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I made an offer

on a house

I know. I already have one. But...see. Lemme explain.

I've known most of my adulthood that I wanted to retire in Colorado--probably in Colorado Springs. In the last few months, I've been looking for property in the Black Forest area. I was thinking that it might be smart to buy three to five acres, maybe with a well or something, pay off the land while I'm out gallavanting around doing Air Force-y stuff, then have a home custom built when I come back.

My initial forays into that arena, as well as subsequent ones, disabused me of that notion. An unimproved five acres in Black Forest goes for a cool $200,000 right now. That's with no well or septic tank, and possibly not even an access road.

I switched tactics about three months ago. I went to the county assessor's website and began reading through foreclosure lists. The learning curve on foreclosures is rather steep in the beginning, but I was persistant and topped that crest after a few days of study. I learned that houses being offered for a couple of a thousand dollars have been condemned, probably because they were meth labs, and they must be "cleaned" or "purified" by the county. That is, they really aren't worth the pennies you pay, even. I also learned that foreclosures are not, in fact, a free-for-all, despite what you may have learned watching late night television. The bank is bound to recoup a certain amount of cash on the property, and will bid on its own property at auction if need be in order to avoid letting it go for too little.

As I learned these new things, I spotted a fairly promising looking property. It's out in the boonies--Mapquest directions there have "portions unpaved" on the last two or three lines--and has been vacant for some time. While many foreclosed homes are damaged by frustrated and broke former owners, this one appeared to be an exception. It was on the market last summer for $689,000, but the owners owed far less, according to the assessor's records (although their amount might have been a typo; you never know).

The home is custom built. It seems the owners already had the property--basically, they'd done the same thing I was planning to--when they built the house on it. The appear to have spared no expense in the materials. It has a sort of composite siding that's energy efficient and fire-retardent. The decks are Trex. The interior is floored in slate, with hickory cabinets with a gourmet kitchen. It has central vac. In the basement, they installed a proper home theatre and--get this--a swim spa.

This place is amazing.

Well...last spring, the desperate owners tried to short-sell it for $539,000. It didn't move and went into foreclosure.

At about that time, I spent a few days crunching numbers trying to make it work, but I simply couldn't afford it. I decided that if, by some fluke, the bank dropped it to $400,000, I'd do what I could to make it work.

My real estate agent, Sherry Romero (who is AWESOME, y'all), has been watching it for me. Yesterday, the house went on the market.

For $375,000.

The property itself, without the house, is worth more than that.

We were out looking in it (for the first time) after work last night. It is, as I suspected, all that.

I have been in touch with my loan officer (Lisa Lofton, who is also AWESOME), have figured out what I can afford, how high I can go, and made at offer before COB today. I offered asking price, as is.

As the home was foreclosed, I can't know what will happen next or how long this will take, but I'm fairly hopeful that I'll know something soon. The home has sat dormant for about a year, as far as I can tell, and I suspect the bank wants it off their books. It's very far from town and it takes a special breed to want to live that far out in the boonies. Also, it's not designed for a family with children; it's more of a get-away, or a retirement home. It's also a lot of home to heat, which I suspect is off-putting in this time of energy crisis. I'm hoping they take a look at my pre-approved loan and high credit scores and jump at the chance to sell it to someone they know will keep it.

I'll probably rent the one I'm in now, in case you're wondering. It's fairly close to Peterson AFB, so finding a good, steady (and financially solvent) renter should be pretty easy.

I know I'll be tightening the belt a bit with the new place when I leave to do the PhD, but in the long run, it will be SOOOO worth it. This one is an investment unlike any I've ever made before. I fully expect this to be a $1M property in ten years or less.

d

This entry was posted by diana and filed under home.

8 comments

Comment from: auntb'ann [Visitor]  
auntb'ann

WOW, Diana! You seem to have not only done your homework on this one, but have been doing a lot of “foot work” and other things, too. And it isn’t a surprise that something came together for you! You have always been a hard worker, with a good head on your shoulders. Now, to make all of it come together for what sounds like a dream home, I am really impressed! Way to go, girl!!!

08/22/08 @ 21:38
Comment from: [Member]

Thanks! :D

I’m very excited! I’m meeting the loan officer in about 20 minutes to put in the loan application proper. I’ll do whatever I can to make myself seem juicier yet to the bank trying to sell the home.

The first day I called Lisa, I guessed at my investment value and paycheck; she responded that she could finance me with a $1000 rental contingency for the house I’m in now. Apparently, making a bid on a foreclosed property with a contingency is bad wuju, so I spent a little time the next morning figuring out my exact worth. Turns out, I’d lowballed it pretty badly. She called me a couple of hours later to tell me I was good to go without the contingency, which is great news. :)

Yesterday, a friend of mine at work–a lieutenant colonel, two pay grades higher than mine–was explaining to some other friends why I (a mere captain) could afford a home like this: “Because Diana is cheap.”

I said, “Damn right.”

Heh. That’s exactly it.

So now I’m a bit nervous about the change in investment planning, but excited, too.

Gotta run! Love you!

d

08/23/08 @ 12:10
Comment from: Hinermad [Visitor]
Hinermad

Diana,

Congratulations on finding such a great deal! It sounds like the perfect place to hide when the world gets to be a bit much.

By the way, last week my co-worker heard a couple of us old timers talking about the Cold War and Cheyenne Mountain. It turns out he and his wife honeymooned in Colorado Springs about 3 years ago and managed to get a couple of pictures with the mountain in the background. We’ve been teasing him about NORAD finding out and having the FBI haul him in for interrogation.

It’s lots of fun. National security doesn’t always have to be boring.

Dave

08/24/08 @ 07:48
Comment from: [Member]

And…I got it. At asking price and 6.5%.

I can’t believe they moved that quickly. I’ve been told banks (bureaucracies) that own houses take their sweet time, and that a couple of months is nothing to wait.

Assuming the inspection checks out, I should be there before the snow flies. :)

d

08/30/08 @ 07:52
Comment from: Hinermad [Visitor]
Hinermad

Diana,

Desperate times call for desperate measures. That’s a lot of house for the bank to be holding in a soft market. Congratulations! Does this mean you’ll be suspending work on your existing digs?

Dave

08/30/08 @ 08:18
Comment from: [Member]

Good morning, Dave! :)

The corpulent lady has not yet sung, of course. I need to dewinterize it and call all the inspectors out. There are still possible deal-breakers, but I’ll know within ten days of the bank signing the paperwork I signed last night (which I expect to happen Tuesday). I admit also having extreme difficulty in reducing the amount of money I regularly toss into mutual funds (as if this house itself isn’t an investment! Sheesh) so I can handle both payments in a worst-case scenario (of course, I will be renting the current place as soon as possible).

I’ll still be having a deck installed at the current place, and I plan a nice (maintenance-free) one even though it will cost more. This’ll cut down on my problems while renting it and make it easier to sell. Other than that, I never got around to retiling the master bath (life keeps interfering, for some reason), so I’ll regrout it instead, a process I’m already familiar with. My realtor and soon-to-be rental agent for this home is getting specs on rental prices for comparable homes already.

I got lucky in every sense on the new place. Is it just me, or did this happen quicker than you can spit? The place has been foreclosed and is bank-owned, and such properties–according to everyone I’ve spoken with–normally require several weeks to get even an initial bank response for. The selling agent listed this house as “under contract–showing” as soon as I offered exactly what he’d requested, heading off any eminent bidding war. I have reason to believe the owning bank has no idea how many offers he had for the place.

I’m not complaining, of course. Lady luck is smiling on me. I just hope she sticks around long enough to ensure the septic tank is healthy, and “little” stuff like that.

d

08/30/08 @ 10:22
Comment from: hinermad [Visitor]
hinermad

Diana,

You need a septic tank? I thought that’s what Kansas was for. Stuff rolls downhill, as they say. (Grin)

I can understand wanting to keep up contributions to your nest egg. It’d be a shame to starve to death in a mansion. The house might be an investment, but from the way you talk about it I gather you actually plan to live in it. That doesn’t put beans on the table.

But luck has always followed you - maybe kicking and screaming sometimes, but you seem to come out ahead anyway. I think you’ll do fine.

Dave

08/30/08 @ 11:10
Comment from: [Member]

Thanks, Dave. You always find the perfect thing to say. How do you do it?

I won’t be starving. Worry not. I’ll have the occasional chunk of ham in my beans. :)

And yes…I view the home as a retirement plan. It’s distant enough from the rat race to feel like a vacation, but close enough to amenities and hospitals to be a good choice for retirement living.

And oddly, I am lucky. Not in all things, but…in the crucial things. What more could I possibly ask for?

I’ll, of course, keep y’all updated.

d

08/30/08 @ 21:53


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