True Stories From a First Time Homebuyer
Our first round of house hunting was incredibly disheartening. Houses that were smaller than our apartment were going for $100,000+. Then we found a realtor who was on our side. We were determined not to spend more than 80k on a house and we preferred not to spend over 70k. Most realtors laughed at us. She said it was absolutely doable.
We decided to look solely for condos. We looked at TONS of them. Some were glorified apartments, some were too much condo…then one day we found a foreclosed condo. Foreclosed condos are a risk, but this one was sound. All of the pipes were in tact. It needed all new appliances, new paint and new flooring. But we’re young and we were up for the challenge. So, we put in a bid. They accepted an offer of 68k. The house is worth 90k and the houses in the neighborhood are selling for 96k and up. Even our realtor (who flips houses on the side) was excited and she was thinking about buying a foreclosure in the area. There were a lot of them. Between the old HOA and the mortgage crisis, there have been TONS of foreclosures in the area.
What I learned from house hunting:
1) Look at EVERYTHING. Seriously. Everything.
2) Don’t settle. This is your house we’re talking about here. You’re going to live there for years. Don’t pick something you sort of like. Pick something you love.
3) Don’t be afraid of a challenge. If we had been worried about all the work, we would have gotten the condo we both liked. Instead of the condo we both loved. It’s been a ton of work and a headache at times, but as the work gets done and we start to see the changes, we’re falling more in love. Plus, we know every inch of that condo and it is truly ours.
4) Find a realtor you get along with, who will work with you and for you, who is always available (or at least reasonably available) and who is working for your interests.
So…we have to get a mortgage now. At this point I’ve only had my job for a month. My fiance freelances and prior to that he ran a production company that, due mostly to his partners, did not do well. So while his credit was excellent, he didn’t have tax returns and we couldn’t prove employment. So, I was on my own. My mom agreed to co-sign, but the mortgage broker said I could do it on my own. We went with Bank of America because they have a no closing costs. That was a nightmare in and of itself. The mortgage broker has lousy communication skills. One day she’d tell me she needed this document, the next day she wouldn’t need that one. Plus my w-2’s from last year-when I was a full-time student with a few part-time jobs- were all in Pennsylvania with my parents. Finally that was done and we had our mortgage. It was a low monthly payment with a low interest rate. We were pleased with that.
What I learned from getting my first mortgage:
1) STUDY. I majored in journalism. A lot of people major in journalism because they love writing and hate math. I didn’t know ANYTHING about mortgages. Interest rates meant nothing, I didn’t know what it meant to escrow, I literally knew NOTHING. I used various web sites to figure out what I needed to know. I still only have a slight grasp on mortgages, but I know enough.
2) Ask questions. This kind of goes with studying. What’s that change for? Why do you have to pay that much? What’s the point of this? You have the right to know. So, find out.
3) Have all your information ready. Otherwise it gets even more irritating…really quickly.
We closed on the house, got the keys and walked into our house for the first time. It was exciting and overwhelming. We closed on October 17th and we had to be out of our apartment on Oct. 31st. So we wasted no time in finding a contractor and we had to start looking into financing almost immediately. My fiance handled the contractor (he has better negotiating skills) and I handled finances (I can prove my income).
At first we tried to get a home equity loan. Unfortunately, we had barely had the house for a month. We were told that the house would be appraised based on the tax value, not the sales price. Turns out that was a lie, pretty much everywhere was going on the sales price. Then we tried for a personal loan. As of late November, I am still attempting to get some sort of loan. In the meantime we’ve been paying for everything out of pocket. We need some sort of financing soon so we can pay ourselves back. My mom has been enlisted to help us get some sort of loan.
What I’m learning about loans:
1) It’s frustrating. Period.
2) The fact that the more they check your credit the lower it gets is really irritating and makes no sense.
3) Just keep trying. Someday, someone will throw you a bone.
Hiring contractors has been a whole other mess. First we hired a man who talked a big game. He could tile, do laminate and carpet. We needed all three things. He kept talking about all the experience he had and the he “was willing to go the extra mile for his clients.” He was, in a word, full of it…okay in three words. He put down the laminate and did the tile. He hired someone else to do the carpeting. He kept making mistakes and doing poor work. Actually, he wasn’t doing poor work-his neighbor (who had never really done any contracting work and “wanted to try something new”) and another kid were the ones doing poor work. My fiance kept pointing out his mistakes and he kept saying he’d fix them. He never did.
The final straw was the carpeting. He left down the old padding-which was full of dust, mold and remnants of the work we’d done on the house. We asked him to rip it up. He said he would have the carpeting people put the new padding over it, so we would have double padding. We said we didn’t want that, he never ripped it up. The carpet was put down and it looks quite good. We also asked him to try to fix some loud squeaks in the stairs and in our room by putting a screw or nail into it. He told us that they spent hours doing it and it didn’t work. We didn’t believe him and we could feel that there was no new padding. He kept saying there was padding. Finally, we called the people who installed it. No padding was ordered, thus no padding was installed. They did not attempt to fix any squeaks. And they did not vacuum the padding (like the contractor said they would). When we brought the contractor in to point out what we weren’t happy with and to fire him, we asked about a threshold into the bathroom. He said that they could put a THIRD carpet pad down…that was the opening we were looking for. We said that they’d called and that there was no new padding. He stammered for a bit and said he called and he paid extra for the padding and he’d have to call them and straighten that out. Then he said that he would visit. He was clearly caught. We fired him and he stormed out of the house without saying a word and gave us the finger as he drove away. Also, the carpeting people charged him $1000 and he charged us about $1200.
So, we hired another contractor to fix his mistakes. This contractor seemed much more professional. He said he could do it for $500 and that he needed half of the payment up front as good faith. He was slated to come Saturday. He never called. We have a working doorbell and he opted not to ring it at 10 a.m. when we were upstairs at the other end of the house asleep. Instead he tapped on the door. We went out to find the tile he needed. In the meantime he pulled out some shoe molding, took some tiles home to cut them and said he fixed a laminate piece (he didn’t). He left a note saying he might be back Wednesday (no time frame). My fiance called a few times and we never heard back. The next time we heard from him was Wednesday when he said that no one answered and he would be canceling the job. He said we were even ($250 for stealing tiles and pulling out shoe molding? Yeah right) and even said, “Hasta la vista.”
Now…for the repercussions. We called and e-mailed the second contractor saying that there was nothing in the contract saying that after two no-shows he would cancel. We pointed out that he could call to cancel the job, but couldn’t call to be let into the house (what’s up with that?). We asked that he return the tiles and said that we were not even and he could either do the work or return the $250. He e-mailed us back an invoice (no joke). The invoice was for more than the amount on the contract that we had signed-this is illegal. We said we would not pay that and that it was illegal for him to charge more than the contract. He responded with an e-mail saying that “we were in our own world” and asking, “How many drugs are you guys on? Are they the drugs that I inadvertently took a picture of with my digital camera?” then saying that, “If you want to play hardball, we can play hardball, dawg.” Let me make this abundantly clear: we do not do drugs. If this picture exists, the only thing it could be is a picture of my legally prescribed medications. So far we have larceny (he hasn’t returned the tiles), extortion and invasion of privacy. Plus, the contract says that he would handle himself in a professional manner. Accusing us of drug use isn’t what I’d call professional. We did not respond to this e-mail. We will let the police respond to it. Then we will let the judge in small claims court respond to it.
Later we received a certified letter from the first contractor. He sent us a bill-also for more than the contract we signed (still illegal). He said that if we did not pay it within 30 days he would seek payment legally. We noticed that the only payment that didn’t go up from the original contract was the carpeting…funny how that works. He also said in the letter that we had no right to contact his vendors, that it was a breach of contract and that he would have answered any questions. We asked several times about the padding. What he means is that he wasn’t supposed to get caught. Also, we had to purchase extra boxes of laminate, they were $25/box. According to his price they would have been around $45-50/box. We have not responded to the letter. We will allow the small claims judge to respond to it, along with the contract and photos of his work.
In the meantime, we have not been able to find a contractor to fix the floor. We have had at least $1300 stolen by contractors. The second contractor mused that our drug use is the reason our house is taking so long…it’s actually that sleazy contractors are stealing our money. We do not have appliances because the tile in our kitchen is unfinished and dreadfully uneven.
What I’ve learned about contractors:
1) Ask for references and call them. Make sure they don’t have the same last name as the contractor. If possible, get people from your friends.
2) Ask for a portfolio and a resume…and a copy of their license (both contractors lied to us about being licensed).
3) Seriously, monitor their work. It may make them uncomfortable, but who cares.
4) Pay nothing up front. If they demand a “good faith payment” then find someone else.
5) If they are buying materials, ask for invoices and receipts.
6) Sign a contract before all work is done.
7) If you do end up in small claims court, bring more evidence than you could possibly need. Photos, e-mails, recordings of voicemails, written statements, a copy of the contract…anything you can think of.
8) Home depot has a rolodex of contractors…use it.
9) Use resources offered by the state licensing board. See if there have been any complaints filed against this person.
10) This is your house and your money. Do everything within your power to make sure it is done right.
We’re still in the midst of all of this. Our goal is to get the house finished by the first of the year. That means the flooring fixed, appliances installed, painting, boxes unpacked, furniture in, a dog…everything.
Good luck to all other first-time homebuyers. Try not to run into the same problems that I did.