Jul 24 2011

We’re under contract on a house

We saw a house on Thursday, wrote an offer for it on Friday, and came to an agreement on Saturday. WHAT.

It’s a two-story.

We have been looking at two-stories during the latter weeks of our search. We have been through a lot of open houses mostly to check out floor plans and flow to see what we thought, and also had some private tours of a few. I think I came to the conclusion that if it had other features I wanted and a layout that I liked, I could enjoy a two-story house.

The one we are trying to buy has been for sale for a few months, but had a price drop last week and that’s when it really caught our attention. I remember seeing it before in online listings and thinking it looked nice, but it was priced too high for us. And then the price drop (which wasn’t THAT much, I suppose) but it made it enough to think we should at least check it out.

Other people must have had the same thought, because when we were writing our offer, we discovered there was another offer already submitted on the house. The listing agent told our agent that as soon as she called, so I don’t think he was making that up.

They hadn’t yet done anything with it, and once they knew another offer was in the works they probably decided to wait and see what we’d do.

We got to work and put together what we believed to be a fair offer, based on comparables and the market.

The sellers had already reduced their price by about 4.6% of their original price. We were asking them to go even lower, and to include some things that weren’t originally included in the sale, such as their washer & dryer and their gas grill.

Our offer included all other kitchen appliances and all window treatments and things like that. We asked they they pay for a home warranty and pay a portion of the closing costs.

We picked a closing date, but told them that we could be flexible.

Our offer letter let them know we would be seeking a conventional loan and would be putting 20% down, and we attached our pre-approval letter so they could know we could get that loan.

When we toured the house, the seller left a letter in the kitchen detailing things they loved about the house and the neighborhood and explained they were relocating for work. Since she wrote a letter to us, I decided to write a letter back to them to include with our offer — especially since there was another offer already.

I don’t know that my letter helped any, but it doesn’t seem like it hurt.

The listing agent told our agent that the sellers wanted to work with us first because we were going for a conventional loan with a larger down payment than the others, who were trying for a FHA. I just wonder if our starting price was perhaps a little higher. Possibly.

Either way, they did counter our offer and it was decent. I was able to see in the MLS info how much they paid, and that they also have an FHA loan and received some closing cost assistance. Guessing at what FHA rates were in March 2009, and assuming they put 3.5% down, it didn’t seem like they had much equity at all. In fact, if my guesstimates were true, they’d have to bring cash to closing to cover the remaining expenses on their mortgage and to pay the realtor. Yikes.

Since it didn’t seem like they really had much room on price (and really, we thought it was a fair price anyway) we made an addendum to ask them to include the patio furniture and their lawnmower. They agreed, and we had a deal.

The current sale price is now the lowest amount that anyone has ever paid for the house. We will be the fifth owners. The original sale price back in 2000 when the house was built was just a few hundred dollars more than what our current contract price is. It sold for quite a bit more a few years later, then dropped down a tad for the third sale in 2007, and a little more for the fourth sale in 2009.

I hope the house will grow in value and that it’s not on a downward trend. I think it’s just a victim of the market conditions. It’s on the lower end of the price range in the neighborhood and it’s in a nice area so I think we should be ok in that respect.

Now we just have to lock in our interest rate (we have a meeting on Monday with our lender to do this) and schedule the inspections and all the other stuff that needs to happen first.

We have a number of opportunities to get out of the contract if we need to, say if the house doesn’t pass inspection to our satisfaction, or if we review the neighborhood HOAs and decide we don’t like them, or if something bizarre happens and we can’t obtain financing.

Here’s hoping it’ll go through!


11 Responses to “We’re under contract on a house”

  1. So exciting! Out of curiosity and nothing else, I’m interested in what the HOA is like.

  2. YAY! So glad you’ve found something that will work for you! Praying the rest of the process is smooth!

  3. Congratulations – I understand what it is like to look and look and then finally everything falls together on the right house.

  4. How awesome! Sounds like you’ve been wise in your actions! Good for you!

    Hope the whole HOA goes well. Be sure to read the fine print! My mom’s HOA has been good…no major issues in over 7 years. They did (I say did because they have since changed) have rules about colors, door styles, window styles and things like that…but all in all pretty basic stuff. Just be sure to read it over well.

    How soon could you be moving in? So exciting!

  5. Congrats!!! It’s so exciting to finally get a contract in. Hope everything works out perfectly for you! :)

  6. Definitely look closely into the HOA. That’s a good part of why we’re moving, a horrible HOA! I refuse to live in a neighborhood with an HOA ever again. But we’re in the deep south, where HOAs pretty much control everything.

    Good luck with the loan process! Started ours two weeks ago, hopefully we get the yes or no this week.

    What’s your opinion on the preapproval/approval process? I wish you could get officially approved before putting in an offer, it would save so much stress I think. Seems like a very backwards system.

  7. Congratulations! Can’t wait to see pictures!

  8. Congratulations! I hope the process is as smooth and as headache free as possible for home purchasing! :)

  9. Go to the indy realtors board web site (I can’t come up with the correct name at the moment) it should tell you if there is an offer pending unless it was after COB the day before.

  10. Kacie! That’s great news. Good luck, will pray for smooth sailing the rest of the way. Can’t wait to hear more about it! Which area is it in? xo

  11. MIBOR? It is still showing up as active on there. I’m going to ask my agent what’s going on.

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Hey! I'm Kacie, wife to Shane and mother to Jonathan (7), Vivienne (5) and Amelia (2) . I write about my family's finance: how we save money, improve our spending, and plan for the future.

I hope I can inspire and encourage you to improve your situation. See disclosure.

I'm adopting a much slower-paced posting schedule, and treating this as a hobby blog now.

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