In my last post, I talked about the reasons we decided to buy a home. Because the housing market was crazy back in 2004, we ended up placing bids on 3 homes before we got one accepted. It was interesting to see the variety of homes that were on the market in our price range – almost all of them had something wrong with them, either in terms of location or condition of the home (my favorite was the home with the Confederate flag-flying neighbors; they made a point to come into the backyard with their raging pit bull when we we there. The dog was trying to rip apart the fence to get to us while we were looking at the yard. I wonder if that house ever sold…).
I honestly think that we were very lucky to get our home. When we bid on it the first time, we were immediately rejected because the sellers did not want to help with the closing costs. About a month later, their realtor called and asked us to consider placing another bid. Apparently, no one else had bid on the house, and the sellers were getting nervous because they needed the sale so that they could purchase their new home. It was a nice situation to be in. We placed the same bid as before (basically giving them their asking price but making them cover the closing costs), and all was well.
There were a couple of things that really amazed me about the sellers. First, they did nothing to clean the house. We couldn’t open closets until the final walk-through, and could barely walk into some of the rooms when looking at the home. I think that if the sellers had rented a storage unit and put their junk in it for a month, they would have had multiple bidders.
Second, the owners did nothing to repair some of the minor defects that probably turned off a lot of buyers. The home really didn’t have any major problems – in fact, there were features of the home that really made it attractive. It had forced heat and central air, a new roof, and was in an excellent location. The downsides were all easily repaired – the landscaping and yard were a disaster, it needed new interior paint, and the hardwood floors needed to be refinished or replaced.
We bought our home for $139,900 (100% financing) with a 30-year mortgage at 6.375%. After a year, we knew that we would be staying for awhile. The homes in the area had appreciated significantly, so we refinanced. The loan was for the same amount and interest rate, but we were able to get rid of the PMI, which was costing us $150/month. According to Zillow, our home is currently worth $180,000 – I am not sure that it would actually sell for that much. I think that $170,000 is more reasonable, given the current market conditions and the size of our house (we have the smallest house in a nice neighborhood).
On a side note, when using our home in our net worth calculations, I currently have it valued at $158,000 – this estimate is based on what we would make on the house after closing costs. We currently owe $135,788 on our mortgage, and our current monthly payments are $1201.
In general, buying a home for the first time is a lot of work. It took us awhile to find an honest mortgage broker, and I still regret not being around for the home inspection (a story for another post, perhaps?). We also didn’t realize that we had more rights as buyers – for example, the sellers took the closet shelving that was attached to the closet, the outlet plate covers, and the mulch from the front yard (yes, it’s true – the mulch!). We didn’t realize that we could negotiate over these things at the final closing. In the end, I don’t think that we would have brought these things to the table – if they really wanted the mulch that bad, they could have it.
What was your home-buying experience like? Are you glad you did it? We are so happy that we took the plunge, and that we did it when we did. If we tried to buy a house now, we would definitely need a down payment, and a lot of homes that were available to us back then would be out of our price range now.
My sister had the raging pitbull problem, too (only it was a Rottie). She fed the dog a few hard boiled eggs, knowing the owners brought it in at night, as revenge. If you think dog flatuence is bad, add that sulfer smell…
Tip Diva’s last blog post..Top Ten Tips – Shopping Effectively
hmmm… hard-boiled eggs; I’ll have to keep that one in mind! Thanks for visiting
I sold my first house last summer after getting married (we’re living in the house that my husband owned before we got married). We checked out a few open houses before we put mine on the market and noticed the lack of cleanliness. Almost everyone who went through my house remarked on the cleanliness and I think it went a long way in getting the house sold in 2 months in current housing conditions.
BTW, you ask really good questions at the end of your posts – I like them
Becky@FamilyandFinances’s last blog post..Favorite Blog Post 2/15/08
Becky,
We only saw one house the whole time that we were looking that I would consider clean, and I don’t have very high standards. It amazes me that when people are looking to sell something so expensive they don’t take the time to clean it! I’ll definitely invest the time and effort to clean this house if we ever decide to sell.
Thanks for the compliment, and I appreciate the comments!