Tag Archives: Real Estate

Diligence Due

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Well, we’ve made it past due diligence and into the last stages of purchase on a house, but it sure was a coin toss for such an important and long awaited decision. I really appreciate fine workmanship. I respect time and old world craftsmanship, absent in the new standards construction and most other features of the house we’ve chosen. The positives are: a nice layout that’s good for short or long-term purposes, a good neighborhood, the right amount of space in mostly useful places and the right schools. It even has a beautiful (possibly solid mahogany) kitchen bar, but the house is covered in hard coat stucco that has cracks, messy old repairs and mismatched colors that show clearly, even in a low light photo.

There are decorator upgrades of personal taste, but widespread overdue maintenance indicating a total fail in the wise allocation of funds. With heavy pet allergens all the carpet will need to come out, and it won’t be fun for us as heavily committed DIYs. The house has potentially Money Pit qualities and it blew me away when due diligence exposed over 36K in unexpected expenses and repairs (those I didn’t allow for in the price), but the seller wouldn’t consider any price adjustment. I’ve had to consider the money I’d flush on 2 or more years renting to make myself move forward on this purchase.

And then there’s comparison to the home I lost. I like brick. It’s low maintenance (if it’s on all 4 sides) like mine was. That brick was straight and square and solid without any settling cracks. The old house had some irritating contractor short cuts. The original plumber had dropped the kitchen ceiling a foot and put the master bath vanity on a wall adjacent to the architect’s plan. I knew it didn’t belong there, and confirmed it when I stripped the wallpaper and saw the builder notes written on the wall underneath. The original plumber saved maybe $40 in copper pipe with these ugly modifications. I spent $5000.00 just getting a certified master plumber to restore the plumbing so I could then return the ceiling and vanity to the original plan. I despise these self centered short sighted short cuts, but the 1979 short cuts in that house were still less offensive than the newer short cuts that I’ll be fixing in this house.

As much as I want to be in a home that fits as many needs and wants as this new purchase, and to get on with normalizing life for my family, a feather could have changed my mind when the seller didn’t make any allowances for the problems exposed on inspection. None. Nada. Whether the seller already knew, or simply didn’t care, I remembered well why didn’t last in real estate.

I was offended, depressed and wrung out when I let the due diligence run out without the price adjustments that condition warranted. It may be the best decision I could make, given what I have to work with, but I rarely pay the wrong price for something and when I do I feel like I’ve been had. But, I was, I am, weary of the suspension of normal life and over ready to be getting on with things.

Friday night between midnight (when the due diligence ran out) and 3am or so when I finally made it to sleep, I was upset enough that I didn’t even want to sit across a closing table from the seller and I didn’t want to move our maple tree to the new yard. There’s a beautiful Tamukeyama weeping red maple that Russ planted in the old yard when we were dating. We’ve talked about moving it. He said it might take an entire weekend, given our equipment and making sure that it would live. It seems a lot of work to move a tree that’s been in the ground for 12 years, but I wanted the tree to move with us because Russ is the person who made me want to grow things again.

The part of this move that I’m struggling to get over is not that it unexpectedly became a seller’s market in my area just before I unexpectedly needed to buy. Life is a crap shoot and you take it as it comes. It’s not that I’m buying a fixer either. I wanted to restore something (if I can actually afford to restore this). I prefer to restore something old, solid and filled with grace. Not something that’s pretty new and only needs restoration because it’s been abused.

What’s bothering me is precisely that I’m tired of people getting away with having others clean up their mess. This seller bought a foreclosure at a fraction of market value, lived in it for over a decade (the decade that included the largest real estate meltdown in history), maintained it poorly and wanted sell for over 2.5 times the original purchase price. Neat trick if you can accomplish it right? Why shouldn’t anyone be happy about the same result?

But, consider this. If I am unable to make the purchase and repairs within the limits of a current market price, then the house isn’t worth what it costs me. If I pay more, I’m giving up future appreciation (that may or may not accrue). I’m giving my future to the seller, a seller who wants the big pay off regardless of having made decisions that don’t lead to that result, and regardless of who’s pocket it comes from. People who want others to pay their tab have always existed, but I think it is a disease, an epidemic drag on the economy and on our spirits that is reaching scarier heights with each passing day.

It’s the disease that killed my marriage. More importantly, it’s a disease that’s killing our country and I don’t think I’m being overly dramatic here. From building contractors to big banking, taxes to TV, environmental waste to drinking water, NIMBY’s to Pork Barrel Politics, people are maximizing small amounts of personal gain at a heavy and sometimes extreme cost to others, the exact opposite of Spock’s Law, rather than “The Needs of the Many Outweigh the Needs of the Few”, the accepted value sometimes seems to be “The wants of the one justify what ever you can get away with”.

It really seems like big business, big politics, big government and their marketing/campaign/”media”/”news” departments have been honing in on and amplifying the lowest common denominator in humanity for long enough to contribute significantly to debasing our society. The evolutionary brain’s survival technique of attempting to minimize effort while maximizing gain was pretty important when the challenge was to get enough calories to last the winter. Granted, it’s still pretty important now that we are living much higher on Maslow’s Hierarchy, but it needs to be channeled and enlightened. It is hard to overcome our baser selves when there are so many signals aimed at getting us to buy on impulse and maximize the rush, borrowing from tomorrow. When tomorrow comes the dopamine is depleted and it’s harder to get satisfaction.

Business, politicians and other entities constantly appeal to self-interest, they’re tapped in to the brain’s reward system and they use competition, salaciousness and tribalism to inflate the response of baser instincts. That makes us short sighted and easy to manipulate when we need take a long view and act with independent, conscientious thought. We need to be evolving in a changed world on crowded globe. Most of us, especially in the United States aren’t trying simply to survive anymore. We can afford ethics and balance, but too many of us have been worrying about how to get the next fix, anything from the newest cell phone, shoes, 3D TV, junk food, Facebook likes, extreme vacation or actual chemical drugs.

I’ve had a week to let my feelings about my new house and this national shedding of responsibility settle. The bigger, chronic problem is more troubling to me than my own personal run in with the latest reminder of the sickness, or even the one before that. I’ve been busy, so it’s been mulling around in the background, thankfully. Thinking about my own personal response to it all.

So, here’s what I’m going to do. I’m going to work on how I feel about the closing. I’m going to commit to this house. I’m going to make it the best I can with the resources I have and while it’s mine it will be maintained properly. I’m going to ask Russ to take that whole weekend and move that tree, out of the back from my old yard and into the front of my new yard. I’m going to combat the disease in my own way, in my own little space. And, if the time comes when I sell this house, I’m going to do my best to make sure it is a value.

A House, A House, My Kingdom for a House

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That’s not exactly how the Bard wrote about King Richard III’s battleground predicament, but I’m feeling a bit of the same dilemma. Trying to find a home has certainly marked a winter of discontent (and rare winter storms). One of Shakespeare’s most misunderstood plays about one of the most controversial English regents seems a good thing to parody while I’m trying hard not to take myself or my situation too seriously.

Normally the decision to move comes at a natural break, a change in life or career that makes moving away or changing your home the natural thing to do. Mine came quietly in the wee hours of the morning with the sound of fire fighters who scarcely woke the neighbors while keeping the fire from spreading to their homes. My guiding change was only abrupt need.

A rush of decisions hit. First there’s triage, then there are bigger decisions. The decision about temporary housing had to be made before the long-term decisions. Conveniently staying near a major junction in interstates had advantages, but wasn’t convenient to the place I eventually decided was most important to find a home and, what turned out to be my primary goal and focus wasn’t anything I had even thought about before the fire. I knew that it would be hard to make decisions about small stuff before I made decisions about the big stuff, yet life moves on and the small decisions happen whether or not the big ones do.

I’m not so far from that time when many people downsize, and let’s face it. When you have just lost the house full of things you spent a lifetime collecting and inheriting, that does seem like a time to downsize. But I haven’t quite made the time when I can do that. My home needs to accommodate all the needs it currently fills. So, the house that fits this year, may not be the house I still want to keep in 3-5 years. I thought I really wanted a short sale or a foreclosure. The savings would help me to make up for the likelihood that I would be in the house for a short time and cancel out some of the extra expenses of a short-term ownership.

It’s a game for the big boys though. I’m looking for a home in Fulton County where those foreclosure auctions on the courthouse steps include the high value homes of Atlanta and its surrounds. Here, even a home that goes for pennies on the dollar can have way too many decimal places for me and even on the homes that do apply to me, the ruthless people who know what they are doing are competing for a decreasing commodity and they could swat me away with their little fingers.

My sweet spot would be getting a house that someone else got on the courthouse steps, but hadn’t remodeled yet. Something that still had room in the price for me to improve it and have a little reward for my work. I went to a meeting for investors who wholesale properties. I thought I might find someone who had a property for me. I wasn’t really comfortable there. There is a kind of respect that people are due and I couldn’t see it at this meeting.

It is true that people have to look out for themselves and their families. How one chooses to do that comes in every color, shape and size. I know a sales person who said “I looked at every sale that another man made as taking food from the mouths of my family.” He was successful, but in spite of how that sounds, he was also compassionate. People find their own ways to keep up the march and it is a struggle.

Some people have appetites that are never sated though. They lack appropriate respect for the resources they use. Some would take anything they can get and try to force a situation to squeeze out even more from people who are desperate and powerless. Do they need the win, the extreme TV or the power vacation? It’s about how ever they define superiority and superiority is not the hole I’m looking to fill.

The truth is that foreclosures are not distressed properties. They are the properties of distressed people and the choice to focus on the inanimate is just a means to help distance humanity. I want the good deal that helps to make up for some of my losses, both in the fire and in the future, but I want it to come from one of those careless people who doesn’t try and brought their trouble on themselves. I want it to come from the person who will never have anything because they go through life irresponsibly. I don’t want it to come from someone who lost their job through no fault of their own, or worse, lost their health. But I won’t get to choose and I may not know until their neighbors become mine. As much as I would like to take care of my own family in the best way possible, to find the best deal, to continue my march and fill our needs, I do understand that what I have been looking for could be heart wrenching if it actually comes my way and the search for any home at market or below continues as I weigh the prices and potential of what is available.

The housing market has changed since I was last paying attention. I’m seeing that trusted resources like Clark Howard recommend renting in the current market if you will be in a house for fewer than 10 years. I don’t like throwing money away on rent, but I’m not happy with my current options and I’m not expecting appreciation to make much headway over the short-term. If money is to be lost, loosing it without the additional risk of short-term market swings could be the lesser evil. Many of the houses that I can purchase have serious condition issues and the prices don’t seem to reflect that. I’ve drifted toward looking at homes that are far outside my budget to be ready if they become short sales, and kicked myself for missing it when a couple of them did. But, there’s no good way to know and my missing it was not through lack of effort.

This has been a winter of discontent, searching and storms, yet, I have still spent much of it grateful for the better than good bits and I continue to trudge through those other bits with faith that something will turn up.