The Search for a Property (Part II)

Truth be told, my father-in-law first showed us the property listing at least six months before we went to see it.  I vividly remember saying something to him like "what do you think we're rich?  We can't afford that!"  But the price of the property dropped dramatically in that six month time period.  So, one chilly Sunday morning we found ourselves looking at two houses on five acres with a huge garage and partially collapsed tractor shed.  The place wasn't exactly a complete mess (in our opinion), but it certainly needed TLC.  One saving grace of the situation is that both houses had been rented to tenants for a few years -- that kept all the systems running in the houses and people inside to notice when something was leaking/broken.  After looking at a lot of vacant and foreclosed houses in our property search, we learned that an occupied house is the safest house.  That Sunday morning, we fell in love with the place in all its fixer-upper glory and endless possibilities for the land.

After talking over the property with our parents and crunching some numbers, we drove out to the realtor's office after work the following week, put in an offer, and within thirty minutes we settled on a price with the seller.  Wow, that's was easy! we thought.

Then the real work started.

First off, we scheduled the home inspection.  For reasons mentioned in my previous post, we love our home inspector because he really protected us from buying a damaged house.  Also, he's a fun guy and knows that we are a little nutty.  There was nothing that turned up in the home inspection that was extremely detrimental, but there was a list of repairs we would need to take care of, including the septic system.

The next step was getting a whole bunch of paperwork in order to obtain a mortgage for the property.  This entire process took us five months.  Seriously.  I had bought a condo back in 2007 and because of the housing and mortgage market crash, buying a property had become much more difficult.  The mortgage company wanted everything they could get aside from a DNA test.  And we had a mortgage broker who was a complete idiot, lost paperwork we sent him, and pushed our closing date three or four times.

It was also a particularly a tough deal because we did a 203k FHA building loan rolled into our mortgage to account for some necessary repairs, like a new septic system.  Not only did the building loan make the mortgage process more complicated, it also raised our closing costs considerably.  The other really nerve-wracking aspect of doing a 203k FHA loan is that the property had to appraise for both our purchase price and the building loan.  It was a nail-biting, phone screaming, micromanaging kind of situation.  I spent countless hours on the phone with the mortgage broker, the bank, our lawyer, and the realtor.  And then I had to spend a lot more hours on the phone with family members to talk us off the ledge.

Let me quickly break down why this deal was so tricky:

1.) Some things took a long time because the sellers are in their 70s, have no cell phone, don't "do" email, and take long trips.  A lot of times it was difficult for the realtor or their lawyer to reach them.

2.) There was a partially collapsed tractor shed on the property.  You can't have partially collapsed structures around with an FHA loan, but we expressed that we wished there was a repaired tractor shed.  So, we were able to negotiate that the sellers (with some of our labor) demolish the tractor shed and then give us the insurance claim check at closing.

3.) The cost of a new septic system for this size property was so exorbitant that we wouldn't progress with the deal unless there was an agreement met for the sellers to contribute money to the new system.  The lawyers handled it and made it work and now I know more about septic systems than I ever thought was possible.

But as I said before, five and a half months after settling on a price, we got to show up to the closing.

The Search for a Property (Part I)

Although we have become novice gardeners, my husband I really didn't set out to become homesteaders this soon.  It was a dream, yes, but it wasn't the original plan.  I knew it was the long-term goal because we both had visions of drinking morning coffee and looking out at a field, and we decided together that that was our vision.

Our search really began to get a place of our own to invest, live without paying rent to a landlord, and be able to practice and refine our homesteading skills.  We began our search in June of 2014 and first looked at this place.   It was super cheap and had character.  We are both obsessed with character in homes.  The house also used to be the general store for the rural area and it was a post and beam structure.  However, we decided the property needed too much work and we were a bit scared about we would find when we opened the walls.  We didn't bid.

We then spent the better part of our summer looking at houses near and around the Jersey-side of the Delaware River.  We looked at this one, this one, this one, and this one (among many others).  For one reason or another, none of these were our house.  Then, we found this one.  We were in love (and mind you, the price was about $50k higher than it is right now).  We negotiated a deal, settled on a price, mentally moved in our furniture, began dreaming about our perfect garden, and scheduled our inspections.  Little did we know that a home inspection can make or break a real estate deal.  The septic passed inspection (aside from a now-illegal dry well for the laundry gray water) and the well water failed, but could be easily remedied with a water treatment system.  However, our home inspector, who is amazing and incredibly thorough, revealed numerous serious structural issues.  Between a house that was nearly sliding off of the foundation because of water damage to a roof that was not built to code (beams too far apart and roofing wood too heavy), our dreams of owning this house was OVER.  Not to mention that the sellers' furnished us with a letter disclosing that the house would be "close to" construction for the new Penn East Pipeline project.  Our hearts were a bit broke (lesson learned) and we took ourselves out for summer afternoon cocktails to soften the blow.

Within 24 hours we were back searching for more properties, but the summer was coming to an end and our time was about to become limited.  (I'm a teacher, we only have one car, and my husband was applying to teaching jobs.)

Then, by some magical turn of events, my husband got a teaching job (on the first day of school, no less) and we were able to reevaluate what we could afford.  We asked ourselves: Should we look for the "forever" home?  Then we stumbled upon an incredible place (and what would turn out to be an incredibly challenging real estate deal) outside of Frenchtown.  We resolved that everything happens for a reason, and that although this property probably wasn't for everybody, it was perfect for us.

If you want to read the story about how we found and negotiated our current house, stay tuned.