Lessons Learned from First Offer

The first house I looked at was huge - 1800 square feet. The living room/dining room and stairs were nice hardwood floors. It had an addition over the garage that had 3 rooms and would be perfect for a library (I absolutely LOVE to read and have a ton of books). The yard was private. I really did not want to live in town, but it was private and the house was awesome. The house was mostly empty, but the owner's son was living in one of the rooms. He was very disgusting and dirty. He was using the back room for trash bags (it was literally full of them) as well as one room in the basement was so full of trash that you couldn't go in it.

I was foolish and put a bid in a few days later. Then I had my brother come look at it (he knows a lot about fixing up houses) and he found some foundation problems. He said they looked kinda big to him, but he's no expect in that area so maybe they were alright. I had the inspection and yeah, some of them were major. But the kicker came when we went into the basement. One of the stipulations for the inspection was that the owner had to have that room in the basement cleaned out of trash (though he didn't get rid of it - he just put it in a trailer on the driveway!). We took a look in that room and it was horrible. Not only was the room never finished (it was only 1/2 dug out of the dirt) but the wall had fallen back and didn't look safe at all! There was even a little stream that flowed down the dirt. The inspector said to me "Let's talk off the record for a minute - you don't want this house!" His estimate was that the cost for fixing the foundation was probably more than the cost of the house.

I was pretty dissapointed in myself. Why didn't I insist on seeing that room before I put in a bid? I think I was too set on getting a house that I didn't worry about the "little" details. Thank goodness I did not get the house! Thankfully it didn't cost me too much - the inspector gave me a reduction on the inspection so I was only out $300 plus my time.

My realtor was working on getting all the paperwork done to get my released from the contract and she told me that the other realtor called and said that the seller had his own contractor come through and said it would only cost $6,000 to fix that and so he'd just deduct that from the asking price. My realtor said she called our inspector back and told him about that, and told him the name, and he said that was just a fly-by-night guy who was probably paid $100 just to say that. That shows the character of the people I almost bought the house from.

In retrospect, when I saw all the trash (not trash from like cleaning out a basement, but kitchen trash that rots) and all the minor problems I did see, I should have said no thank you and left. Personally, I don't think the house will ever sell. It had a lot of potential, but the owner (and specifically his disgusting son) have never taken care of it, and so small, easy to fix minor problems became big problems and some of them turned into major expensive problems. Most likely the house would have to have the entire foundation redone, which would probably cost more than the house is worth.

Ironically, the part of the house I would have made my library was probably the 2nd major unsafe place of the house. The inspector said that he wouldn't have been surprised if it collapsed with the weight of all my books - there were next to nothing for support beams in that spot.

Preparing to Buy a House

I am preparing to buy my first home, and I am very excited. I have sold most of my stocks. I was sorry to have sold BGF and BGS, which were one of my best investments. But I did make plenty on them - my average cost was $9.42 (BGF) and $3.70 (BGS) and I sold them at $14.43 and $7.96. Not a bad return at all. My average price for AOD was $6.83 and I sold it for $7.88. The return for these stocks is even greater when you consider the dividends I recieved.

The only stocks I kept were HTE (I do think gas is going to go higher in the future) and ACAS (I think this will certainly go much higher, plus I have 2 options out on this for August).

The first place I tried for a mortgage was ING Direct. I was able to get qualified for a ING Saver Mortgage at a 4.25% APR, which was awesome. But there were two problems - you had to do atleast 25% down and it's ony for 5 years - after 5 years you'd have lock it in at the current rate. I think I could come up with 25% down, but that would involve completely cashing out my 401k and spending every cent I had saved, which doesn't leave me with anything left over for an emergency - I'd basically be living paycheck to paycheck, which doesn't appeal to me at all. The 5-year thing is also a little unnerving. I do plan on paying extra on this, but I don't think I could do it in 5 years. At the end of the 5 year period, you may not qualify for it again if your credit changes (or if you lost your job), so you'd have to come up with the remainding balance! Also, I think that interest rates now are probably about as low as you're going to see them for a long time - so 5 years from now who knows what we'd be looking at.

I filled out an application online at Bank of America and was pre-qualified. I got a call from them, but they wanted $400 upfront to actually apply. I told them I'd call them back.

I tried going through my local credit union, but I was pretty dissapointed. Last year I went in to see what I would qualify for and they were very nice and helpful, and we determined I had better wait a little bit. This year I tried to do that again but all I got was "we just do all that online now" and they referred me to their website. I filled out the form and they said someone would be contact with me. About two weeks later I finally got a call from someone asking if I was still interested, told them that I had already found someone else.

I am going to go through another local bank for the mortgage. I just called and asked to come in, and was told I could come in right away - they'd even come to my local branch for me, or I could meet them at the main office 10 min away - that's service right there! I am so glad that I did, too. I was told about a program NY state does - SONYMA. They will pay my closing costs up to $3,000, my interest rate will be 5.75% (or 5.25% if I did not want the closing cost assistance) and I only need a 3% downpayment (though I would probably do more).