Closed Today!

This is long, so buckle up for the ride!

This was my second home but it is my husbands’ first home.

The first one I bought right before the crash of 08 and was underwater until I sold it in 2018 with 1k in my pocket for my trouble after putting 20K in it (it was a bad flip) just to get it to sell.

After that, I rented for a couple of years as I was relocating from Philly to NC and had to spend the time to save up a down payment. To make a long story short the 08 crash left some serious trauma in me, not to mention a lost 10 years where I could have had equity-gone. I grew up only in rentals my whole life and I am the first woman in my family to have ever bought a house on my own. I had no real advice or wisdom that might have made me choose differently. I only saw it as checking off the thing you do to get into the middle class. Boy that was a real tough lesson and my trauma definitely was a factor this time, too.

I started looking in Jan. of 2020 with my husband. From Jan. to March most of it was just getting a sense of the area and what we would be able to afford. Our first realtor was a bust, she was very inexperienced and worked for her mom whom we thought we were hiring but she gave us her daughter instead. In March when things started turning south we used that as a reason to get out of this contract. We also thought that perhaps we would get a better deal and prices would ease up.

How wrong we were as it all just got even crazier.

We got a second realtor for two months via a recommendation. She did not know our area and we lost out on bidding on great homes because both she and we were location ignorant. We parted ways.

In early summer we got our 3rd realtor who was great. Very knowledgeable, well connected to the area, and also had a good sense of what we were looking for. Part of our bad timing was that we were looking for a more rural property at the same time everyone else was, apparently.

It took us a long time to find good properties because we were very particular. I have a neurological condition that makes for excessive noise and artificial lights hard to handle so we were looking for dark and quiet places. I absolutely cannot tolerate LEDs which is everything now. It is a burden. No streetlights, no bright neighbors, it was an odd (and hard to find) requirement to be met.

We were looking for 1400 sq. ft max with as much land as we could afford – the opposite of most new developments these days. We also wanted the capability to go off grid in the future so well and septic were also part of the search. All within 40 minutes of Durham, NC.

In NC there is a due diligence fee which is absolutely ridiculous and as far as I am concerned extortion. Maybe in the past it was reasonable, maybe $500 to take a home off the market. But now you have to offer 4-6k in due diligence in our area to even be looked at. Knowing that I could lose that if I walk and I give it before inspection and appraisal meant we stopped looking for about a month as I just did not feel at all ok with this, every fiber of my being telling me this is a horrible risk. Here my trauma was losing its mind and I had to really work through this psychological hurdle.

On top of that, in Durham where we were looking any nice-ish house was going for 20-50k over asking. So in these bidding wars we had to lower our budget to asking prices that we could offer a strong bid for rather than a house high priced that we have some negotiating power. All of this, felt so deeply risky to me and I was having literal panic attacks over this. But I also feared getting priced out of the market and also inflation on my little nest egg that I had worked so very hard to save up over the years. Despite all of this, we decided to take this insane risk.

We bid on 3 houses altogether (after looking at easily 50-60). The first two we were outbid and since we were not willing to waive appraisal contingency we lost one of them. The final house, the one we closed on today, we saw on a Friday, submitted an offer Friday night. The offer was 220k, we bid 233.5K with 5.5k due diligence and 4.5 earnest fee- my realtor also said that they had to accept the offer by noon the next day or it was off the table. The seller agent asked if we would be able to cover any price post appraisal. We said we could over but we did not say by how much. I think that was a subtle negotiation that landed us the offer acceptance and we would not have been able to navigate without our realtor.

I knew the house would not appraise at 233.5, but I thought it would appraise about 225-227K and I was willing to cover up to 7K in the difference. It was a gamble.

After that came the flurry of inspections, septic, land survey, the works. We had to fine comb the whole house because we knew that the only negotiating power we had would be in potential repair credits if it had to come to that. I was a mess, I should have been on a IV line of Xanax because if something was really bad – what motivation did the seller have to work with me when they already had 5.5K of my money regardless of what happened? Luckily for us, inspections and what not all passed within reason and the place was in good shape except for some nit picky details.

Next the appraisal which was ordered over Thanksgiving and the appraisal came in one day before due diligence was up. I was a wreck. It came in at 220K at offer price ( I am not going to get into the full throated howling that happened, nor the tears or gnashing of teeth or shaking my fist at the Fates). But this was going to be a real problem – to cover that 13.5 in cash over. I could do it, but it would have been at the edge of what we were comfortable with. I did not want to touch my emergency fund if I had to.

Here is where having a good realtor really gives buyers an edge. She talked to the selling agent about how relisting it would be an issue- they would also have to gamble that another appraisal would go higher. She was also able to (somehow I don’t exactly know) able to secure 4.5K in repair credits, plus the sellers came down 1.5 k. Finally, she (and we did not even ask her to nor even considered it) offered 2K of her own commission in order to land the price at 227K.

I was legit crying on the phone, I was so blown away by her generosity and kindness. She didn’t have to do that.

We locked in a loan at 2.8%. I was able to and over 7K cash as well as 13% down. Our mortgage even with PMI is an astonishing $975 a month, about $300 less than our rent right now. The house is a 3/2 1430 sqft. On 1.3 acres – it is quiet and dark. It checks many of those boxes but we had to move 30 minutes away from Durham to get this. We live in the Chapel Hill area now but would not have been able to afford as much land/house as we got further west. That was a major concession. We are confident, however, that the up and coming area we moved to will work in our favor. Also, people in this area didn’t have the kind of cash on hand we had which made us much more competitive than in Durham where it seems every other cash buyer is from the west coast.

So we closed today, and my God, I never want to go through this ever again. I feel like I need a therapist to process everything.

Here are some words of advice for people looking or who might be new to all of this like we were:

1. Get a good realtor who knows your area, fire them if you feel like they are not understanding you or working with you. Don’t feel bad about this, you need the right fit, you also need someone who is a good negotiator.

2. I needed a lot of cash in order to have made this happen. I feel bad for first time home owners who don’t have generational wealth transfer, its hard, I see you. If you have to spend another year scrimping to make it then do that rather than trying to buy now at the very tip top of what you can do. This time I had the money. I didn’t stress about inspections, surveying, whatever. All of that made me feel more in control of this crazy process. I did not take out from my 401(k) to do this, I just was super frugal for a while.

3. I never got that “mystical feeling this is the dream home, omg!” feeling. I got a quiet – ok, I’m scared but this checks the boxes and makes sense on paper. But now that I am through it, I am getting excited for my new home. Don’t be so excited about a house that you throw logic out the window to have it. You can make a mostly home a dream home.

4. What you think you want, and what you end up liking could look very different, be willing to be open minded and know that the house process is as much about changing you as a potential homeowner as it is understanding the market.

5. Watching my husbands' joy as he got the keys to his first home made all of this worth it. I

There is even more than this, but tis is long enough. Thank you for coming to my Ted Talk!

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source https://www.reddit.com/r/RealEstate/comments/kmsqs8/closed_today/