House Hunting Diaries Part 2

Whew that was a cliffhanger I left you at. So here’s the deal. We put an offer on the house in Berkeley. Someone else put an offer $15,000 higher than ours and they weren’t asking for closing costs. That freed us up to put an offer on the Oakland house.

Because the owner wanted the deal done quickly, they gave us an inspection report that showed a little over $10,000 worth of repairs. That scared us, but we put in an offer at what our real estate agent recommended and asked for closing costs. The owner came back with a counteroffer that was $5,000 higher and no closing costs. As we thought about the work we would need to put into the house and having no closing costs, we decided to hold firm and were prepared to let go of the house.

And then we got a counter counter offer from the seller that offered $5000 towards closing. And we talked to our real estate agent and went through the inspection report and realized we didn’t have to get everything done immediately. Given that we would get a monster refund check in 2010, we could space out the repairs and renovations over the next year. After watching a zillion episodes of House Hunters and Property Virgins, I knew that an additional $5000 in the asking price would result in something like $10 more a month in monthly payments. Which I why I want the cash up front!

So we said yes to the new counteroffer and got our inspection done to make sure that the repairs really were going to cost what we expected. They turned out fine. In fact, we’re probably going to do less renovating in the kitchen than we thought. So we talked to our loan consultant and talked to another loan consultant who will be getting us a better rate and we’re underway. The house is being appraised right now and I consider this a win-win situation. Either the house appraises and we move forward with the sale or the house doesn’t appraise and the seller has to drop the price. Otherwise, by the end of June we’ll be part of the landed gentry.

For you homeowners out there (I’m looking at you Scott and Jason), what does owning a home REALLY cost? Being renters, J and I don’t have to pay for water and we’d need to get homeowners insurance. And then there’s the getting a repairperson out when things go wrong. Has the tax break made up for the increased fixed costs?

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5 Responses to House Hunting Diaries Part 2

  1. dancerindc says:

    Phew – many questions! Sounds like your deal sounds pretty decent, though.

    First of all, make sure your loan consultant rolls up for you what your TOTAL monthly payment will be. It should include the mortgage, homeowners’ insurance, taxes, and PMI (private mortgage insurance) if applicable.

    Beyond that try to get an estimate on what monthly utilities will be. The seller might be willing to tell you (through your agents), and if not try the utility companies. Then overestimate that slightly.

    Also plan ahead for all the upfront things you’ll need to spend $$$ on during the first few months – moving costs, any new towels/linens/curtains, cleaning supplies, etc.

    The tax refund does indeed help, but we have found that we’re mostly setting it aside for the next emergency that comes up.

    Oh, and as the saying goes – assume any repairs will cost more than you think, and take 50% longer.

  2. Scott says:

    I think Jason covered most everything. Outfitting the house is going to cost more than you think. But space our your purchases and take your time.

    Moving costs…get movers…it will make the transition to much more enjoyable. You will be able to enjoy your home sooner. Take time off to unpack and start to settle.

    Crack open a bottle of champagne and celebrate.

  3. Bay Area Food Blog says:

    Thanks for the advice guys. Our loan consultant definitely included taxes, PMI etc into the monthly payment. And we will definitely get movers. It’s been a long time since either of us moved without movers.

  4. Stef says:

    Woohooo! And great questions and answers.

    I’m still possibly thinking of a mid-late summer trip out to San Fran. Can’t wait to see the new place! 🙂

  5. EB says:

    SO exciting!! Congrats!

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