Home Buying Blues: Walking Away From A House I Hoped To Buy

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A month ago I posted that I’d made an offer on a house, and that the offer had been accepted. I’d hoped that by now, we would have closed escrow and the house would be mine.  Alas, it was not to be. There were several issues, but ultimately it came down to the roof (photo above).  When I offered on the house, I knew it needed a new roof. So, I thought to myself, “I’ll buy the house, and put on a new roof.” If only it were that simple. Everything seemed to be going pretty well until my mortgage broker drove by to take a look. Her conclusion was she didn’t think the underwriters would approve a loan for a house with a roof in such poor condition. So, there I was, in a catch-22. I couldn’t buy the house until it had a new roof, and I couldn’t put on a new roof until I owned the house. She feared that if we took the next step of ordering an appraisal, I would only be throwing away the $550 appraisal fee.

My mortgage broker’s take is that five or six years ago if you were breathing, you’d get a loan, and if the house was standing, it would appraise for the selling price. But today, the pendulum has swung far in the other direction. Today, every “i” must be dotted and every “t” crossed, and then every “i” dotted and “t” crossed all over again for good measure–and it still might not pass underwriting!  A further irony is that Wells Fargo was both the seller and the intended originator of the loan, so when I had to walk away, they lost on both ends of the deal.  But what do they care? They’re making tons of money elsewhere. It appears that only someone who can pay cash will be able to buy this house. In other words, an investor who will rent it out, resulting in another house occupied by a renter, rather than by an owner–not good for a community which badly needs more owner-occupied homes.

But the upside is, I’ve learned a lot. I’ve learned that the world of real estate is now an inscrutable, alternate reality. Who can figure it out? Little is transparent. Nobody admits to knowing why offers are rejected or accepted, and the rules seem to be quickly changing. It’s like trying to play poker without knowing ahead of time what will trump what.  I’ve also learned not to be a romantic, not to fall in love with a house.  Yes, a house may be cute, and have the potential to be drop-dead charming, but I’ve learned to take very seriously the condition of the foundation, roof, windows, plumbing and wiring.

And so, older but slightly wiser, I trundle on. I’m lucky that I don’t have to move. I’m living in a lovely rental where I’m happy. I can take my time, but it’s still true that I’d rather be paying on a mortgage than paying rent. A few minutes after bowing out of one deal, I made an offer on another house.  It seems that a house I’d previously offered on had just come back on the market (who knows why–that, like so much else in this industry is not disclosed). So I put in an offer once more. This house (see below) has no obvious issues, but it is  80-years old and unknown what a home inspection might reveal, were my offer to be accepted.

Something else I’ve learned?  To live with uncertainty. Buying a house is so not for sissies. Wish me well!

Update: (February 29th) My offer on the house below has been accepted.  It is now in escrow, and set to close by midApril, and hopefully earlier. We shall see if this one works out!

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Previously I'd made an offer on this house and didn't get it, but it's come back on the market, so I've made another offer. The facade of this house looks great, but the other three sides, not as much.

This house, two blocks from the one above, has just come on the market with an asking price of $79,900--although it will surely sell for more.

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11 responses

  1. I’m in the same situation. I’m looking for a house, and (details aside) I’ve had a very hard time getting a loan. I’d like to get something with a large enough back yard to grow all my own vegetables. (talk about locally grown and organic) I’ve gone to sleep visualizing all with such hopeful anticipation. still i wait.

  2. This is a cool looking house too!
    Reason for everything, as you know, and everything happens just as it should!
    Love your website! Love your newsletters!

  3. So sorry to hear about this news, but hopefully your new offer on the other house will work out. I agree with what Roberta wrote: it just wasn’t meant to be, and patience will lead you to what is truly meant to be.

  4. Ditto to all above comments. My brother, Carl, would have been such a help to you! He bought, restored, and sold with such savvy and good luck.

  5. Love your writing, recipes ~ friendly energy coming through!

    Good Luck on the “one” house coming to you !

    Always maintain only a joyful mind, Pema Chodrun

    Emily

  6. I wish you luck. The right house will come long. We bought our farm as a short sale.
    It took more than a month from offer to finish- so much stuff to know! It painful but worth it too

  7. i have no doubt you will buy the perfect house that is just right for you and all of us to come visit. i love that you embrace your experience as an opportunity to learn. xoxx

  8. So sorry to hear about losing the gold house–I drooled over the pics and lived vicariously through you. That kitchen! Now, I like the 2nd pic better than the first…but I am taking to heart your advice to not “fall in love with a house”…or something thereabouts. Best of luck with the home buying process; I’m trying to work up the nerve myself!!

  9. Hi Gary and others who are in similar situations. I’d mentioned this before on an older post. Look into a loan called 203k. They let you make repairs and roll the cost into the mortgage. The house is appraised as if the renovations are already complete, so it makes the the condition of the house won’t prevent the mortgage from going through. You can also roll in all kinds of other renovations including energy-effeciency items. Many mortgage brokers aren’t familiar with these since they involve a bit more preparation. But it’s a gov’t backed program under the FHA. I looked into it for my home. Though it wouldn’t work for my situation I’m sure it’d help out others out there.

    • Steve, Yes, we did attempt to do a 203k, but it would have taken more time, and the seller didn’t allow us a time extension. In any case, as I noted in the most recent house post, my offer was accepted on another house, one with far fewer issues. Home inspection is Tuesday, and, with luck, I may be moving in April. Thanks for your excellent input. Gary

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