Our Summer Home Buying Experience, Part 1: Buying a New House

Over the course of last summer, we went through the process of selling our house and buying a new one. Our family is growing, and the house we had was closing in on us. We also had a healthy amount of equity built up, and thought our need for more space was an opportunity to look for something a bit nicer too.

This was to be my first time both buying and selling. I married into the house we were moving out of, and didn’t get to experience the process of buying the house when my wife acquired it. It was quite a process, and I have wanted to share my experience ever since. There are things that went really well, and other parts of the process I will do differently next time (if we ever have a next time.)

We did things a little backward, beginning with the buy rather than the sell. We are very blessed in that my in-laws are our “bank,” holding both the mortgage of the house we sold and the new house. This gave us freedom, and in some cases power, we couldn’t squander.

Another aspect of this experience was using a Realtor that we knew and trusted. He is an elder at our church, and a friend. We had an understanding going back a year or two that won him our business. I’m now a licensed architect, and had hoped to buy a lot and build a house. Our Realtor moved over from home construction to Realty a few years ago when the economy forced him out of work. He had about two decades experience building houses. He was going to act as my mentor in the process of building, and I would use him as my Realtor when it was time to sell our house. We couldn’t find a reasonably priced lot anywhere, and eventually abandoned our hopes of building. Since we had an established relationship, and a pre-existing agreement, we thought it only natural to use him anyway.

Having a Realtor is really helpful, and though some people get burned by Realtors and swear them off, there is real value to a good Realtor. Good ones do a lot of work behind the scenes that you never see, and it’s a (partially, at least) thankless job.

When we got serious about looking at houses, he set us up with an MLS search that would alert us to new listings. We would scour the listings matching our search criteria, find homes we thought we might like, and he would arrange for showings.

After maybe a dozen showings, we found a house that we liked, and wanted to put an offer in on. It had the bedrooms we wanted, an office for my wife to work in (she works from home most Fridays), a nice sized yard, and was convenient to our oldest son’s school, as well as a bus line for her.

We put in the offer on a Friday evening. By the time we got all of the paperwork signed and ready, it was late evening, and the offer went over shortly before we went to bed.

The next morning, we got word that our offer was rejected. We were a bit shell-shocked. We did offer a bit less than asking price, but our research suggested that it was priced too high. We knew that in order to get the best price on a house, we’d have to start low and negotiate to some point in the middle. We were looking for his bottom price. We were expecting a counter-offer, but not an outright rejection. The market was strong in sellers’ favor, and this house had been on the market for awhile, so we knew that a typical seller would be motivated to negotiate. We didn’t respond, but we didn’t withdraw our offer either.

Early the next week, we heard from the seller’s agent. He wondered if we were going to submit another offer. Our agent told them we were a bit shocked by the response, and had no desire to negotiate against ourselves just to get him to the table; so no, we wouldn’t be submitting a new offer, we were waiting for a counter.

Through our research, we had also learned that the house had previously been priced lower than the current asking price, and anything above that previous price would be a non-starter for us. We later learned that the seller had sold the house at that price the previous year, but the sale fell through and the house ended up back on the market.

The seller did counter after that, at the previous sale price. Because we had a lot of contentious back-and-forth through the agents, we weren’t sure if the counter was even from the seller, or if the agent was negotiating outside his purview, so we asked that the counter be in writing. When we got the counter, we countered back with two simultaneous offers. That needs a short explanation. As I previously mentioned, we were getting the money from my mother-in-law, not a bank. She was signing offers as a co-buyer with us, making the offer a cash-offer. Sellers love cash offers because it cuts out a lot of hassle brought on by banks. We knew that was worth something, and had no desire to just give it away. We also didn’t have the pressure of two house payments forcing us into a contingent offer; Mom was okay with us not making payments on the old house while we tried to sell it. So our counter-to-the-counter was a “take your pick” offer. We offered a non-contingent offer at one price, and also countered at another price closer to the seller’s counter (and previous sale price) that was contingent upon the sale of our house. Both counter offers were again rejected outright. By this point, we had been haggling back-and-forth through the agents for about a week, and had lost a lot of our initial interest in the house. When we got word of the second rejection, we instructed our agent to write up a withdrawal of our offer, we were done with this guy.

This left us a little bitter to the process. We had a lot emotionally invested in this house, and were very disappointed it didn’t work out. Our agent was great though, he stuck with us through the entire process, and represented us very well.

It took a little time for us to get back into the game of looking for a house. We had to simmer down a little and put the first attempt behind us. Through it, though, our agent was getting a much better idea of what we wanted in a house. We didn’t realize that he was doing some looking on our behalf, behind the scenes. We had thought he just whipped up a quick MLS search and sat back waiting for us to ask for showings.

He sent over an email one day of a listing he thought we might like. We had actually seen it, but had dismissed it before looking very closely. It was in a suburb my wife had decided she wasn’t interested in, it was getting too far out for her to be comfortable with the commute. This house was in that suburb, and she wasn’t interested in giving a house a look, since she knew it was too far out for her to want it. His email did get us to look a little closer though. After looking at the listing more closely, we decided to give the house a chance, and had the agent set up a showing for Saturday morning. It was a nice house, and had one feature we hadn’t even noticed upon first glance: it’s on a small lake.

Saturday morning came and we looked at two houses. The first we quickly dismissed, it just wasn’t what we were looking for. The second was the agent’s find though, and we loved it! It’s a great house, the lake is really cool, and the location not as bad as the city might suggest. It’s just off the freeway, and only about a quarter-mile into the suburb we decided not to look in.

We decided to take another shot, and put in another offer. We started low again, but the sellers were much more receptive and willing to negotiate. In the end, we came a little above our pre-determined max for a non-contingent purchase, but decided to do it anyway. After the bad experience we started with, having nice sellers willing to negotiate was a breath of fresh air, and made us more open to bending on our self-imposed limits.

We got the house!

I’ll continue the story in another few posts; as there is a lot more to say, but I’m already going long.

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