Friday, January 21, 2011

The House Debacle (or Why This Market is Not So Hot)

This post could also have been titled, "Why you don't want to have a house built, put it on the market 6 months later in an economic downturn and expect it to sell for anything even close to what you paid," but that just seemed a bit too lengthy. This post won't be quite as long or detailed as I'd originally planned because I have a lot of other writing to do today. Just finished up the magazine's e-newsletter for this month (don't know why but it's not that fun for me to do the newsletter. Ok, I do know why but I won't put it here. But that's why it's work, right?) And I also have some writing that I have to have to have to get finished up for Brian's uncle Doyle. He has a mission/day shelter for homeless teens called Sox Place and they have asked me to put together a bit of info from all of the various press that they have received. I've not had loads of time to devote to it with the holidays, baby, magazine work, etc but it's really important that I get it done this weekend so I get it done!

Anyway. Back to the house debacle. I guess I'll begin at the beginning! Back in late April, almost two years ago, we found out we were having a baby. We were stoked, but we also weren't living in a baby-optimal situation. The area was a little rough, the townhouse was a little small... and probably filled with lead paint and asbestos, ha ha. So we set about trying to find a house to buy. We decided to go with this "green" builder, Paul Allen. Man, did we think they were great throughout the building process. We switched floor plans/lots once, they were just terrific. We thought that not only were we getting a great quality, economical house, but also making some good friends in the process. We were envisioning visiting the sales center on the weekends just to say hi! Clearly we felt like there was a good relationship there. We took pictures of my belly each month in front of the house being built so we'd have the progress of the house and the baby. We met and became friends with our next door neighbors, whose house was being built at the same time. This was going to be our forever home, the end of us moving every few years! We'd go walk around the house with our video camera, plotting out our furniture in the rooms, picture the baby's room, etc. If you'd see these videos you would see how full of hope they were. And you'd think of how crushing it would be if things didn't quite turn out as expected. But alas, this entry would be pretty boring if I didn't tell you things didn't quite work out the way we'd hoped.

We found tons of things wrong during our walk through. Nothing major, but little things that had been totally overlooked. It was disappointing, but the builders promised us it would all be fixed, and they were our friends, right?! So of course, we knew they fix it all promptly and to our liking. Ha ha ha. We went ahead and closed on the house. We stayed in our townhouse for a few more nights while we spent the days and evenings painting walls and getting things done at our new house. We were SO excited to move in. We moved in, and then we started finding things wrong in earnest. I won't bore you with details, but I'm talking emailing LISTS of 10+ things to the builders every couple days. We weren't being ridiculously picky, these were things that you just shouldn't see in a brand new house. We were starting to question the quality of work, the quality control, that the builders had promised.

They started pretty much blowing us off, as though we were just making things up. They'd ignore our emails, ignore our phone calls, until we would threaten legal action. Then a couple things would be addressed, and we'd go back to basic radio silence. Besides these annoyances, something much greater was happening - we were falling out of love with the house. We were much less willing to overlook the things that once were minor dislikes about the floor plan or the lot, and those things became front and center. We'd talk all evening long about how terrible it was in the house. We would wonder if in two years the whole thing would collapse on us.

Somewhere during this time, I got this idea in my head that I would rather Gage grow up in Colorado than New Mexico. The schools in NM are ... well, not that great. The schools in CO have their problems too, but there are lots of charter options, private schools, etc up here that just aren't available in NM. So I talked to Brian about it, he pretty much said no way right now. We just moved, he said. I don't want to move to a different state. But he hated his job, and it got worse and worse every day for him. He finally agreed to call the Nissan dealer he'd worked at up here, just to get an idea of if they'd be interested in hiring him, for how much, etc. He sent a resume and interviews. The parts manager loved him, but they weren't really hiring then. He said they'd call Brian when they wanted to hire him. After some careful deliberation, we decided to go ahead and put the house on the market. The realtor we used was the wife of the service manager at the dealership Brian was at, so we thought she'd do a great job. We were wrong again. She listed our house so high we had ONE showing on it in around 3 months. We contacted another realtor and he basically told us there was no way our house could be sold for anywhere near what we paid for it. He said he'd look into what he could do for us, then he ran away and never contacted us again. We panicked. We wondered if we should just let the bank have the house. What were we going to do when the job came through? We looked into short sale, and decided that was our only option. We had our old realtor unlist the house, and as soon as that happened, short sale realtors crawled out of the woodwork. The first were scammers, but once we got through those, we got a really great team who was experienced and legit to work with us. We started the process of short sale with them back on September 13, right before we moved away.

Today is January 21. and our house is still sitting. We have jumped one of the final hurdles in the short sale process, that the bank has agreed we had a qualifying hardship by having to take a job out of state. That was the biggest hurdle, the one we've had to jump through soooo many hoops for. When you do a short sale, you're basically asking the bank to forgive you of some of your mortgage debt, and take a loss on the sale of your home. It's a win-win in a downturn. They get to not deal with a foreclosure, and neither do the home owners. However - because you're asking them to take a many thousands of dollars kick in the shorts, it is a very lengthy process and you basically have to open your financial life to them - more so even than when BUYING a house. We had to come up with tax records for the past two years, pay stubs (a few times), bank statements, hardship letters telling why we couldn't just keep the house, financial statements, and more. We're in the final leg of the house battle. They've appraised our house, so they know how much less than we paid for it it's worth (hint: it's worth around $45k less. AND they'll take up to $60k less, approximately. SAD.) Now that the bank has decided that we definitely had a qualifying hardship, they just have to figure out which of our offers they like the best. If that person still wants it, the house can close and it'll be gone. The fun part of short sale is that the bank won't even consider a short sale for you if you are current on your mortgage. 'Cause, hey, if you can afford it, what do they care if you can't live in it?! So we had to stop paying our mortgage, and our credit has suffered. I'll grant that it probably hasn't suffered nearly as much as a foreclosure, but that doesn't mean that there haven't been times we've talked about just letting the stupid house get voluntarily foreclosed, lovingly known in the industry as sending them "jingle mail," which refers to the jingle of the keys in an envelope, making their way to the bank.

I'm sure you can imagine how much the whole thing has weighed upon our hearts. To go from so excited and loving the house, the process, etc to just wanting to unload the pile of junk, it's a pretty big, sad change. Fortunately we're almost there, it's been a marathon not a race. When we finally realized that the house wouldn't sell last year and we were almost done with it, we decided to make the move out of my parents house. We'll be moving Feb 12 or thereabouts, and we CAN'T wait! We sign our lease Feb 9 and that will be a glorious day indeed.

What a long story. I commend you if you got through all of that. I promise not all of my posts will be such rambling, lengthy diatribes, but the house story is an important story to tell. I hope you found it interesting.

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