The Admiral and I have been working on a home upgrade since mid-November when we saw a stunning house that we both fell in love with. We had been house hunting for a while because with the addition of our two little monsters, and my teenage daughters (who live with their mother but spend time with us), we were just out of space. I considered giving some of the kids away but had a hard time choosing which ones and the market is so depressed, I wouldn’t get much money for them.
So we took advantage of the sour economy and pursued a house that had recently come to market as a "short-sale".
Those in the real-estate market will probably correct my simplistic view, but these types of sales are not yet in foreclosure, but headed in that direction. The current owners can’t pay their mortgage, but the bank hasn’t started foreclosure preceedings yet. What happens is you negotiate and sign a contract with the seller, just as with "normal" types of real-estate transactions, but then the bank (or banks) need to approve the deal. Basically, the bank gets less money than is owed on the mortgage so they have to write off a bit, but for them it's much quicker and less expensive than a foreclosure. From the buyer's perspective, there is added risk as you need to sign away some rights (like getting any outstanding CO's yourself) and the process takes a long time. It's common for banks to take 3 months to simply say "yes" or "no" to the offer. A "no" starts the process all over again. Of course there are costs that the buyer must pay up front, like inspections, appraisals, etc that will be lost money if the deal falls through. In general, real-estate agents don’t like to show these types of houses because of the long sales cycle, the fact that they usually take a reduced commission, and because many deals simply fall apart on the way.
So, it was with (relatively) low expectations (but lots of excitement) that we waded into these unknown waters (there's the boating tie-in for those looking for it). We signed a contract on the new (to us) house, and put our house up for sale in November. Our current house is not yet sold, but it is agressively priced and once it stops snowing for a few weeks, we're certain it will sell. I can’t count the number of showings that have been cancelled or postponed due to the weather. If it doesn’t sell, we will be able to rent it, but I'd prefer to sell it.
After two months, the banks (there were 2 involved) finally accepted our offer and set an aggressive closing schedule. We close on Monday!
Here's a breakdown of how we made out. The new house:
Appraised for one third more than we're paying for it
Costs one quarter more than our existing house
Is two and a half times as large as our current house (5 bedrooms / 3.5 baths vs 3 bedrooms / 1.5 baths)
Has three times as much property as our current house
Is 95 (yes, that's 95) years newer than our current house (1989 vs 1894)
Has been mostly upgraded over the last 6 years. Upgrades include new bamboo flooring and carpeting, skylights (there are 9 of them), and an insanely beautiful gourmet kitchen
On the down side:
The basement and master bath are only 50% upgraded and we'll have to finish the remaining parts ourselves
The windows are original and will need replacing soon. That said, we have 117 year old windows in our current house so the windows on the new house are positively stunning (and efficient) by contrast.
Of course the new house is close to the water and we'll be moving the boat this summer.
Here are some pictures of the new place. They were taken back in November with the seller's furniture.
Yours truly and monster #1 in the living room
Two pictures of the living room from the loft (which will be set up as an office)
The largest refrigerator / freezer I've ever seen. The picture was NOT taken with a wide-angle lens.
Part of the master bedroom.
Half of the unfinished master bathroom. Shower stall with built-in seat and part of jacuzzi shown.
One of the guest bathrooms (zoom in to check out the tilework)
Half of the basement
Tile at the back door