They say it’s a buyer’s housing market out there. The interest rates are low, the prices are low, there’s excess inventory on the market, and if we would only get our lazy selves up off the couch we could have a house of our own for a relative steal. There’s a reason why my participation in Parrot has been declining in recent months, and it has nothing to do with the project itself. In short, I’m stuck in homebuyer hell and that’s eating up a lot of my free time.

My wife and I have been hunting for houses, more or less actively, for three years. You’ll notice that we started hunting before the housing bubble burst and before our son was born. Also, I was working a different job at the time, many miles away from where I work now. The area we were looking to buy in three years ago would have created unnecessarily difficult commutes for us today and would very like have left us underwater, saddled with a mortgage balance much higher than the current value of our home. In hind sight it was amazingly serendipitous that we failed to buy a house at the time, but we were plenty frustrated by what we were seeing. Houses, even old and decaying ones, were prohibitively priced. Financing was readily available, but simple back-of-the-envelope calculations showed that the loans for which we were pre-approved to borrow were so enormous that we would have been unable to keep up with payments. Top off mortgage payments which we would have struggled to pay normally with the maintenance burden of the aging homes in the area, and so many houses we should have been able to live comfortably in were completely unfeasable for us. Banks were readily, and without hesitation, approving us to borrow more money than we could afford to repay. It’s only through a certain amount of self restraint and double-checking the numbers that we avoided the worst possible outcome. It’s amazing to think that, at the time, actually buying a house would have been a disaster for us.

Now, the disaster is that we cannot buy a house. Try as we might, and we have been trying, we can’t seem to get a deal closed. After I got my new job we picked a different area to start hunting for houses. This new town was much closer to my wife’s employeer, had easy access to trains so I could get into the city, good daycare choices, and was where my wife’s parents lived.

We found a house that we liked and put in an offer. It was an estate sale. The house was about 50 years old and very original, but in emaculate condition. While it had never been significantly updated or upgraded, it was very well maintained and was set up on a particular piece of geography in such a way that damage from water was minimized over time and that threats from insects were decreased. We put in a very fair offer. I don’t remember exactly, but I think our original offer was around 190K. The sellers countered that they wanted to get at least 195K and while we thought that was a little bit generous, it was well within our budget and we agreed. the offer was accepted and we started moving forward with the process. We hired a home inspector to come out and inspect the place. Again, besides some of the issues with dating and obsolescence, the house was in great condition. We got an appraiser to come out and look at the house. Lo and behold, the house appraised for 190K, the amount of our initial offer.

I’ve said we’ve been looking at houses for three years now, didn’t I? We’ve developed something of an extraordinary sense for the value of homes in south eastern PA. If we think the house is not worth 195K, there’s a pretty good chance that it isn’t.

By that time we had already put in notice with our apartment complex that we were leaving our lease early. We paid our early termination fees, rented a storage locker to hold our furniture, and moved in with my parents-in-law for the last few days before settlement. We expected to be there for less than a week, maybe 2 weeks at the most.

That was when things started to fall apart. The sellers refused to lower their asking price despite the fact that the house did not appraise for what they wanted. We sought to have the appraisal redone, to try and get the house viewed in a more generous light. The new appraisal did come back at 195K, but the mortgage lender, much more averse to risk than they had been in years past, refused to appove the new appraisal and refused to lend us an amount higher than what the house was perceived to be worth (190K). Meanwhile, we had just spent about 2K in fees and penalties getting out of our apartment lease early (including moving truck rental, storage locker, lost security deposit because my kid loves spilling food on the white carpets, etc) and had just spent about a thousand dollars inspecting and appraising the new house. In short, while we did have money in savings, we didn’t have enough to cover both the five thousand dollar mortgage shortfall and the additional closing costs and move-in expenses that we would have needed to make the deal work.

We asked the sellers one last time to come down, they refused, and we were forced to walk away from the deal. It was a Sunday morning when we made the last phone call. We ate breakfast, got dressed, and went right out that afternoon to go looking at open houses. We also, for a variety of unrelated reasons, got a new realtor.

We heard later that the house was re-listed at 205K, 15K higher than the house appraised for. Since the appraisal sticks with the house for a few months, and since other buyers aren’t going to want to buy a house for more money than it is worth, I expect that this house will still be on the market for quite a long time. What upsets me most about the deal was that I spent about a thousand dollars on an inspection for the house and an appraisal for the house, both of which were made available to the home owners at no cost to them. I paid that money out of my own pocket, for a house that the sellers apparently had no reasonable interest in selling. If that doesn’t leave an acidic taste in your mouth, nothing will.

We found another house that we liked. Actually it was attached to a bit of a sad story. A young guy had bought this little house and was renovating it, but he died. His mother, now supporting her own house and the one left over from her son, put them both on the market. The idea, I suppose, is whichever one didn’t sell is where she would live. They were both nice houses and we saw both of them that day.

We put in an offer on the son’s house. Again, we put in what we thought was a fair market offer for the price. I think it was around 180K because this house, while partially renovated, was much smaller than the previous one. We put in the offer, signed all the paperwork, and waited. And waited. A nail-biting week later, we got back the unexpected reply: The mother decided her emotional attachment to the house was too strong and she had decided against selling it. She was going to keep the son’s house as a rental property.

Still undaunted, we went back out again the very next weekend looking at more houses. We were seeing about 5-10 open houses per weekend on our own, and our realtor was taking us out to see at least that many during the week in the evenings after work. We saw all sorts of houses, but we were running into a very common problem: So many houses were over-valued. Some of them were priced so high as to be comically depressing. I’m not against negotiating a price down to something more reasonable, but a homeowner who is off the mark by a huge amount is not likely to negotiate down. We were seeing houses on the market listed for 50K and even 100K more than they were worth, and these houses had (unsurprisingly) sat unsold for many weeks and even months. No seller is going to accept an offer for 30% less than the asking price and frankly, I would have been embarrased to make such an offer anyway.

Let me set the stage here. The area where we are primarily looking to buy a house is Levittown PA. Levittown is a planned community, with exactly 6 styles of houses, all of which were built between 1952 and 1958. What I’m trying to say with all this is that Levitown houses, at their core, don’t have a lot of variation. What you end up seeing is the same house over and over again, some with renovations, some with significant expansions. Some have been well-maintained and cared for, some have been allowed to slide into decay. Depending on the house model, and the specific township and school district where the house is located, prices for decent 2-4 bedroom houses can be anywhere from about 180K to 300K. Houses can go a little lower than that range if they are in particularly bad condition and need massive rehabilitation, and the houses at the high end of that range tend to be the ones which have been expanded beyond all recognition. The vast majority of houses that we were seeing were in the range of 190K to 230K, which we felt was a very comfortable budget for us.

What’s funny is that because of the realtor practice of using “comparables”, you’ll have two houses for sale on the same street, of the same style, at nearly the same price, of radically different qualities. One day we went out to see a house in gorgeous condition, with a renovated kitchen, new oil heater, new energy efficient windows throughout including the addition of two new dormered windows upstails and an expanded bathroom. Then we went across town to see a house of the exact same style, foreclosed and abandoned, in deplorable condition, for 5 thousand dollars more.

What’s also funny, though in a more depressing way, is that so many homes are priced based on what the sellers owe on the house, not what the house is reasonably worth. I’m empathetic towards people who are stuck in a tight financial situation, but I’m not prepared to pay the difference out of my own pocket.

We went out and found another house we liked. It was small but well-renovated and reasonably priced. It was listed at 195K but we thought that, considering the size of the house and the neighborhood, it might not be worth so much. What we absolutely didn’t want to do was agree to a number which we knew to be too high, pay out of pocket for an appraisal, and be told that we were right and we’re out the money. We put in our offer like this: We offered 190K on the house, asked for a few percent back in seller-assist to help cover closing costs, and add in a clause that if the appraisal came back low the sellers would either be able to lower their asking price or pay for the appraisal. Considering our experience with the first house, we figured this was a reasonable thing to ask for. After all, we shouldn’t have to pay money to be told that the sellers were being unreasonable and asking for more money than we would be able to mortgage. I’m not running a free appraisal service, to pay to appraise houses for people who have no honest intention to sell.

The sellers countered: They countered 205K, plus the same percentage of assist and without the appraisal clause. Again, we knew (our intuition for this has been improving radically, with practice) that it would never appraise for so much. Basically, they counter-offered higher than the original list price of the house, and were asking for far more money than the house was worth. No big deal. I reasoned that these people were just being greedy, unreasonable assholes and there was no sense doing business with them. Plus, if they’re being this stupid so early, can you imagine going through the whole hassle of the house-buying process with them? So we told the realtor to cancel the offer. However, before I could put stamps on the brown paper bag with dog shit inside and mail it to them, we go another call. It turns out the sellers were under water, owed more on the house than it was worth, and 205K-plus-assist was the magic number for them to break even. Suddenly they seemed a little bit more reasonable (still, why was it listed so low originally?), but the house was still not right for us at that price, so we decided to walk away from it.

Then we got another call. The realtor said that if we wanted to stick with our original offer, which she agreed was spot-on for the value of the house, we could try to do a short sale through the bank. Since we didn’t have anything else lined up, we decided to follow that option and continue down the rabbit hole. That process dragged on for several more weeks, during which time we continued looking at more houses. We didn’t find any that we liked enough to put offers on, but we were less stressed because the short-sale was developing in the background. It was like a Plan B safety net that really helped us stay at ease because we knew it was moving along, albeit very slowly.

Several weeks later we got a call from the realtor, who had just spoken with the bank. It turns out that the bank denied the short sale. The options we had were to come up with 15K to cover the shortfall of the sellers, counter and hope that they accept a reasonable offer even if that meant they walked away with a net loss, or walk away from it ourselves. A few days ago, we decided to just walk away from it.

Back at square one now, our realtor who “had never seen anything like this before” decided that we were her mission in life. She was going to get us into a house and goddamn she was going to do it before christmas. Good luck, lady. This weekend we went on a whirlwind tour to look at 12 houses. We saw 6 that we liked, picked the best from the top of the list and put an offer in. If that one falls through for any reason, or we get a bad vibe from the seller, we’re going to move down to the next one on the list. Wash, rinse, repeat until we get a house or run out of options, in which case we go back out looking again.

At this point we’ve been living with our inlaws for over two months now, and despite the fact that it’s an incredibly generous gesture on their part to keep us for so long, the situation is not without its stressors. This is especially true of my wife and her mother who, despite being extremely close, are extremely incompatible housemates.

Anyway, that’s my tale of woe. We’ve got an offer in right now and our fingers are crossed. I probably won’t be doing a whole heck of a lot of blogging until we get a house to call our own.