Things got bad with the house on Friday, and they've remained bad. They've become a little worse in only that I can't believe the stupidity and lack of ethics of the people I'm dealing with.
A quick timeline:
The last four years: I've lived in the house, been a model tenant. About a year and a half ago, she asked me if I'd like to consider buying the place. I said yes, but I wanted to get myself in a better spot financially. Later, my old roommate approached her about buying the house. He backed out, and after that she promised me she would never sell the place out from under me and give me first dibs on it when I wanted to buy.
Monday: She calls me to tell me that the EPA sent her a letter saying that the house needed to be checked out for peeling lead paint, and that she and an inspector would come in on Wednesday to check it out. I'm in Michigan. She also asks me my plans for the house. I said I intend to stay for the school year, at least, and still enjoy living there, and that I would probably be able to buy the place in October.
Wednesday: She calls me, and says that the inspector wants to buy the house and that they're going back to look at the place the next day. The inspector tells her that to get the house up to code, she would have to invest thousands of dollars, and that he would offer her $80,000 cash to buy it on the spot.
Friday: The inspector didn't call back, but another real estate agent in the office of the owner's real estate office overheard talk of the purchase of the house for $80,000. He says he's got a couple interested in it, and the couple looked at the place at 3pm. They want to buy it. Meanwhile, Mrs. Cohn is "shocked" at the condition of the house, even though it's pretty much exactly the condition it was when I moved in, only there's more peeling paint.
The weekend: I get approved not only for an FHA loan, but also get preliminary approval for a 100% financing loan in which I would only have to put down $500. Still, both loans require an inspection, and Mrs. Cohn's (I frankly don't care about not using her name anymore) real estate agent doesn't think it would pass any inspection and wants to take the cash up front.
Meanwhile, I have two friends who offered her more in cash for the house than $80,000. I have one friend I play softball with who looked at buying the house in the spring who said she would pay $100,000 for it, today. However, the real estate agent is wondering how this buyer came out of the "clear blue sky" and is leery. It could still happen, but the contract is being drawn up today.
This house has not been listed, and is going to sell at more than $40,000 less than any other house in the area. It's not in the best shape, but it's certainly livable, and has gotten a new garage, a new roof, a new drainage system for the basement, a new hot water heater, and a new furnace since I moved in four years ago. Mrs. Cohn, the old lady who owns the house, is being taken advantage of, and her asinine real estate agent is giving her very bad advice that she's following.
It looks like I'll be kicked to the curb by September 30.
My options:
1. Buy a HUD house in the teacher-next-door program for half off. But the list is looking pretty bare at this moment. I like this option because at least it means that sitting on this good deal for the last four years turned into another good deal because of my job. Still, I don't exactly have a lot of time on my hands to fix up a place so I would need to be able to move in by October.
2. Buy a nicer house for around $100,000 somewhere in the city. I'm going out with my real estate agent this week to start looking. I don't really have much clue where I want to buy at this point, and hate to do something like this out of desperation.
3. Find another sweet rent deal like I've got now, one that can accomondate a large dog, a cat, and a roommmate.
4. Put stuff in storage space, find someone to watch the dog for a couple months (The Polish girl would absolutely love to do this), and find someone - a friend - who will let me live and rent a room in their house for a few months while I houseshop and save. This lesbian couple I'm close with just offered me this, but they don't move in to their teacher-next-door purchased home until probably October.
5. Curse loudly to myself.
So far, I've only accomplished #5.
I'm also considering how I might go on the offensive with the landlady. I'm madder than I've been in a few years, and would love to just stop paying rent to her. First off, I'm pissed and want to get even in what little amount of power that I have in this situation. Secondly, I now know that I can't trust her as far as I could throw her, and am worried about getting my $950 deposit back. If I call and cancel my August rent check, then not pay September, I wonder what could happen. I definitely have a case of living in hazardous conditions if the lead paint scenario is as bad as the inspector says (tenant rights in Baltimore state this explicitly). Plus, the roof leaks (despite it being new... the roofer hasn't come back to fix it yet), the upstairs faucet doesn't work, my stove doesn't work - there are plenty of violations that would at the very least be reason to open up a rent escrot account if I wanted to go that route.
I also don't think they've done all they need to do for the right of first refusal law, but the code is worded vaguely and I'll check on that tomorrow when I go to the Baltimore City Tenants Rights group that's on St. Paul.
Lastly, I don't blame Mrs. Cohn too much for all this. She's an old woman who is being taken advantage of. But her real estate agent, Diane Marsiglia, is a horrible person. What I hate most about her is the way she patronizes me, acting as if she's doing me a favor when she says that she's going to give me 55 days or is going to give me my deposit back. She's being an unethical bitch (I've caught her in two lies so far), and she's giving her client bad advice. For the life of me, I don't understand how she could get two offers to sell the house for $80,000 in three days - when the house was not even on the market - and think she's has to take the deal despite the fact that just a few calls from me around town to people I know netted an offer of $100,000. This place is a goldmine that someone could flip for a $50,000 profit with just a little bit of work.
Yes, that sound you hear is my student loans not being paid off because I was too chicken to jump on the place earlier. Oh well. Learning experience, I guess.
I'm still hopeful that something will work out. Maybe this buyer will drop out of the picture. Maybe my friend's $100,000 offer will be accepted. Maybe a friend of a friend's offer of $80,000 cash will be accepted and we'll be able to stay longer.
Meanwhile, I think I'm at the point now where I need to be on the lookout for housing options around. I'd appreciate if any of you Baltimoreans could pass them along to me if you come across them.
Quote For The Day II
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“No one expects you to take a vow of poverty. But I will say it betrays a
poverty of ambition if all you think about is what goods you can buy
instead of w...
53 minutes ago
17 comments:
Don't buy this house. I can't believe how much this story has been bugging me over the weekend, but based on what you write about your financial situation, buying this house is the LAST THING YOU SHOULD DO. My house cost 20% more, and with a down payment, even, our payments are around 1k a month for a 30yr mortgage. Just assuming that taxes and insurance are similar (which they may not be) and estimating 20 percent less, how the hell can you afford to pay 800 a month, when you are already in debt, even when paying half that in rent? My husband and I both work, or we wouldn't be able to afford it. And our house is, you know, liveable -- no peeling lead paint and in a great neighborhood, etc etc. Seriously, if you are late paying your dad back (which, he has a point, that the bank that lends you any money to buy a house will be sure to make really important) how can you afford to buy a house? I really don't get it.
I'm just a long time reader, who has watched you struggle with money for like, four years now, and buying a house is NOT the solution. Personally, I think you should follow the international school dream while you can. (And IS teachers can bank a TON of money, since a lot of the time housing is paid for, and the cost of living is lower.)
DON'T BUY THE HOUSE.
If you have friends that can afford to buy it, have you rent back and they get a good investment? Go for it. But don't buy the house. You'd have to live in it for at least 3 years to have it make any sense in a rent vs buy argument, and a lot can happen in 3 years. You think money is stressful now, wait til you are a homeowner.
DON'T BUY IT.
(I swear, I'm not a RE agent or a competing bidder or anything -- just a chick in the northeast who seriously worries about people making asinine financial decisions. I helped bail out Holden a few years ago, but I wouldn't bail you out of foreclosure. Think about it.)
Thanks, anonymous. But, real quickly, my house payments would be less than my rent payments of $750 (which a roommate pays half of, and would continue to do so if I owned the place). The big point of buying a home would be that my mortgage payments would be cheaper than rent payments, and this would definitely be the case here.
This house is livable and in a great neighborhood. The peeling lead paint is something any house built before 1972 would have - the plan always was to paint when I bought.
I may be late paying my dad back, but I haven't been late with things that matter - car payments or rent or bills.
You may be right on a few other of the issues, but, I could have had my student loans paid off in a year with a sale if I had bought this house a year ago like all my friends were telling me to do. I feel like I've waited too long on this one and I shouldn't make the same mistake again. The three year rule would not apply to this particular house if I could have gotten it for this price.
Thanks for the message.
I rather agree with Anonymous, not necessarily about buying a house period, but this particular house. It seems to me like you didn't even want this house until you thought it might not be there. Are you upset because you love the house, or because you don't like being bullied? See what's out there. You might be suprised at what you find.
cgg: You make some good points, but I have to say that I've had a lot of dreams about what I'd do to this place when I bought it. This wall gets knocked out, those trees get pulled out, this room gets painted brick red, etc. In many ways, it's the perfect house for a first time home buyer, in that I could be fixing it up and living in it at the same time. That being said, I sure don't like being bullied and that's why I'm so mad about it. But, if she had said I had until, say, Oct. 1 to buy the house, I absolutely would have done it.
The reason I didn't buy it before was mostly because I was lazy. And because I wanted to have my car paid off before I took on another big debt. But I now realize that this was not a good reason.
In all honesty, though, I have no idea what I should do. You'd be amazed at the variance of advice that I'm getting - most are in the pro-buy and I-can't-believe-you-haven't-yet and I'm so ambivalent about it all that I sway one way and then the next. But I definitely feel my ambivalence has hurt me on this deal and will continue to do so.
Original Anon, here --
It's really grating that you say you haven't been late with "things that matter," and you lump your dad -- who bailed you out of serious credit card debt IIRC, into the category of "doesn't really matter." I guarantee that if your dad hadn't paid off your credit cards, you wouldn't even QUALIFY for a mortgage, period.
Check out some Suze Orman books, from the library of course -- Young, Broke and Fabulous is her newest and would be worth a read.
I didn't realize that your total rent was 750 (you had said 375 in an earlier post) but even then, I find it hard to believe that your mortgage would be less, unless you're talking more than 30 years, which is again, not a good idea. Ours is 30 years, but we plan to refi for a 15 year mortgage once I'm out of grad school and working a better job.
I'm not saying that buying a house is bad, in and of itself -- hell, I LOVE being a homeowner -- but this situation just smacks of "Bad Idea Jeans" (if you remember the old SNL parody) the more I read about it. I would certainly pay off at least one debt -- car, your dad, something -- before committing to another. Put extra money away each month as a "house payment" and look for a duplex that would bring in an income and not just half the rent, or really, explore the international school scene. Maybe, instead of this being the kick in the pants to buy a house, it's a kick in the pants to change, in someway -- and a year abroad might be a great thing, esp while you're single and NOT tied to a home.
Just think about it, ask your dad for advice (while you've complained about him, what you've written of his advice really DOES make sense, so don't write him off so quickly) and don't buy out of panic. Absolutely get a home inspection -- there might be worse than lead paint (which, our house is from the 50s, but it had had its lead paint abated before we bought it, as confirmed by our home inspection and other tests, so it doesn't have to be a standard pre-1978 thing) and you'll be the one left with the bill if you find out after the sale.
Keep your eyes open, your head clear, and don't jump into something as serious as a mortgage out of sheer panic or frustration or revenge.
Good luck.
Marsigula? Holy shit, I know her - used to work with her son. If you want, I can tell you where she lives and you can picket her house :)
Risk/regret can go both ways...you could get what you think you want right now (buying the house), only to say in a year: "I could kick myself for buying this just because I felt I was getting screwed."
Can you let yourself off the hook for not buying it before now? It's not being very nice to yourself (it's done), and maybe if you could remove that factor you could see more what you want in your heart, which is where many big, regret-less decisions can often best be made.
Good luck...
I agree with original Anon and cgg, and this is my point: You have definitely NOT thought it through, and you do NOT know what you're doing. You were approved for a $100k loan, but where is the money going to come from to pay for all the repairs you just said the house needs? Where's the money for the lead abatement and repainting going to come from? How about money to replace old appliances, get the electrical wiring inspected and up to code, etc? Here's a clue: people who get $100k bank loans don't buy $100k houses. They buy $60-85k houses and use the rest of the money for repairs. Or they get the seller to pay for repairs. You're not ready to be a homeowner. It's a pipedream and you need to let it go and concentrate on looking for a new place. Stop focusing on the negative "my poor life, poor me" crap and get going.
Epiph-
Check out a rent escrow account if you're really pissed. In my line of work the tennants set them up when they feel their needs haven't been addressed. You pay rent to the court in a separate account, which the landlord will receive when he/she fixes the problem(s). In your case it's a little sticky since you're going on a verbal agreement.
Also, if you want to fight dirty- I used to work for MDE's Lead Paint Posioning Protection Program. I could advise you on how to scare her into thinking you're taking her to the cleaners.
Also, don't let the anonymouses of blog land get you down. If you want that house, fight for it, it's going to be hard to find a better deal.
A quick search in Realtor.com turned up 40 houses in Baltimore for less than $75,000. If it was me, I'd see every damn one of those before I paid $100,000.
I bought mine for $60,000, and if I do say so myself, it's Very Nice! It took another $50K to rehab, but now it's worth three or four times what we paid. The only people in the neighborhood who got better deals than me were 2 teachers who took advantage of those programs for teachers, where they got half off. Take advantage of that while you're a teacher.
To all:
I'm not sure why you're all posting anonymously. I hate that shit. If you've got something to say, at least have the gumption to stand behind your words.
Especially when you have made comments like, "Stop focusing on the negative 'my poor life, poor me' crap and get going."
There's nothing more grating than someone telling me in my blog that I'm being self-pitying. Especially when I haven't been - at all. I'm angry, not self-pitying. And maybe you're right about me not being ready to be a homeowner, but in making those sort of comments on someone's blog (re: you don't actually know me), you'd think you would have the details correct (your "clue" to me was exactly what I was planning on doing - to the letter - and you have no idea how much I've thought this through) in your posting and have the balls to stand behind your comment.
Original anon - I'm sorry you found the comment about my father's loan grating, but I probably just misstated it. It doesn't matter to me if I pay that loan on time because it doesn't affect my credit. That's the only reason. Now that I know it's important to him, I'll pay it on time. It's not a debt that burdens me and there's no problem in paying it back, just remembering to get the check in the mail. Pretty much all mortgages are done online now which is how I would pay mine, so it wouldn't be late. And, actually, my dad has been pushing me to buy this house for a while, saying I've been throwing my money away on rent for too long. And, lastly, you have some details screwed up - my dad didn't bail me out of cc debt; I bailed myself out. by working two jobs for two years. His help had to do with student loans.
Neighbor girl - thanks for not posting anonymously. And, thanks for the vote of confidence. If I could have bought this house for $80K, there probably isn't a better deal anywhere in Baltimore City. Like I said, if I would have done this a year ago, I could have sold it in a year and make the type of profit that could have paid off my student loans. If there's one lesson I've learned by this all, it's that I should jump at buying, not shy away from it.
Tarot: Thanks to you, as well, for not posting anonymously. And the teacher next door program is the next place I'm looking.
Zenchick: As usual, what you say makes sense. I'm not kicking myself too hard for the decision not to buy the house over the last year and a half. Based on the information I had at the time, I made the best decision. I had not idea she would sell it for this cheap and was saving up for it.
Hmm, the house seems like a huge burden to be undertaking when you've just gone through the summer worrying about money. Of course, I'm not sure of your situation. I know that throwing money at rent is probably a bad idea. I hope that if you are able to buy the house, you're able to buy it for 80,000 or 85,000 and not the full 100,000 because just as soon as it is bought things will need to be repaired.
My gut reaction to all of the ado about the house is to believe that there are reasons why you shouldn't be buying the hosue. It is one of those "if it were right, it would be easy" kind of feelings.
At any rate, I hope that it all goes well and that it all works out for the best in the end.
I guess I'm not really being that clear. I'm not buying the house. She won't sell it to me. Now, if I *could* buy the house for $80K, I would do it. And it doesn't really matter what any of you anonymous posters say, that would be an amazing deal on this place, one that would afford me enough money to make the repairs that I need while in fact lowering my monthly bills because the mortgage would be cheaper than the rent. But they want it done yesterday and I just can't do that. Now the decision is what I should do now.
What you should do now?
Buy a place. Not that one - I'm sure you've got an attachment to it, but just because you can't buy that house doesn't mean you shouldn't use this opportunity to buy your own place. You're getting a raw deal, but it sounds like this situation is pushing you to buy your own place, and I think it'll probably work out for the best, one way or the other.
And, like I said, I'll help you move.
Snay:
Thanks for the offer. I'm not ready to picket in front of the Marsiglia residence yet, but we'll see how tomorrow goes. I might call her a lying bitch to her face just to make myself feel better. Nah. Just thinking it and intentionally not looking in her direction when the three of them come will be fine.
If you get desperate and are needing a place to stay temporarily, I'm in the process of fixing up my basement and wouldn't mind a temporary tenant at all. And I'm dog friendly. Regardless, good luck. I've been through similar housing fun and it sucks.
Orig anon -- posting anon because of financial info, and no other reason.
Good luck, again!
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