We almost bought a new house. A 3 level, 3600 sqft, 6 bed, 4 bath house with a 3 car garage in a beautiful neighborhood on a hill. We were drawn to this house because it has two full living spaces so we could rent out the lower level. In fact, if we had a paying renter in the lower level, we would be able to pay less per month living here than in our current home that’s half the size (of the part of the house we would be living in. A third the size of this entire house).
We saw the house when it was first posted but we didn’t look further because the price was $699K…. Two months later is was dropped to $675K… Then a couple weeks later repriced to $655K… We submitted an offer for $630K and since we were the only offer (ha!) they countered with $650K, we countered with $638K and they accepted. Normally we wouldn’t be interested in purchasing such an expensive home, but the rental option changes the overall financial impact.
When you’re making a huge purchase (ex: house) it’s hard to know where to draw the line in the sand. Does an extra $5K really make that big of a difference? We decided we would only offer what we could within the conventional loan limits since we didn’t want to use a jumbo loan. We made this distinction clear in our counter offer and I think it helped the sellers decide to accept the $638K offer when clearly they were looking for more.
Entry + Living Room + Dining
We knew going into the inspection that the roof needed to be replaced (30 year old shake roof that hadn’t been maintained… Minimum $25K to replace. We got several quotes.) but we had no idea the sewer line would be in bad shape. Turned out the sewer pipes had sunken a bit so there was standing water in the pipes. Since the pipes run along the concrete stairs (down the left side of the house), the fix would require 9 concrete stairs to be removed, pipe repair, and concrete stair replacement. The estimated cost is several thousand dollars. Maybe even as high as $10K. That’s assuming everything goes smoothly and nothing else is damaged in the remediation process. Also, the gutters were shot. Rusty holes leaking in multiple places and everything. That’ll be another $8K. The roof and gutter prices are higher than other houses this size because this house is on a scary steep hill and requires extra measures to do exterior work safely.
We agreed with the seller to extend the inspection period because there were a lot of repairs to negotiate pricing reduction/credits on. We asked for everything to be repaired by the seller and I don’t think they liked that…(understandably so) but we had to start strong with a situation this bad! 2 days before the end of our extended inspection period my manager said, “I can only guarantee your job for 2 more weeks.”
Even though we had already paid for all the inspections, we decided to walk away from the house. Not only was my job unsure at the time, the rest of the world was too.
During the house search, the epidemic Covid-19 was growing and one known way it spreads quickly is when large groups of people get together. Since I worked at an event agency that specialized in huge events (often tens of thousands of attendees), they quickly started to lose business. Ninety percent of their event contracts cancelled within 2 weeks. The remaining contracts fell through shortly after. Those who postponed their events eventually canceled and those who decided to turn their event virtual also canceled. It turns out you have to get several dozen people together to produce a virtual event. Summary: No more work for the agency. No more work for me.
Kitchen + Family Room
Now that it’s been over a month, the epidemic has become a global pandemic and everyone has been asked to stay home as much as possible. We’re glad we decided to walk away from this house because we are now able to weather the current unpredictable world in a financially comfortable state. If we would have purchased this house we would have put everything we had into the downpayment (because we want to keep our current home as a rental). And we would still have to wait to save up to pay for the much needed repairs. We had a solid, realistic plan to complete everything, but it felt like unnecessary stress to try to make it all work when we had no idea what the future held for the entire country.
Master Bedroom + Bath
ALSO, during this process interest rates dropped to an all-time low in an attempt to help the economy that seemed like it was about to suffer. We tried to refinance our current house but we couldn’t since we were in contract with another home… Hopefully we’ll be able to do that soon now that we’re contract free.
Even though we feel at peace about our decision, we are bummed about not living in this beautiful house and about losing the big exciting life change we planned and prepared for. This was the first of several disappointments that came as a result of world changes caused by the pandemic. We feel so blessed to be healthy and safe during this time, but we’re still bummed about losing the experiences we were looking forward to.
Kids Bedroom + Bath
Lower Level Rental
Backyard
Our house search continues. And now finding a more usable back yard is a higher priority! This house has no grass in the back, just deck and concrete. Here’s to hoping the world gets a vaccine and we find a better house option soon!
Side note: After we backed out, this house went pending 3 different times before it actually sold. Final sale price = $638K. Our exact offer. Our realtor thought for sure they wouldn’t accept at that price but they did. Twice : )
