Sunday, April 20, 2008

The House-Hunting Report

Here's what I wrote on one of my message boards tonight:

We exhausted ourselves looking at houses today. It was completely, utterly tiring. Honestly, I would be willing to put an offer on any of them (they all have good points and bad points), but none of them make both G. and me smile except for one:

MLS# 70 55 9 738 (take out the spaces)

Both G and I walked into this one and just felt really comfortable there. We like the layout, and it just FEELS good. I wanted to sit down and stick around. G. literally left *beaming.* She smiled ear to ear all evening thinking about it. The problem is that it is somewhat of a rehab project.
  • It will need a new roof.
  • All the shutters need replaced.

  • Some of the windows still need replaced.

  • The lead and asbestos need to be removed.

  • It may need a small amount of electrical work (though it does have a brand new electrical panel).

  • The kitchen will need some major work, and as a part of that project, we'd probably end up converting a "bonus" room right next to the kitchen into a bathroom and laundry room combo.

  • The basement is very wet. It has an ancient drainage system that would need to be replaced and it needs a sump pump or two.
  • There is an old oil furnace (luckily sans asbestos). It would be in our best financial interest to update the heating system, converting it to a multi-zone gas-powered system (fortunately the house is gas metered).

  • The (small) yard needs work and needs to be fenced.

Eventually the driveway will need to be repaved. It also needs a lot of cosmetic updating.

Much further down the line...we'd knock out that front entryway (it is unuseable right now...very, very, very musty...though rest assured that the rest of the house doesn't have that smell), and we would hopefully put in a porch or a deck.

I'm unsure about taking on a house like that right now. And I worry about the wet basement, in terms of longterm structural issues. I also think a rehab loan might knock us out of the running because right now I've heard they require 30% down and are more expensive loans.

Actually, there are some other downsides to the house as well, which would impact re-sale value. It is on a very busy street and right behind the house (next door, basically, as it is a corner lot), are several business (rather than more residences).

BUT we LOVE the house. It is a comfortable size and very likeable in soooooo many ways. And the location is very good (besides the busy street, which we actually appreciate because our kids like watching cars go by). And it is much cheaper than many of the other properties we've looked at.

I'm gonna talk to one of our mortgage people tomorrow and see if this is at all possible financially. The house has been on the market for a year. Most houses that have been on the market when it hit bottom have now sold. Not this one. The seller is motivated (although we have to consider that when they first listed, the house was listed at $240,000). I am really tempted to put in an offer of $180,000 or $185,000 (or less if the price of the work adds up enough to justify doing so) and just see what they do.

That makes dw nervous because she loves the house and wants to start offering at $190,000. I'm not ready for that yet. There is so much work.

Our agent is gonna give us the contact information for a contractor who will give us estimates for all the work. This will give us an idea of what is a fair offer and whether we can afford this either as a rehab loan or by reducing our downpayment to help cover the costs out of pocket.

We also have one other property that just came back on the market that we've asked our agent to see. We'll see what we decide to do. Stay tuned.


sf said...

Have you ever seen the movie The Money Pit?
Or Mr. Blandings Builds His Dream House?
This has me worried. I think if it was just one thing or two but it's like onr thing after another.
And you realize there would be a lag time for moving in right?
Because when asbestos and lead are involved it has to be totally fixed before you can move in. And a wet basement is worrisome om several levels. . .

megin said...

Finding a home is such a challenge! I wish you luck in this decision. Also wanted to mention that in this state (we share a state, I discovered on MDC), you can get a 0% loan from the state for lead abatement. It only needs to be repaid upon sale of the house, at which time the fact that you did the lead abatement usually gets you that money back plus more. I'm not certain of the source as our landlords used it to delead for us, but if you'd like it, let me know.

Good luck!

Masasa said...

Thanks for the info Megin! That is very useful to know, no matter what we decide about this particular house.

Mom, yep, two things will be critical at this stage:
1. Getting the contractor in to do the estimates of the needed work, so we have some idea at the minimum we are looking at.

2. Getting the inspection done by a really good inspector, if we put an offer down, and ensuring that our purchase and sale agreement leaves us plenty of room to backup if the inspection brings up any concerns.

And the only way we could do this would be to buy with the money in hand (either by rehab loan or a chunk we would otherwise use for the downpayment, since this house is cheaper). We'd want to have all the major work done immediately, before we'd move in. There is no way in heck I am going to take on a rehab project that has any sign of being endless. This is either going to be a quick deal, or no deal.