovating bit by bit). I have a few deal breakers: foundation issues, obviously crappy neighborhoods, low flood elevation, natural drainage issues like a driveway that slopes down toward the house or a yard graded toward the house rather than away from it, location immediately on a busy road, and direct close proximity to train tracks.
In early February I went under contract for a house that had a phenomenal multi-level yard, and was located on a third of an acre. The house itself was dated, had obvious potential, but was a two story home and had some immediately apparent problems that didn’t seem unsurmountable. We haggled the price down about $8k — it was at the high end of my comfort zone for price, but certainly worth it considering it’s location. The lot more than made up for the shortcomings of the house. That is, until the inspection.
Settling had caused some flexing of the foundation. No breaks, but there was dramatic difference in elevation from the center of the house, to the corners. The bulk of the house had vinyl siding on it, and that was becoming another death knell right there as there was a 90% chance that the siding was concealing a deteriorated original exterior, and would invite future expenses to have the whole thing stripped off and redone with proper fascia material (and another deal breaker was added to my list). The heating and AC systems were “antiquated”, and the ductwork was riddled with holes and in need of immediate replacement. There was a mystery leak from the roof that had rotted the interior of an outside wall in the utility area of the garage. There was a buckle under the floor of the second story that ran front to back that was a side effect of the flexing foundation. And many, many more problems… too many to list.
I walked away from that house reluctantly, but happy that I didn’t buy into a lemon. That foundation problem alone would have been an inherited albatross around my neck, and would have dramatically devalued the house when I went to resell it. But damn, that yard was awesome.
Continued the search, and found another place I liked. Started the haggle over the price until the owner put his foot down and wouldn’t go any lower… a meager $3k less than his listing. The house was about $7k more expensive than the other most expensive house in the neighborhood, and about $10K more than the average neighborhood prices (and as a rule of thumb, you never, ever want the most expensive house in the neighborhood). Fine. If you can get that price from another buyer, go for it, but you’re not getting it from me.
About that time the interest rates for mortgages took a jump due to the high rate of foreclosures and underwriter skittishness as a result. They were in the mid to upper 5% range when I started looking, suddenly they were in the high 6%. Anything under 7% is a deal, but I’ll be damned if I don’t take advantage of this downturn in the market to get a killer APR. I put on the brakes to see where they were going.
Meantime, home prices are dropping a bit. The advantages have been falling to the benefit of buyers with the big home sales slump, and all the foreclosures — and apparently sellers are getting the message. Home prices have been over inflated (and climbing) for the last decade, and now they’re starting to head back down to normal mortal levels. Good for buyers who plan to stay in a house for a while.
Resumed the hunt when the interest rates came back below 6% (and they’ve been hovering there for a while). In the last two weeks I’ve had two houses sniped out from under me before I could even put an offer on them (one of them went under contract an hour before we set foot in it). Both were on the market less than 3 days, in decent neighborhoods, and reasonably priced from the start. This was a sign that buyers were paying attention now, and that I couldn’t waste time when putting an offer in on a house that I liked. It also meant I was getting better at targeting houses that suited my tastes, and were attractive to others as well.
Saturday I looked at four houses. The last one was a winner. Got a great vibe off of it, the layout was nice, it was a reasonable size and seemed to be in really good shape. And Jeebus, the kitchen is huge. It was on the market for two days. Left there and went right back to my place where my Realtor an I banged out an offer. Ours was the first they received. A few hours later I got the word that they accepted it. Wow, that was fast.
So, the main inspection happens this Friday, the 4th. The plumbing inspection is next Monday, the 7th. We have till midnight on the 8th to get out of this contract scot free for any reason whatsoever. If all goes well, I close on April 30th. But, should the general inspections turn up anything nasty and expensive, I’m outta there.
Stay tuned for updates, kids.