Monday, September 21, 2009

Rats!

I went for a quick trip out to the house this saturday, coming back sunday.. just to check on things and see if I can get anything done. It was a bit warm, hitting around 90 degrees and for some reason I decided to work on the drip system. OUTSIDE. Sometimes I even amaze myself with the strange decisions I make. The plan was to fix the drip line and then spend the rest of the day inside... so i started working on the line that covers the citrus trees. Tinkered here and there on it and of course there is water going everywhere making all this mud.. on a hill... with trees that have thorns and ants... so i dig some steps into the hill.. in the heat. See? Sometimes i just shake my head at myself. Anyway i would work for 1 hour and then go in for an hour while i drank a gallon of water and go back out. Things were going okay until I turned on the lines that I worked on over labor day weekend. I repaired lots of broken drip emitters.. but there was water shooting up in the air down at the bottom of the hill. Picture of the hill...


Do you ever have those conversations with yourself, or your dog, where you just are not believing what you are seeing? Cuz you know you fixed that line and the time it took to do that? I drug my wheelbarrow down the hill and stared at the leak spot for a second trying to comprehend what I was seeing. My pristine new emitter was there and not broken.. but there was a hole in the small hose that connects to the big one. I bend down and see not a hole but it was chewed clean through by little teeth... Rats had chewed my new lines to get to the water inside. 2 of them were that way.. just when i was thinking i was done i had more repair work to do.. i covered the new lines with stones to hopefully dissuade them varmints next time. 
And while i am going through all this my dog has been roaming around and getting hot and laying under the trees. I call her and she comes prancing down the hill and i see that she is covered in mud.. she was laying in the wet spots that i had been working on before... it was actually kind of funny! She is older and very dainty and feminine for a big dog and to see her side, chest, belly and tail in mud was hysterical. But she was so hot!
A squirt with the hose was not what she had in mind but it cleaned her up... and then a full bath when we got home.
I didn't get any painting done but it was okay... KC and I were "dog" tired and stayed in watching a movie later that night. Trying to balance my time up there with some work and some relaxing.. so it is not all work.

Watching the sunset from that deck is just amazing.. you see all the trees turn colors as the sun hits them just right. One tree off in the distance is the neon green almost and it stands out from the others.. it is so relaxing. And all the animals start "going home" for the night while the night shift animals start coming out. I know i bit off a bit more than I bargained for, but sitting on that deck in the morning with coffee or at sunset with a glass of wine is so worth it...

These next 8 days is the busiest time of the quarter for me so I won't be up there for at least 2 weeks. Next weekend we have an ATV safety class so that should be fun!

julie

Friday, September 18, 2009

No time this week to add to this blog...

i have been sooo busy at work that i have been unable to add to this blog. The computer programs that I work with are possessed and conspiring against me to stop me from watching the fresno state vs. boise state game....
I am leaving tomorrow for the house and will have an update when i get back... supposed to be hot hot hot !

Sunday, September 13, 2009

The art of buying a house- it is all in the preparation!

A lot of people have asked me for advice on how they could buy a house..seems like a popular thing to do. What confuses me is when I ask them some questions, they don't really know the answer and that tells me they to get more prepared.
Before buying a house you have to do some work in the following areas:
1. Finances (duh!)
2. Area research
3. House Condition
4. Mental preparation

Let's start with the basics... before I bought this house in June 2009, I was actually working towards it in late 2007/early 2008. Does that sound crazy? Not really if you understand my thought process and the steps I took to be able to buy a 2nd house if I found the right one. Here is what I did financially although these steps would not necessarily apply to everyone, the basics are the same.

Step#1 - LOWERING MY MONTHLY EXPENSES
I refinanced my current house in early 2008 in preparation to buy a 2nd home. My Moraga house was bought with a conventional loan at a very low interest rate in 2004. I put 20% down when I bought it and my equity had gone up by approximately 15% to 25% more by 2008. But the monthly payments were higher than I could manage if I bought another house so I refinanced into an interest only loan at 5% interest and that lowered my payments by about $400/month. This is not something that everyone should do because there is risk involved but it worked for me. Other things were looking at the recurring monthly bills that I could eliminate like permit parking at BART...and Nick's online games.. these recurring subscriptions that are automatically billed are so easy to ignore. These cuts saved another $100 per month.

Step#2-  BANKING CASH
Every time I sold stock I would put it in an Etrade account so that I would have "cash on hand" to show a potential bank. Banks these days want to see cash reserves to make them feel okay if you lost your job or anything else bad happened. It also shows that you are good enough with your finances to not spend every dime you bring home. It is hard to say what is a good amount to have minimally, you have to have enough to cover the down payment. (This is not to say you will use the money that way, but you need to have it.) If you don't have enough cash in a traditional liquid account, banks will also take into consideration your retirement savings. By adding to your 401k account, besides it being essential to retiring, it could be helpful in buying a house. Automatic deductions are the best way to save... if money goes into my checking account it seems impossible for me to not spend it. Set up automatic deductions through work and make sure the account the money is going to, is not one tied to your everyday checking account.

Step#3 - FINDING MORE FINANCING
I got my HELOC increased in late 2008 anticipating that I would use it to either buy a house for cash or for the down payment. 6 months after I refinanced my primary home loan I went to my bank and got them to increase my HELOC to the max they would loan me. This gave me the money for a down payment for the new house. Timing is critical on these things too. I did things in a very methodical order so as not to give the bank the impression that I might be desperate for cash. The patience you learn here, will pay off later when you need to get that new house financed!

Step#4- KNOW YOUR CREDIT SCORE
With all this bank stuff going on, I knew what my credit score was within 10 points. THIS IS VERY IMPORTANT - especially these days where money is tight that you know what your score is before you call to apply for a loan. Traditional banks don't want to talk to you unless you at least 720 on your FICO score and the higher the better. To keep that up, I kept my credit cards low and made sure to always pay more than I needed to on my loans. My score was high enough to get the bank to pay attention when I called and they always gave me better service (and better rates) than folks who they knew would take a lot of work to get into a loan. Is it fair to base your loan on your FICO score? Probably not. But that is how it works so if your score is lower than 720, get a copy of your credit report and start paying those bills down.
When I went to buy a house the very 1st time, I was shocked to learn that my credit score was really low. Those of you with spouses, or in my case "ex-spouse" need to be aware that credit information is shared. My ex-husband had a credit card that he defaulted on that was not in my name but was on my report. You have to get that stuff off your report right away. I wrote a letter to all 3 reporting agencies to let them know that this was not my account and they needed to remove it. They investigated and removed it and that made a difference. Before applying for a home loan, get your credit report and make sure you know what is in it.
The other shocking thing about your credit score is that goes lower if you don't have enough credit. I had to apply for a credit card and start using it to get my score up back when I bought my first house. I don't recommend store cards or gas cards, just the normal visa and mastercard. I have 3 cards and use 2 of them and never get to more than 25% of my limit and usually I am a lot lower. I feel like 3 cards is the right number and although I don't use one except a couple of times a year to keep it active, I will not close any accounts either. You have to have the right balance of credit that you can use (high limit) and credit you are using (average balance). I don't know exactly where that balance is but I would say if you are looking to get financing for a house, stay below 30%. Before you go to apply for a home loan, pay off your credit cards as much as possible. I got 2 cards to zero balances and the other to just a couple of hundred dollars for the 2 months before I applied for the loan. This is hard to do! But it is worth the effort!

Last Step - KNOW WHAT YOU CAN AFFORD
This sounds silly but it is to keep you out of trouble in the future. For me I knew that I didn't want my mortage on my 2nd house to be more $1000/month and preferrably around $700/month. By using the mortgage calculators on Yahoo and even bank websites you can see the price range of house you should be looking based on what you can afford monthly.
Don't let the amount the bank will loan you become your montly payment by default. Figure it out yourself.. look at all your expenses and what your NET income and see what you have left. If the amount isn't enough to buy the house of your dreams, you have a couple of options:

1. Look at your expenses to see where you can cut back more. You need the basics but basics are different from person to person. I have to have high speed internet and it is costly. But I work from home 1 day a week and can't function without it.

2. Take a bit longer and stash more cash for a bigger downpayment. If you really want to get a house and you can't afford the monthly payment, you can increase your downpayment. No one says you can only put down 20%, if it takes 5% more to get a comfortable monthly payment, take the time to do it.

3. Change your idea of a dream house to something more modest. When I moved to Moraga I was set on buying a single family home. (SFR) But after looking at at least 70 houses and losing bids over and over I started to become more open towards buying a townhouse. It had to have 2 car garage and at least some kind of yard.. that I wouldn't compromise. Once I opened up to that idea I found my current house and was able to buy it and afford it. Sometimes we let society, friends and family dictate more than we think we do. We set our hearts on that SFR with 4 bedrooms and a massive backyard... but is that what you need? Look at the bare minimum of what you need and work up from there. I had to have 2 bedrooms and 2 baths along with the garage and yard. That was the minimum and once I let go of the SFR idea, I found a lot more options available.
Know what you can afford monthly and still eat! Don't let anyone persuade you to over extend yourself financially or the long-term results will be bad.

That's enough for now... Finances are not scary if you attack them a little at a time...

julie

Saturday, September 12, 2009

Rain Lightning Thunder - Oh my!

I am staying in Moraga this weekend and last night was a wild one! We had several bouts of lightning and thunder and sporadic rain... really neat! We usually don't get these kinds of storms and hopefully it won't start any fires. My poor dog hates thunder as do most animals.. she crawled under my bed side table when it started happening. If you have seen her picture here standing next to the ATV, you know she isn't a little dog, weighing around 70lbs, but man she can curl up small! My neighbor has 4 cats and you would think that they would be hiding too. But I just looked outside and 1 of them is on the roof just looking around... we think he is permanently high because he is always so mellow!
I need to get outside and fix a vent that is draining water into the garage.. should be fun! Home projects never seem to stop...

julie

Friday, September 11, 2009

Today still hurts.. 9/11/01 - I will never forget...

Taking a break from the renovation for something much more important.

 Every year it gets less and less raw but today still hurts.. I worked for BEA at the time of the attacks and was a friend of Ed Felt who died on flt 93. He was a brilliant man who actually created the encryption program we used there. After his death the people who knew him placed flowers outside of his office door. And his last voicemail "out of office" message was posted on the internal web site.

http://www.unitedheroes.com/Edward-Felt.html

I remember calling my friend at the time who lived in NJ and asking him what was happening... and hearing him break down because he didn't know if his best friend who worked in WTC had survived.(he did!)

My son was so upset when I cried that he ran around to find me something and brought back a sock.. made me laugh for a second.

My boss had just hired a new sales rep who was attending the conference being held in the Windows on the World restaurant on the top of the WTC. He didn't make it down.

So today, don't take anyone for granted in your life. Don't assume they will be there tomorrow. Make sure the people you care about it know how you feel.

God Bless America and the families/friends/loved ones of the people that died that day..

julie

Tuesday, September 8, 2009

Labor Day Weekend... lot of labor!

Now I know why they call it Labor Day!

Nick and I went up to the house this weekend and starting working Saturday morning. We had a plumber up to fix the shower in his bathroom.. and I totally forgot about my home warranty! oh well....

Nick's job was cutting firewood up and he got about 2 loads done when the chainsaw stopped working. We spent all day Sunday priming and painting on nick's bedroom... all day and we still need another coat of red paint. His room theme is a 1930's style speak easy.. you know dark wood, rich paint etc.. i have a picture here.
I put in the light fixture to replace the one that the water leak had ruined. Worked on the irrigation for the drip system... etc..
Red paint - 1 coat.. curtain hides the sleeping alcove, think old train car
Light fixture


Fun thing was the goats. Our neighbor has these nubian goats who are very friendly. We would go out and feed them carrots and pet them in the afternoon. Now when i stand at the fence corner and yell for them they come running!
Goat getting a pet from Nick
Leader of the goats- these goats have horns no matter what gender
Shy goat
Couple of the babies...


The other fun thing is the ATV.. we got it because dragging stuff up those hills is a little rough. You will see a picture of how steep my driveway is and understand that hauling loads of wood up those hills is just not going to happen.

Nick riding the ATV
Top of the driveway- Casey & Nick

We have this deck off the back that has a great view... Nick loves to bbq and I like to watch the animals
Nick BBQ's on the deck - taking a break from painting
Covered in paint- he is not a neat painter
View #1 from the deck
View #2 from the deck
Can you see the deer by the tree? We have 2 mom's, 3 babies and 1 teenager that visit us.
Also, here are some of the front views of the house.. I am taking all those trees out. (well not me, i am hiring someone to do it!) They all are too close to the roof and 3 are dead or dying.
Oh and if you ever want to keep your camera and cell phone working... don't put them on the top of your car and drive off.... it really messes them up when they get run over.
julie

Friday, September 4, 2009

Pictures of the house when I bought it.

Here are pictures of the house and what it looked like when we bought it.. The living room/dining/kitchen are all connected.
The only appliance that they left was the dishwasher and it didn't work.
Kitchen  and dining room have yellow flower wall paper. The wood stove was removed but it is the divide between the yellow dining and the pink living room....


The wood floors are not levelled but "curled" so some are flat and come are convex and some are concave. And they have gaps between the planks of up to 1/4 inch so it is impossible to clean.
The pink living room walls continue down the hallway to the 1st bathroom... which is robin's egg blue.
Now down the hall is a small spare bedroom in white...
Then we come to the master bedroom which I don't know how to explain. It was added on to after the house was built and they put an space like a family room and office there. And the laundry room as well.. but the only way to get there is through the master bedroom. This is the main reason I think the house didn't sell. Lots of people couldn't see past this horrible remodel and just crazy floorplan.
This is standing at the master bath area and looking into the remodel.
The door to the right goes to the office/laundry room.
then you have the master bath.. open to the room
Lots of work that needs to be done.
And lastly downstairs is a bedroom and full bath that Nick is getting for his bedroom. This is where the water leak happened. That hall bath upstairs had a broken shower valve and that was the leak. It was a slower leak in the walls and then down through the ceiling of the lower bedroom.
I should have known there was a problem because this floor is cement.. all the carpet is torn out.
This does have a walk in shower that is really nice. But the whole room is needing some work.
Well it is Friday night and i am going to get packed and go up there. I hope to get some primer up on the walls at least!
j

Thursday, September 3, 2009

House #4 - When House Dream became House Reality -- or Nightmare?

House #2 in Mokelumne Hill became house #4 when it came back on the market with a new clearing agency and listing broker and a new lower price by $87,000... when the email alert came in to my inbox I was sure there was a mistake. So I called Kathy.. and she looked it up and just kind of gasped and said something about that being a crazy price. So I packed up the kid, his friend and the dog and headed back out to the hills. (My son had just got his driver's permit the day before so I let him drive. That was the longest 2 hour drive of my life!) I looked at it again and even though the floorplan was wacky and it had pink walls I decided to make an offer. I bid a little bit lower than asking and surprisingly.. they accepted it! We were so excited!
 After you have a contract, you have to start working many channels at the same time to get to a closed sale. You have inspections and repairs, financing, insurance requirements and working through anything that might come up that is unexpected. We started down that road and everything was going good.  We got inspections and there was some damages like the septic tank had a crushed D box etc. But the bank was very good and agreed to pay for most of the things that were considered essential to make it habitable. At the same time I was working through the financing. I had approval for a loan from the bank who owns the mortgage on my primary house. They like me.. a lot! I sent all the information requested and waited... and then it hit 2 weeks.. so I started calling. Got lots of answers like we are really busy and we need one more piece of documentation and we have moved to a new office and we are on vacation... on and on.. finally we are within a couple of days of closing. And the title company has nothing in the way of documents yet and I keep getting strange answers to questions.

Two (2) days before closing I get an email that this bank has decided that they don't like the appraisal and they can't go through with the loan.

2 days before closing and just 1 week before I incur a late penalty of $300/day for not closing on time from the selling bank. I was flabbergasted! I talked to everyone at that bank and they all said the same thing, we can't help you. On May 1st, 2009 the rules about appraisals changed dramatically in an effort to stem the pressure that appraisors were getting from banks who wanted a certain value to justify the loan. During the housing boom, this happened a lot because everyone was making money! The rules now are pretty bad:
1. The banks can't contact the appraisor directly but through an "agency". This of course has raised the fees.
2. The appraisor has to use comps that are 6 months or younger.
3. The appraisor has to use comps within a mile of the house for sale.
4. And if the bank doesn't like the appraisal they can't ask for a do-over. That is it, finished, done...

After going through 3 failed deals and finally getting through to almost closing the rug was pulled out from under me... I called Kathy and had to tell her and she was in disbelief as well.  I had to take a day and figure out what I was going to do next. The only options available were to pull out of the deal and lose my deposit money or start the financing over with a new company.

The next day I decided to try it one more time and got hold of the local mortgage broker that Kathy recommended. He knew exactly what had happened to me and told me that he couldn't promise a better outcome but he would try. And he did... in about 2 1/2 weeks we had gotten a new bank, a new appraisal and a new loan. This bank like the appraisal, which was exactly the same, and closed the loan. So on June 16th I had a new house! 5 acres of oak trees, wild turkeys, peacocks, deer and the neighbors goats! All mine!
And when I turned on the water... I had a brand new indoor swimming pool!
In the basement bedroom!
Argh!

Tuesday, September 1, 2009

Step 2 - finding and buying a foreclosure- Easy Right?

After working out the area and the criteria for my house, I started looking with my realtor, Kathy Wilke from Coldwell Banker in Jackson. (email: kathywilke@amadorca.com)
(Kathy gave me permission to use her name and I can't recommend her enough!)

House #1

So in Feb 2009 - after looking a few houses, I made an offer on one that I had seen online and looked at in person. It was listed around $225,000 but it had major water damage. It also had a bathroom that was best described as "hollywood horrible". It had those makeup lights that were about 6 ft long over the mirror and everything was gold and pink. The centerpiece of the bathroom was this enormous jacuzzi tub.. big as an outdoor spa. It had a water heater in the closet just for that tub. I made an offer that I felt was fair and it included the bank fixing the major damage to the house. The bank countered back that they would make the repairs but kept raising the price... it was actually comical. Every new repair quote meant that they would raise the price to me to cover the costs. I don't know why they thought I would go along with that but after a while the lack of reason, and complete disregard for logic got to me. I made my final offer and they declined. I heard that the house went through 2 other offers with the list price going lower and lower. Just heard from Kathy that the house sold at auction finally way way below the original list price and way below what I offered.

House #2
I went to look at the house I would eventually buy Mokelumne Hill. I made an offer and sent it in to the listing agent who was a good friend of my agent. The offer went nowhere because the bank was changing brokers. The offer sat in limbo for weeks and then another person put an offer in as well. When the bank finally got it's act together and contacted me, I decided to pull out and let the other people have it. I was putting an offer on house #3 and felt that it was the better one for me.

House #3
The original house I had spotted online for sale in Wilseyville had fallen through and was back on the market. It had been over 6 months in escrow and didn't close. I went to see it and it was perfect... on the river with a big house and views that were just incredible. It had a mobile home on the property that was just a mess... animal waste and water damage inside. The main house seemed in good shape with just horrific wall paper and overgrown plants. So what was holding this terrific place up from selling? 2 things...  the PGE transformer blew out and burnt up the well pump so no water, and that modular home. I talked to my bank and they said no issue if I can get the pump fixed and the modular home removed. I made an offer and waited and waited. The original listing agent was "offended" at how low my offer was but really, it had been on the market for 9 months with a fallen through escrow and I thought it was a good offer. (I actually thought it was comical, the listing agents reaction. Most realtors want to sell and don't take it personally if you make a low ball offer. She was really hurt! Like it was her house!) Waited some more and found out the bank was changing their broker again! (Kathy was just flabbergasted at this... seems like the banks were just sitting around for an offer for me and then deciding to make a change.)Waited some more and finally things were set up and the bank looked at the offer and guess what? The property had a competing offer for over asking price! I backed out because I hit my upper limit... and went off to lick my wounds.
Wasn't buying a foreclosure supposed to be easy? Weren't the banks trying to just get rid of these properties? The follow up to this property is that this deal fell through as well a couple of months later. Eventually the property did sell but it took months to get the lender to approve the deal because of the modular home.
Who knew that something like that would hold up a deal? The modular home was not the main residence, it had been used as a rental. But banks didn't like it.. no clue as to why.

So now what?


I took a break for a bit because this was getting frustrating for me. I had the cash and the credit to buy a house. I was looking at distressed properties where the bank had lost their shirts and pants. I knew the real estate market and how to "do a deal". I am not a novice or a "lookie loo" but a serious buyer who was willing to put 20% down and close quickly.  I do my research, I know my budget, I have my financing and I don't "waffle", so why couldn't I close a deal?

Here is what I figured out up until this point.. the banks are not emotionally tied to the deal they are just looking at the "bottom line". At house #1- the bank had lost over $200,000 already on just the loan amount. (It was a 100% financing deal for over $400k - 4 years prior.) They knew that the damage was extensive but they were smarting over the loss and didn't want to admit to a complete write off. I was the 1st person who made an offer and so they had hope still... in the end the bank lost almost everything on that property. The damage was just not water damage but septic and well and the estimates to repair everything were around $50,000.
The banks used clearing houses or brokers to manage the sale of the property and those brokers picked the listing agent. They are all different companies and different personalities.. never know what they are thinking. And they change! About every 6 months the agencies and the listing agent can be completely swapped out! You are at their mercy and their time schedule and if you are needing to buy a place quickly because you are moving, you are out of luck. The new broker is usually completely swamped already and now they have to get up to speed on this property that has been dumped on them.
Reason and Logic don't always have anything to do with buying a house. Luck, Patience and good timing seem to be the key.

Next I will detail what I had to go through with the house that I eventually bought... you think this is bad? Wait until you see the ending... :)
Julie