Getting started on home work

To those who don't live nearby (or who aren't on Facebook), we closed mostly without incident on Wednesday, as scheduled! Woo-hoo!

I say mostly because the closing documents were wrong in a few places that we caught - notably that title commitment policy that I'd already made them correct back in January (the error involved setbacks, kinda important information). When we were asked whether we had a correct copy of the title policy, I broke out the chocolate bar. You work for the title company, you go find the corrected copy and prove to me that the title company knows what it's doing (or can at least pretend long enough to get us out of there)!

Friday was a very busy day on property as our electrician spent 8am-2pm fixing the code and/or safety issues that had been identified in our inspection report, plus installing a replacement ceiling fan for the one where a blade had been broken off! We have had Joseph do work on 5206 and we really like him; we also appreciate his taking time to explain what he's doing and why and what we need to know. We're happy to pay to be educated!

It just so happened to work out that the maid service we'd hired to do a "move out" deep clean showed up shortly before Joseph left, so we weren't in their way too much. Everything got scrubbed, dusted, mopped, cleaned. Inside all of the cabinet and drawers, the insides of the windows, you name it! Very nicely done.

Today, we had a lot of work we needed to do at the community garden, so we didn't get over to the new house until about 5pm. We took a bunch of "before" pictures of the outside and set to work on the vast multitude of trees and shrubs that need removing (that are sized such that we can remove them ourselves with hand tools).

Roy had the honor of sawing down the first tree. It had the honor of drawing first blood, however! The saw slipped and cut his left thumb and left index finger knuckle. I took a picture of him victoriously hoisting the tree before he headed back to 5206 to get cleaned up and bandaged. We now have peroxide and bandages at the new house.



I got to remove the 2 trees that bugged me out front (for which I will surely pay in the morning). By the time it got dark, we had removed 8.5 trees (the other half requires a chain saw to finish cutting the trunk down). That means we only have about another 41.5 to go.... Really. The professionals will have something like 11 trees to remove when they come on Monday.

If you want to see the property and/or house before it changes too much more, swing by on Sunday, 2/20, 4:30-5:30, and take a look around. (Roy has a mid-afternoon church gig from 2-4:30.) You can see our new table and chairs that we bought at The Urban Market Houston this past Sunday-we think that the table might be from an English pub. (Just step over the piles of Elfa shelving that I bought Tuesday night, the last day of the Elfa sale until Christmas Eve.)

All Systems Go!

The plumbing checked out fine today once the house was de-winterized. I cannot say enough good things about the Fox Inspection Group. Excellent service for the original inspection - and they came out and re-inspected the plumbing for us free today. Now, that's what we call customer service! They have a very happy and very satisfied customer.

The funniest thing that happened today (and there were a whole lot of unfunny things that we are just not going to talk about!) was that we learned that the $240 repair to the irrigation system that the seller had to make due to freeze damage was COMPLETELY AVOIDABLE. It turns out that the backflow preventer which froze and blew its top and ruptured the two brass valves near it could have (SHOULD have) been drained. The morons who winterized the house apparently didn't know what they were looking at, and did not drain the system. (But, now we know how to drain it ourselves. Yea!)

We are set to close at 10am across town. We'll go to the bank in the morning, get a cashier's check for closing costs, then head to closing. Hopefully, we'll have keys by the afternoon.

Keep thinking good thoughts. We're almost through with insanity that we have no control over - underwriters, title agents, out-of-state sellers who are businesses rather than individuals, etc. Then in a few weeks (yes, I need some time off), we'll start in on the remodel insanity again, talking to architects...

Whacked some moles today

Early afternoon, I realized that we hadn't set up any utilities yet, because we've been so tied up with everything else.

So, 2 1/2 hours, multiple website visits, and 2 phone calls to providers (and too many calls and e-mails to count to Roy) later, we have all basic utilities slated for changeover on 2/16-and just in the nick of time, too. Had we called on Monday, all of the utilities would be cut off by the seller on 2/16 and we'd have had to pay reconnection fees to get them hooked up on 2/17. Minor disaster averted!

About 5 minutes after that, around 4:45 PM, our loan originator called me to say that they'd just seen our loan clear underwriting. YEE-HAW! She and our processor had been talking about the insanity that underwriting our loan had devolved into when she saw (or heard) our processor jump up and say, "I saw it go! It's cleared!"

The lender will get our paperwork submitted to the title company so we can get the closing costs established.

When Roy got home, we moseyed on down to the new house to confirm what we already knew - that they haven't repaired the irrigation system. That's all right, I'm looking forward to suing an out-of-state company at this point. They made this process hellish, so we'll sue them in small claims court for the cost of the repair. Since they made us initial all of the pages of THEIR INSPECTION report that showed that the irrigation system was in working order, we have the evidence we need to prove that the house was not delivered in the same condition as it was when we signed the contract for it. Sounds like fun, right? Right!

However, if their craptacular "winterizing" of the house caused any damage to the interior water lines which results in damage to walls or floors, we'll be suing in real court. Because, by damn, we're going to close on this house on 2/16.

We'll get there

The processor and I finally connected about 5:30 this evening. I will upload a scan of the terms of the HELOC in the morning so she can run figures as if we have maxed out that LOC at the maximum APR that it could ever have and then send that to the underwriter as a monthly recurring debt obligation. Even if we did that, our debt ratio would still be well within underwriting guidelines.

(It turns out the underwriter is new, which is apparently part of the problem. Our processor is about ready to complain to her supervisor about this particular underwriter.)

BTW, our processor thinks the underwriter is being stupid, too. For one, she said that they (none of them) can require us to pay off this debt or that debt or close this credit card, etc., so she doesn't even understand why the underwriter is insistent that this HELOC be closed or the lien released from this property. They cannot require any specific thing of us - if they wanted to us to improve our debt ratio, they could say, "you need to improve your debt ratio" - but they could not insist that it be improved in any particular way!

Quote from the processor: "I don't understand her reasoning as it will not have any bearing on this loan".

This may escalate to the CU to pick us up as an "unsaleable" if the underwriter won't approve our loan. All that means is that the CU will have our loan on their balance sheet for the life of the loan and we wouldn't be bundled up and sold on the street. Neither our processor nor I believe that the CU would decline to take our loan.

Our processor said we will make our close date of 2/16 one way or the other. Yay!

Of course, the plumbing repairs still need to be made at 5127 and the house still needs to be de-winterized so that we can get the plumbing (water lines only) re-inspected. Starting on Saturday, we should have decent weather through the day we close.

We're almost there. Almost. We can almost feel the bathroom that isn't 20-30 degrees colder than the rest of the house when it's freezing outside. :)

Speechless

Literally. Let me just say, God works in mysterious ways.

Out of the blue Saturday night, I developed laryngitis (okay, so my throat had been bothering me slightly). We wondered what was up with that, and now I think I know. It was to keep me from screaming at people involved in this house-purchase-thing.

First, let me present photographic evidence of what greeted us at the new house (on which we have not closed yet) when we moseyed on by there on Saturday to see how it had fared after our really cold weather last week (it got down to 16 degrees here and there were many, many hours at or below freezing for a couple of days running):








Silly plumbers - don't you know that even if you've cut the water to the property and "winterized" the house, that a completely unprotected brass backflow preventer for the irrigation system will retain some water and freeze and explode with temperatures like we had last week - and the pressure will also burst the two completely unprotected brass valves nearby? Update on this situation: they are supposedly repairing it today. Just in time for more nights of 25 (although the days should be significantly warmer - aka above freezing - than last week!). Update of the update: they didn't do squat there today.

Next, we move to today's astounding demands from the underwriters, which we view to be unreasonable. I'll share just one of their "conditions" with my readers:

3. Borrowers to send a signed explanation letter for motivation for moving into another primary residence on the same street as the current primary. I know we already have a letter saying that you intend to move into it as your primary, but it doesn’t give the motivation… [emphasis theirs]

Since when does someone in the United States of America have to give an underwriter for a mortgage loan any explanation for buying any piece of property and making that one's homestead? I'm sure if we were buying up in Bellaire or West University that we wouldn't be asked such an obnoxious question. But because the address is on the same street, they find it absolutely necessary - a condition of their approval - to know the motivation behind our move to a new property.

At this point, we've answered their questions and are holding our ground on maintaining our line of credit (on our current home), which was involved in their condition #1 (get rid of it). They have no cause to tell us how to run our financial lives. That line of credit is completely, 100%, collateralized by our current property, not an unsecured loan. Deduct our current property from our net assets if you like (and then deduct that line of credit from our liabilities), but you cannot order us to close that line of credit. End of discussion. [It was already figured into our credit score (which is excellent).]

We'll see what our processor says when she gets back to us.

T minus 6 days and counting, folks, til we lose our interest rate. Last day to close is 2/16.

And on the 12th Day of Christmas

we signed the contract for a new house!

I suppose it is nice to know that there are at least a couple of people who still get holidays and vacations off from work, namely, the listing agent of the house in question, and the people in charge of that house at the relocation company. It took from Dec 23 to Jan 4 to get any kind of a response on our offer. It might be noted that patience is not my strong suit.

On Tuesday afternoon, we finally had a few back and forth rounds of counter-offers, but the workday ended before we'd found a price. Wednesday came and went with our latest offer still on their table. Nada.

Finally, Thursday, Jan 6, around 2:30, our agent called us with the relocation company's final offer. It was a little higher than we'd wanted, but it was ultimately acceptable to us (we'll see how the appraiser feels about it).

Now, the challenge became getting an executed contract! On Friday, the listing agent contacted our agent - there were pages from the relocation company that we hadn't initialed. Fine. Roy met the two agents at a Starbucks and initialed all of the pages that had no indication they needed to be initialed, like all of the pictures that their inspector had taken in Oct.

Then...back to silence. And more silence. Our neighbor informed us that some real estate agent was still showing people the house after we'd agreed to price. Was the company negotiating with other potential buyers and stalling for time?

And more silence from the Seller. (I'm pretty sure that our agent is tired of hearing from me each and every day.) Finally, when I got home Monday night at 5:30, it was to a message on the answering machine that we had an executed contract!

The listing agent had (prematurely) had the house de-winterized for inspection last Friday, since the inspection has to take place in the 7 day "inspection period" (relocation companies get to write the rules in real estate contracts, isn't that interesting?) immediately following the execution of the contract, rather than the normal 10 day "option period" in Texas. Since we're buying the home "AS IS", the inspections are basically just a CYA for anything major , and we will have the Home Service Protection program to fall back on should we need it. Which is good, as we won't be able to test the A/C, since it won't get above 50 for the entire week! And I'm sure that the listing agent is sweating the de-winterization of the house with all of the nasty weather headed our way. She'll get to winterize it again tomorrow afternoon.

The HAR listing for the property shows the house and grounds as they are today pretty nicely. Although it doesn't feature a picture of the fan with the broken off blade, for some reason. :)

Our closing date in the contract was set for 2/7/11. Since the seller kept screwing around with delays, there is no way we can make that date-30 days came and went last Friday. Now we have to amend the contract to set the Closing Date for 2/16/11. We'll sign that paperwork tomorrow (Tue) and then the Seller has to sign it, too.

Our loan originator has been waiting for the contract...and waiting...and waiting. We did lock our rate on Friday, though. We and our lender have everything lined up and ready to head to the processor to start that process.

But, happy, happy! We have an executed contract, we'll have the house inspected tomorrow and sign the contract extension paperwork, then we should be on our merry way to CrazyLand.

Doubling Down

or, "Pardon Me, Have You Seen My Ever-Lovin' Mind?"

Guest blogged by Roy.

Any fool will tell you, if you're having trouble getting a remodel off the ground, that the thing to do is to take on two remodels. That's how you know they're fools. They say foolish things like that.

Or maybe it's not so foolish. Maybe it's brilliant, in a non-obvious, John Nash kind of way. At least that's what we're hoping, because that's the direction we're going, now. See if you can follow the meandering path of reasoning we've been on:

To have our house remodeled, we are going to have to move out of it for a not-well-defined period of time, between six months and a year. We could either pay rent, or we could buy a place so that we'd at least have some amount of equity to get back on what we pay. Now, if we're going to buy another place, we could just fix up our current house and sell it, and move into the other place. But we don't want to leave the neighborhood we're in. We like it here.

However, there is a house a few doors down from us that has been on the market for some months. It is on a substantially larger lot (though the house itself is smaller). We could buy it, do the big remodel on it, and then move in there, remodel our own house, and rent or sell it.

We walked around the outside of the neighbor house, and determined that its layout isn't suitable to the design we want. The master bedroom is in the front of the house, which precludes expanding the master suite, much less the ability to tack the Endless Pool enclosure onto it. Sigh.

But since Shelly was already in real estate researching mode, she continued to look for properties to buy, on the idea that we could move there, remodel our house, and move back in. She located a short sale home that has been empty for four years. It's in a really nice little neighborhood, on a nice-sized lot. The house is a comparatively spacious two-story. We liked it, fundamentally, but it needs a lot of work, including a new air conditioner, and all siding (the first story is brick, the 2nd story and the garage are siding). And there's a tree leaning on the roof, but it doesn't seem to have penetrated. The plumbing inside has leaked at some point, damaging floors. The utilities have been off so long that the meters were removed.

We ran the numbers on that, and found that we could actually afford to buy it, fix it up, do our remodel, move home, and then keep the other house as a rent house. As a bonus, we know the people who live across the street. It would be really tight, though. And it leaves us on our original lot, whose size is very constraining.

So then we did some more thinking about what we wanted to achieve, and realized that it would make more sense, if we're just going to live in another house while we fix ours up, to buy the one down the street that doesn't need all kinds of repairs, and is just down the street. Duh. Then we went one step further and closed the circle: we can expand that house in much the same way as we'd planned to expand our own. We'd just add a new master suite on the back, with the pool attached. The front bedroom stays a suite, a nice feature for guests. An added advantage is that the house becomes a 3-3-2.

So that's the plan now. We're running numbers to see how many phases we have to go through to get it all done. Keep your fingers crossed and keep watching this space.