| You're probably wondering why my husband hasn't updated this site in months. I wish it were because we were off on a whirlwind tour of the Orient or something equally exciting, but it’s actually because we have spent the past few months buying a house. Let me be the first to tell you that if you’re thinking of embarking on your own adventure in home ownership – don't. Just don't. Trust me on this one, it's best to just piss your rent money down the drain and be able to sleep at night. It all started on April 13th, when we found out that we owed a ton of money in taxes for the third year in a row. All around us people were buying fun, shiny things they didn't really need with their refund checks, while we owed a small fortune to the IRS. Why? Because we were part of that great unwashed mass of chumps that has no deductions. Everyone who knew anything about financial planning had been telling us for years that we needed to stop wasting money on rent and buy our own place. Makes sense, really; here we were handing a whopping $1,300 a month to an office full of people we didn’t like to live in a place that, with it’s white walls and beige carpeting, was more like the inside of an asylum. $1,300 a month. That’s $15,600 a year. That’s a used Acura Integra, a Audemars Piguet watch, or what my brother-in-law spends in one night at Club SuperSex in Montreal. We went to a realty office and began discussing what were looking for in a house. This is something I highly recommend for anyone looking for an hour's worth of free entertainment, as long as you don’t actually want to buy a house. Trust me, don't take the process any further than this for your own mental health's sake. But there is nothing funnier than sitting in a room with a realtor and mortgage broker, talking about what you want in a home and how much you can afford to pay. We started by saying we wanted a townhouse or a low-rise condo with at least 1,000 square feet. We said we wanted parking close to our door and we had a dog. We wanted to live in one of two cities and we had to be close to public transportation. Minor bonuses included a washer/dryer, the ability to barbecue, and get satellite TV. Most importantly, we only had $10,000 for a down payment and could only afford $1,300/month in payments. That looks like a pretty basic, specific list, right? You’d think so, but this is an actual excerpt from our conversation with the mortgage broker: US: We can afford $1,300 a month. MORTGAGE BROKER: $1,600? US: Uh, no, we said $1,300. MB: $1,600? We tried several times, in several different ways, to explain that $1,600 is in fact more than $1,300, and we couldn't afford more than $1,300/month. Unfortunately, we were apparently speaking a foreign language without realizing it, because she stood up and trotted off to her computer to start crunching numbers at that would give us payments of $1,600/month. While she was gone, the realtor began to show us listings for 750 square foot properties in cities that were closer to Borneo than Washington DC, in high-rise condo buildings nowhere near public transportation, with prices we couldn't possibly afford. It just kept getting funnier - realty offices should consider charging admission. I was convinced we were wasting our time anyway because no company in its right mind was going to give us a mortgage. We make decent money but because we live in DC, decent money equals living hand to mouth. In just about any place else in the country our combined salaries would have us living the good life, complete with furniture pre-assembled in the factories of North Carolina, rather than in our living room using little bent Allen wrenches and Swedish directions. But here in the DC-metro area the taxes are high, the rent is higher, and the cost of dinner for two at a place that doesn't have napkin dispensers on the table could buy you a compact late-model used car. (Whenever we are feeling especially broke we huddle in the corner and repeat our mantra. "At least we don't live in New York.") In addition to our trickle of a cash flow, we've got some minor credit card debt and student loans the equivalent of a small nation's GNP. So imagine my surprise when we received pre-approval letters from not two, not three, but four different financial institutions. Little did I know that these letters are really just meant to lull you into a false sense of security and have no actual bearing on your actual ability to get financing when you actually need the money. But I'll get back to that later. On to the actual house hunting. It sounds like so much fun, visiting cute neighborhoods and strolling through houses dreaming about where you would hang your pictures and place your sofas. It didn't take more than hour for that little bubble to burst. First rule of thumb: Real estate listings lie worse than Arthur Anderson accountants, so don't trust anything you read about a place. You've heard it all before; “spacious” means 600 square feet with a big parking lot; “new appliances” means purchased new during the Truman administration; “charming neighborhood” means no need for cable because you can watch "Cops" being filmed from your living room window; “rustic” means it’s in West Virginia; and “fixer-upper” means big hole in the ground filled with waterlogged plywood. Listings in the classifieds are worse than the ones your agent gives you, so don't even bother going to an open house unless your realtor recommends it. There were more than a few places where we didn't even want to slow down the car enough to read house numbers. If you actually made it past the front door, it didn't matter what you thought of the place because if the asking price was in your range, you needed to make an offer immediately upon entering or else it was going to get snatched up by somebody else in the next eleven seconds. Because it's a hot market. Which brings us to the second rule of thumb: Logic means nothing in a hot market. We saw a townhouse that was listed for $185,000. It had no washer/dryer hook-ups, casement windows that needed to be replaced, three cabinets in the whole kitchen, no dishwasher, a tiny bathroom desperately in need of new tiles, and street parking. In three days, with no open house, they received over 30 offers and sold the property for $225,000. That, my friends, is what the phrase hot market means. It means no home inspection contingencies. (Home inspection contingencies, if you’re lucky enough to get them, mean that if a licensed home inspector deems there to be structural damage to the house, you don’t have to buy it. Lack of home inspection contingencies means that even if the home inspector finds that there isn’t a single load-bearing beam in the whole house, you’re stuck with it until a strong wind blows it over.) It means closing whenever the seller wants. (More on this in a minute.) It means offering literally half of your down payment as something called "earnest money." (Which, by law, doesn’t even have to be returned if you don’t get the house you’re bidding on.) If you are looking into buying a home and somebody mentions that it's a hot market, go renew your lease. So we eventually found something we liked, in a neighborhood we weren't afraid to live in, and that we could actually afford. The one quirk was that the seller was insisting on a closing date of May 30th. We made the offer on May 10th. This was the first mistake we made. It is nearly impossible to close in 20 days but of course nobody mentioned this when were writing our contract or our check for $5,000 in earnest money. Yes, we should have run the contract by a lawyer but we're broke and in our twenties, we don't exactly have a lawyer on retainer, standing at the ready to review our many business dealings. The contract was accepted and we were now officially on the road to settlement. The road through the Gaza Strip has fewer landmines, the only difference being that Gaza Strip landmines, mercifully, kill you quickly. Remember those four pre-approval letters we had in hand when made our offer? Turns out they are only good for getting contracts approved and committing yourself to paying huge sums of money to sellers. When you actually try to get the loan to pay that huge sum of money you are now contractually obligated to hand over, the lenders all suddenly stop answering their phones or remembering your name. The bank we use for our checking account decided to take back their offer of financing because the broker we dealt with lied on our application. We didn't ask him to lie for us; he just did it to be helpful. They caught the lie and rejected our application. Two other places that had pre-approved us claimed that the programs they were planning on using had suddenly disappeared and there was now no way we could qualify for a mortgage because we are peon scum of the earth and should be eliminated from the planet. The last place kept telling us that we were all set but day after day went by and they couldn't quite get the inspiration to finish processing our paperwork and tell us how much our rate was going to be. Really, what's the difference between 7% and 17% when you are dealing with hundreds of thousands of dollars? They seemed shocked that this was stressing us out, what with closing a distant week away. So just days before we were supposed to go to settlement, we pulled out of the deal using a loophole in the contract. Wouldn’t you know, the next day the financing paperwork was completed. So now we were left with financing and no more contract. Luckily the seller didn't want to go through the whole process of selling his house again (I guess he didn't get the memo about how hot the market was) so he let us rescind our rescission and we ended up homeowners. Following all this? Trust me, neither were we. Was it worth it? Well, I like the place and I'm enjoying the freedom of being able to put nail holes in the walls without worrying about security deposits, but it's going to take years for my hair to grow back and my hands to stop shaking from frustration. Once we actually began the process of buying a place, the same people who had been encouraging us to do it began to tell us all sorts of charming horror stories about their own experiences. I would have appreciated the stories before I signed my life away. So consider this my public service to you, the renting public considering buying your own little piece of the American dream. |
| THE AMERICAN DREAM |
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