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You can tell a lot about a real estate listing by its photos. And the few photographs in this listing are as enticing for what they don't show as for what they do. Namely: a kitchen. But I’m no longer daunted by kitchen renovations. In fact, after seeing so many over-the-top kitchens, like this one, I’ve actually come to prefer a kitchen we can make our own. It won’t have granite countertops or high-end appliances, but it will be comfortable and practical. In this case, we could even get a great view of a magnolia tree just outside the window.
Michael: The kitchen in the last place we liked was worth more than some houses in Detroit. But before we get there, I need to pause—as I did yesterday—on the front lawn. I was mesmerized by those two elephant-size hedges. A little boy could get lost for days in one of those things. His father could spend a month’s worth of Saturdays trimming them.
Nora: I liked the manicured lawn and hedges. They give the property a certain grandeur, making the Tudor-style house seem very English, very elegant, very expensive. Yet it’s in our price range!
The interior was equally elegant, though I didn’t necessarily feel that way walking around in my socks. (The floors had just been refinished, so we were instructed to leave our shoes at the door.) The vaulted ceiling, the wood beams, the stone fireplace—it was all very stately, and the attached sunroom was charming. I’d seen all this from the photographs, however, and was more enticed by the kitchen mystery around the corner. It looked like it hadn’t been renovated in decades.
Michael: I really like this place—it’s just different enough to be interesting, but not so different as to be impractical. Well, there was that one closet with a window. But in general, this house had well-used space—not a lot of overlong hallways or closets too big for the room. Sure, the kitchen was tiny and poorly applianced, but that’s fixed easily enough. The agent told me renovations would cost about $25,000. Or maybe it was $30,000. Either way—that was easy!
Redoing the floors was also a shrewd move. Something about newly finished floors makes a place feel shiny and clean. So the fumes were a little overpowering. But I got used to them. Also: New floors are cheaper than central air conditioning, which this house would also need. Now we’re spending more than $30,000 on renovations—but don’t worry; it’s all theoretical.
Nora: I wouldn’t be so sure about these renovations, Michael. I’ve been warned by many a friend and seen too many renovation shows to think fixing up is an easy or inexpensive task. And I have a feeling that this house needs more work than we can see in a quick walk-through. Maybe we should bring a contractor with us next time we look at a house? I’d really like to get a better sense of how much all this costs before I get my heart set.
Michael: Sure. Last but not least: After several background briefings, phone calls with anonymous sources, and predawn meetings in parking garages, our crack team of researchers has been able to learn the identity of the former owner of this house. I have jogged on the campus of her alma mater.
Nora: I would like to have met her. The fact that proceeds from the sale of the house will go to fund minority scholarships gives this place good karma. Still, just because I admire her doesn’t mean I want to live in her house.
Michael: OK. I suppose I can let this one go. But if it’s still here in a few weeks, I reserve the right to come back. This time maybe I'll bring a landscaper and get an estimate for hedge care.
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Maybe it's because of my job, maybe it's because of my upbringing, maybe it's because of my heritage, but anything or anyone described as "earnest" immediately arouses my suspicion. So when the topic of "earnest money" came up last week, I was not favorably inclined.
Earnest money is basically cash that you give to your real estate agent to show sellers how serious—excuse me, how "earnest"—you are about buying their house. Your agent then hangs on to it until the deal either closes or falls through. If it closes, it's put toward your purchase. If it falls through, you get it back. Theoretically. The law varies, but if the deal falls through for reasons not spelled out in your contract, the seller can keep your money even though you don't get the house.
There are other ways to show earnestness (the amount of your offer, the size of your down payment, a heartfelt note hand-delivered to the sellers). But, in homebuying as with wedding gifts, people generally like money. So the question, essentially, is this: How earnest a buyer are you?
With this house, I can tell you exactly: We were prepared to be 1 percent earnest. With an asking price of $638,000, this is not an insubstantial amount of earnestness. Besides, as far as I can tell—in real estate as in life!—there is no agreed-upon standard of earnestness. Sometimes earnest money is a percentage of the asking price; sometimes it's just a few hundred or thousand bucks.
But our Realtor was aghast. Our offer wouldn't be taken seriously, she said. But what about our offering price, I asked. What about our proposed down payment? What about this contract we are prepared to sign? What about this essay Michael wrote in high school about the dignity of work as portrayed in the songs of Bruce Springsteen, which he is prepared to fax to the sellers? [That essay sounds awfully earnest to me!—Nora.]
The one thing we were not prepared to do was to be 4 percent more earnest, which is what our Realtor suggested. Maybe we were wrong. And I understand that the seller wants assurance that the buyer is serious and will see the transaction through. But this argument seems to ignore the presence of a contract. If you sign an offer, which protects and obligates both parties, then what's the purpose of "earnest money"?
I'll tell you: It has no purpose. Sellers, with the encouragement of Realtors, extract it simply because they can. And because they have been working this way for decades, maybe even centuries. I wonder how much earnest money Abe Lincoln had to pay to get this place.
All this said, I concede that this position is not entirely rational. After all, if we really want the house, and if all the conditions we spell out in the contract are met, what does it matter? We can just subtract the earnest money we pay now from the down payment we plan to make later. What's a few thousand (or tens of thousands) bucks among friends (or parties to a contract)?
Well, I'm not there yet. I may have to be irrational about this for a while. Earnestly irrational.
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Nora: Hey Michael, as I was putting together our itinerary for this weekend’s open house visitations, I noticed this house, which practically screams, “motivated seller”! Just think, for a few thousand dollars more (just as I wrote that I thought, This
is what buying real estate does to you: You start to toss off phrases
like “a few thousand dollars more” as if you’re talking about pocket
change) we could have eight more bedrooms than we’d have in the beloved green house.
What would we do with 12 bedrooms and 4.5 baths? I smell a family
reunion … or a bed-and-breakfast. Either way, I smell a lot of pancakes!
Yes,
it’s on a main street. Yes, it’s way too big for us. But it’s hard to
resist the temptation to look at a house that’s going for $261,000 less
than what the current owners paid just two years ago.
Michael:
But the point isn’t how much the seller paid for it—it’s what we can
afford! And we can’t afford $700,000 for a house, even if it comes with
12 bedrooms and all the pancakes you can eat. Though I have to say, if
it ever comes down to a decision between two similar houses, each with
pluses and minuses but one that features free pancakes, I would choose
the one with free pancakes. I would also accept free waffles.
Nora:
True enough, but if they're willing to knock off $100,000 from their
original asking price, if we wait long enough, maybe they'll knock off
another $100,000. There I go again, tossing off big numbers
nonchalantly!
Michael: You’re right that there are some pretty drastic reductions out there. In
most cases, alas, the biggest discounts are for houses that
we can’t afford or
aren’t really even houses.
But I am not sure we have yet hit bottom. Not that I care too much—like
I said, we can afford what we can afford, and trying to time the
real-estate market strikes me as about as foolish as trying to time the
stock market. But banks and lenders do care, because all this price
uncertainty can make it
hard to appraise a house. Which is important, as we are learning.
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We may have finally found a replacement for the yellow house. When I saw this house come on the market Friday, I wanted to make sure we got to see it before the open house. But this time, in an effort to elevate Michael’s enthusiasm and tamp down mine, we decided that Michael would see the place first without me (since one of us had to be home with the napping Joe) before we went to see it as a family.
Michael: I was honored: I felt like the scout sent ahead of the rest of the traveling party. Growing up, I always wanted to be an Indian scout, and when told that would be impossible, I wanted to be a plain old scout. Sad to say, seeing this house a day ahead of time may be as close as I’ll ever get. When I got there, I met the seller’s agent, and we wandered around like we didn’t own the place.
Nora: We’ve looked at quite a few houses in this neighborhood—at least five by my count, including one right around the corner that looks like its twin. I liked that house, too, though I was concerned about the lack of central A/C, the small kitchen and backyard, and the absence of a bathroom on the lower level. But that house (which was taken off the market), like this one, had very spacious bedrooms with nice views and a great main-floor layout. For one thing, the stairs don’t hit you in the face when you walk in the door.
Michael: I liked this place as soon as I reached for the handle of the screen door. I am a sucker for a wooden screen door, especially if it slams.
Nora: Funny, screen doors make me think of sleepover camp and mosquitoes. Still, when Michael got back from his scouting mission, I was even more worried: He liked the house as much as I did. So, in a role reversal, I took it upon myself to curb our enthusiasm. My objections boiled down to one: This house was too nice. OK, maybe two: It was too expensive.
Michael: That’s what the Internet says, too. And when it comes to “comps,” I trust the Internet as much as any real estate agent. Maybe more. (What is so frustrating about “comps” is that, like Iraqi WMD intelligence reports, people use them to reinforce what they already thought in the first place.)
Nora: When we all went to see the house on Sunday, I was swooning. Even the small kitchen, probably smaller than the one we have now, didn’t bother me so much—it opens into the dining room. Still, there wasn’t a whole lot of counter space, and while the expanded pantry is useful, we’d have to do some serious paring down. I may even have to throw away that box of spaghetti that’s traveled with me from Brooklyn to Manhattan to Los Angeles to D.C.
Michael: Not your ancestral spaghetti! I will part with my World Series Champions Red Sox Wheaties box (the 2007 version, not the 2004) before I allow that to happen.
Nora: A bigger concern about the kitchen was that, in this small space, the owners have managed to cram in some serious, high-end equipment: an Asko dishwasher, a Bertazzoni chef stove, and a Fisher & Paykel refrigerator. These additions have no doubt added to the price of the house, but I’d be perfectly happy—in fact happier—with good old GE. I don’t need such a fancy kitchen.
Michael: It’s sort of a U.N. kitchen: stove from Italy, refrigerator from New Zealand, dishwasher from Sweden. (What’s that joke about the difference between heaven and hell? Oh, here it is.) Like you, I never would have bought these high-end appliances—and with the money we’d save on good old GE, we’d be able to afford an extra fridge or freezer for the basement, which we’ll need because if we live here we’ll have to do all our grocery shopping at this place. But I would request that we still get a refrigerator with an ice-cube maker. I’ve never had one of those.
Nora: I don’t know. Do you think we could tell the owners they can keep their appliances if they lower their price?
Michael: Sure. Or we could just offer a lower price. It’s not as if this is a perfect house. Besides the kitchen, for instance, there is the matter of puny upstairs closets: The current owners have basically given over most of a wall in their bedroom to shelves and hangers. Then again, as Sarah Susanka says, there is no such thing as the perfect house. There’s just a house that we like that we can afford. I don’t think there’s any doubt we like this house. The question is whether we can afford it.
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Nora: I think we need to lay down some rules here. First: Our house must have at least four standing walls. Second: Renovations on said house must not cost more than $50,000, depending on the asking price, and be minor enough that we can live in the house while they're being done. (Read: no asbestos-removal projects.) We can't afford to pay rent and a mortgage while we wait for that central air to be installed or for parts to be shipped in from wherever.
Michael: I prefer to think of these as goals, not rules. All other things being equal, yes, we should be biased in favor of four walls and what real estate agents call move-in-readiness. But we should also be mindful that some types of houses have historically been discriminated against.
Nora: OK, so with these "goals" in mind, I was drawn to this house, which is roughly a mile from a Metro station and in a good school district, I think. (Question: Why aren't agents required to disclose which schools are connected with addresses in their listings?) And with a list price of $575,000, it's within our budget, and interestingly, only $4,000 more than what the sellers paid for it.
Michael: The sales history is more interesting than that. Today's price is seven times—that is not a typo—what this house sold for just 10 years ago. The current owners are going to lose money. (They put in that nice new granite-countertopped kitchen! How come you haven't mentioned that yet?) But the previous two owners did pretty well for themselves. Wonder where they are now.
Nora: Michael and Denise expressed skepticism about this place even before we visited. As they both noted, its biggest flaw is that it's on a main street. But Michael: We live on an even busier street now!
Michael: But Nora: Our apartment's in the back! And at least now it's a busy street with a lot of buses. Joe has requested that we stay on a bus line.
Nora: I admit, driving to the open house on Sunday, I nearly got into an accident trying to pull into the driveway. Backing out was even more hair-raising. But such obstacles can be overcome, especially when the house you're pulling away from is as charming as this one.
I was won over by the quirkiness of this house's layout. In an area glutted with brick colonials, townhouses, and Capes, it's refreshing to walk into a cottage-style house with a little bit of personality. There was no center hall here, just rooms flowing into each other in a stream-of-conscious way (kind of like this blog!). And then there was that kitchen: new and spacious, with room for a table as well as a view of the yard. Granted, the countertops were granite, but I'll take it if it means I'll be in a kitchen open enough that I can feed and talk to Joe while I'm cooking.
Michael: I was wondering when you were going to mention that granite.
Nora: And how about that spacious master suite with the skylights?
Michael: Don't try to change the subject! You campaigned against granite countertops, yet now you appear ready to accept them! Did the granite lobby get to you?
Nora: Love the pun link, Michael. But let's get back to the matter at hand. I don't want this to turn into a paean to décor, but it's so hard not to fall for a house that feels so, well, homey: that wrought-iron bed, the beautiful dining table, the cool art. Of course, this is why we have stagers—and TV shows about stagers (I can't stand that show—Michael), and even an association of stagers. (Is there anyone without an association these days?) According to a recent study by that association, staged houses spend 89 percent less time on the market than nonstaged, occupied houses. Given the source, one should take this statistic with a grain of salt, but you can't dismiss the power of good taste. The reasons aren't purely psychological, either: Cosmetic changes are costly, too. Carpeting, paint, bathroom vanities, kitchen cabinets—they add up. And given our limited do-it-yourself skills, there's also the contractor, and the money we'd pay, say, eating out for a month while our kitchen's being finished. As I said, it all adds up.
Michael: I had the opposite reaction. You're right, the house was nice and homey, but it felt crowded to me. Of course, when I went to the open house, it was crowded—at one point I had to wait for another guy to come down the stairs. I think I would have liked it better if it had been empty. Also because it would then have been easier to picture how we would fit into it. And by the way: Who says our do-it-yourself skills are limited? I look forward to the opportunity to test my skills in an environment that doesn't involve Allen wrenches and directions translated from Swedish.
Nora: I have a feeling Michael's going to focus on the drawbacks: the street, the fact that there's only one bedroom on each floor (Do we really want Joseph sleeping alone on the first floor, just steps away from the cookie jar—and oven?), the lack of grass in the backyard. (Can we replace the hot tub with a swing set?)
Michael: That's a good point about cookies and the oven. Though I'd be more worried about ice cream and the freezer.
Nora: It's just that after months of house-hunting, I'm getting tired. I just want to curl up in that wrought-iron bed and call this place—someplace—home.
Michael: Don't worry, Nora! Wherever you lay your head each night—that's home for us.
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A watercolor image in a listing: How quaint! Or is it? The devil in me wondered: Might it be an effort to cover up the truth a photograph might reveal? Or was this house so lovely it inspired a work of art? I had to see it and find out. And after I saw it, I sent Michael over for a second opinion.
Nora: While the house was not quite as sun-dappled as the painting (OK, it was a cloudy, wintry-mix kind of day), this three-bedroom, two-and-a-half-bath semi-detached colonial, just a few blocks from where we live now, was indeed quaint. Its brick-and-stone exterior was inviting—maybe not put-me-in-a-painting inviting, but pleasing nonetheless.
Michael: Some guy honked at me as I was pulling in front of the house, which is on a very busy street. (You can too park on the street on Sundays, buddy!) Also, I was late, so the open house was over. Fortunately a very nice man in an overcoat, loafers, and red socks let me in to have a look. (I assume he was an agent.) Still, I was not in the best frame of mind.
Nora: Inside, there was more to please: hardwood floors, an open floor plan, and a first-floor powder room. And the kitchen, though quite small, had a decent amount of counter space (and not granite ones, either). The living room looked out to a deck and a surprisingly large backyard.
Michael: What was up with that kitchen window into the dining room? Very high. Hard to see the people eating. How is a chef supposed to make adjustments between courses to match his cuisine to the palates of his diners?
Nora: If we don't like your pancakes, we'll just have PB&J. Seriously, after I saw this place, I thought: OK, we could live here. I wasn't alone in thinking this, apparently. There was a steady crowd here, and I don't think it was enticed just by the Girl Scout cookies the agent was offering. The basement was nicely finished and opened to a patio and that nice green yard. Upstairs, the three bedrooms were definitely quaint in the other sense, which is to say small—but not intimidatingly so, and the closets were surprisingly big.
Michael: I didn't get any Girl Scout cookies. It's interesting how your view of a house for sale can change depending on whether you see it at an open house. In a way, I think open houses are inherently misleading. Either they're crowded, in which case they tend to ratchet up anxiety: Look at all these people! Do you think they'll make an offer? Is that guy measuring the blinds?? Or they are deserted, in which case, well, they tend to ratchet up a different kind of anxiety: Is there something wrong that I'm missing? Where is everybody? I feel like I'm intruding. I'm sorry, I'll go now.
But to get back to this place, Nora, I think what we both liked about it was its efficiency—there was very little wasted space. So even though the rooms were small, they made the most of what they had. It's not like there was a 20-by-20 foyer leading into a tiny living room or walk-in closets for a bedroom barely big enough for a double bed.
Nora: Also, at $624,000, this house is at the top of our price range, but we could probably swing it (Michael: What did the lender say?). Still, much as I liked it, there were, as always, drawbacks: the petite kitchen and bedrooms, but perhaps most troubling, the location. While certainly convenient to public transportation and a commercial strip that includes a beloved local bookstore, this house suffers the flip side of convenience: That brick-and-stone façade faces that aforementioned very busy street, which gets backed up with traffic during rush hour and beyond.
Michael: What does Joe do when the ball goes into the street? That's what I think about. This is usually your department!
Nora: The ball doesn't go into the street—he's not allowed to play in the front yard. He plays in the back. But my deeper concern is what a friend said to me recently: "Half a mil for a ‘regular' house is way too much, even with the benefit of being in D.C." (Of course, she lives in Philadelphia.—Michael.) Still, half a mil plus $124,000 is definitely way too much for a house that isn't my beloved yellow one with the porch, which has literally become the gold standard.
At any rate, I had another listing on my itinerary. It didn't come with an artist's rendering, but it did have a funny tag line: "GREAT NEW PRICE---PERFECT FOR THE NEW STIMULUS BILL!!" I guess that means it's priced to sell, but at $699,000, perhaps not to us. Still, the desperate tone of the ad intrigued me. I went on my own, figuring that this one, unlike the previous one, probably won't sell in a couple of days.
The house, a spacious three-bedroom colonial, is located in a neighborhood I'm not very familiar with, but there are things about it I like: It's in a desirable school district, close to a park and a straight shot to a Metro station a couple of miles away.
The scene here was quite different from the previous open house. Not only were there no cookies, there were no people. The agent, who told me she wasn't the listing agent, was refreshingly candid. The house, she said, had been on the market for more than 100 days, and the sellers had finally been convinced to drop the price by $50,000. The implication was clear: These are motivated sellers. She also let me know that houses in this neighborhood weren't selling for what they were three or four years ago. Could this be the kind of bargain we've been reading about? Might they entertain an offer for, say, $500,000—or less, I wondered?
But wait, did we even want this house? Nice though it was—a spacious kitchen (no granite!) and a sweet screened-in side porch were among its appealing features. (But, oddly, the sellers had turned the smallest of the three bedrooms into a very large walk-in closet.) Probably not. Sensing my hesitation, the agent mentioned another house, smaller, she said, but in a more convenient location. Hmm: Michael had mentioned this very same house to me the other day. Perhaps they were onto something. I'd have to take a look ...
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When I sent the listing for this three-bedroom colonial in Silver Spring, Md., to my mother in Texas, she responded with an all-caps e-mail message (and an equally emphatic phone message). “THIS IS A VERY GOOD HOUSE,” she began, going on to praise the BRICK, SLATE ROOF, GARAGE, even the relatively low taxes. “I WOULD LOOK RIGHT AWAY!” she advised. Denise felt the same. So we made an appointment to see it Saturday, to beat the Open House rush on Sunday. We weren’t going to get burned again.
I’d been scoping out this neighborhood for a while. Last summer and fall I’d looked at two houses on the same street: One, whose final list price was $688,000 -- a spacious (yellow!) five-bedroom with three-and-a-half bathrooms, a comfortable eat-in kitchen and generous yard –- ended up being rented after several months on the market. (Did they really rent it for $2,800 per month? Two-bedroom apartments in our building go for that much. Note to Michael: Maybe we should rent a house?) The other, whose final list price was $570,000 –- an “enchanted English cottage,” as the realtor put it, with three big bedrooms but no central air conditioning, a small kitchen and minimal yard -– went off the market after several months when the owners no longer needed to move. Both houses were appealing, but one was a little more than we needed (or could afford) and the other was a little less than we needed (and we could afford a little more). Something in between would have been just right.
So as we drove to see this place yesterday I had one question on my mind: Could this be our Goldilocks house? The location is ideal: Downtown Silver Spring is just a couple of blocks away, the Metro roughly a mile away and a park and library around the corner. From the toys and swings on nearby lawns, it was clear that this was a kid-friendly neighborhood. And my mom was right: The brick was nice (though couldn’t possibly be painted yellow), the slate roof looked sturdy, and yes, there was a garage. It also had three full bathrooms, one on each floor. The top floor was cozy in a good way, and the basement had been nicely finished to include both a play area and a guest area.
So what’s the catch, you ask? In a word: It was small. The large armoire and trunk in the master bedroom were a tip-off to a major flaw: very little closet space. And while I’m no advocate of souped-up kitchens, this one could use a serious makeover. The cabinets were large, but there was very little counter space, and the appliances included a half-sized dishwasher. To get something close to an eat-in kitchen, you’d have to break down a wall into the dining room. But then you’d have no dining room. It would be a costly renovation, not just financially.
We might have been a little more forgiving had the yard been bigger. (I’d seen a nearby house of similar size with similar drawbacks that had a lovely backyard, and sold for $526,000 after languishing on the market for months.) Here the rear outdoor space was very small, with a miniature deck and patio crammed in. It did have a nice side yard, with a beautiful old tree, complete with a swing. A very friendly neighbor (a dead ringer for one of Michael’s brothers, and who had a son nearly the same age as Joseph) came out to say hello -– this is a very sweet little community! -– and let us know that this swing and the corner it stood on were a neighborhood hang-out. For a minute I pictured Joseph playing on this corner with his new friends, selling lemonade. But then I looked back at the house itself, and thought, If only it were just a little bigger….
Denise pressed us with the news that there would be lots of interest in this house because of the location, price and low inventory. She’s probably right. She even suggested (“for grins,” she added, knowing I was about to roll my eyes) that this house might be a good investment property: Just a few renovations and, in a couple of years, we could sell it and find a bigger place. That’s market confidence I just don’t share.
(Note from Michael: What she said. Except that I would note, for the record, that brick houses certainly can be painted yellow. O ye of little faith!)
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This just in: Or rather this just on, as in on the market. It’s not yellow and it doesn’t have a porch, but Nora and Joe and I plan to look at it this morning. Maybe our visit will be the occasion for Joe’s maiden blog voyage.
But before we get there, I couldn’t let this comment pass without comment. “Bebette,” who says she is a real-estate agent, chastises us for not having talked to a lender. “Only a lender can answer the question, ‘How much can I buy?’” she says.
A lot of what is wrong with real-estate agents, and a lot of what went wrong with the housing market, can be found in those 12 words. Too many real-estate agents told too many clients that this mortgage lender could help them afford this house, and too many banks relied on mortgage brokers’ assurances to make the loans, and too many investment banks relied on banks saying these assets were valuable, and too many investors relied on investment banks saying these securities were safe…. I think we all know what happened here. This remains the single best explanation I’ve seen of how we got into this mess.
The reason to talk to a lender is not to find out how much we can buy. We know that already: how much we can put down, how much we can afford to pay per month, what our credit reports say and what kind of interest rate we’re likely to get. Maybe I’m being naïve, or maybe I’m being blasé—or maybe both! a dangerous combination!—but I am confident that we will be able to get a loan at a pretty good rate. A lot of these details cannot be worked out until there is an actual house involved anyway.
All this said, as I mentioned, I did talk to a mortgage broker the other day. One of the points he made was that the standard “pre-qualified” letter, which Bebette suggested we get, is pretty useless in today’s market. Back in the Bubble Era, practically all you needed to get a mortgage was a letter from Ed McMahon saying you may already be a winner. Banks today are slightly more cautious.
There is one advantage to talking to a lender, of course: Now I can tell Denise—and Bebette—that I have talked to a lender.
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By Nora Krug and Michael Newman
For our entire adult lives, whether in New York, Los Angeles, or Washington, we have been among the most discriminated-against minority in America: We are renters. Now, finally, we are ready to join the two-thirds of Americans who own a home. So while most of you may have been dreading the day the bubble burst, we have been anticipating it. We are hoping there is at least one desperate seller—that's all we need—of a big beautiful home just waiting for buyers like us: a 1.5-income household with great credit, enough savings for at least a 20 percent down payment, and, best of all, no home of our own to sell.
In this blog we'll chronicle our quest for our first home in post-Bush, pre-stimulus, late-bubble Washington. Before we begin, a few salient facts about us. We're the Newmans (hence the blog's title, not to be confused with the Newmans behind these delicious cookies). Michael's the politics editor of Slate, Nora (whose last name is Krug) writes the paperbacks column for the Washington Post, and Joseph is a 17-month-old who's running out of room to run in our two-bedroom apartment in Northwest Washington. And despite our years of saving—some of it dating back to Nora's bat mitzvah!—we can't really afford to stay in our neighborhood, which we like a lot.
So we start with that compromise. And we're prepared for more, the most unfortunate of which may be leaving the city for the suburbs. (There is a chance we could hang on to urban life by buying in Capitol Hill, but more on that in later posts.) Houses in our neighborhood start at about $800,000; three-bedroom apartments in our building are about the same. Other desirable neighborhoods—convenient to parks and public transportation, feeding into a decent D.C. public school—are simply out of our reach. We're holding out a tiny bit of hope, if that's the right word, that things will get so bad that a neighborhood like this will become affordable. But our real estate agent, Denise Verburg, has done her best to crush this hope. But hey, Denise—the economy could get worse! Then again, if it does, we might be out of our jobs.
Truth be told, our house search predates this blog. In fact, a few weeks ago, we were very close to making an offer on this very house, in Silver Spring, Md. It's a lovely house that fits many of our criteria: at least three bedrooms (this one has four); two bathrooms (including one on the main floor); a decent-sized but not-too-decked-out kitchen (granite is so over) with space for a table; a good-sized backyard (this one even has a sandbox); a basement playroom (this one was a bit dreary); good closet space (a great walk-in on the second floor); central AC (D.C. is horribly humid in the summer); and, if possible, a fireplace. And we were told that there were two offers scheduled to be made on the house the very next day. No fair, we thought. The bubble's supposed to be burst!
So wait: Why didn't we buy this house?
Several reasons, really, but the most important one is that it violated that most cherished and clichéd principle of real estate: location. The owners said that they walked to the subway every day, and we don't doubt them. But it is a 1.3-mile walk along a grim, busy thoroughfare. Neither of us is averse to walking a mile and a half to the subway. But isn't a nice walk one of the things you move to the suburbs for? There was also the issue of that dreary basement, the tiny living room, and more important, the fact that the neighborhood high school isn't one of the county's better schools.
Why move to the suburbs just to live in a smallish house with a long, unlovely walk to the train and be able to send Joe to an underwhelming school? But you'll move before Joseph goes to high school, Denise, our gung-ho agent, assured us. But hey, Denise—the economy could get worse! In fact it almost certainly will. We may have to stay in this house till Joe goes to college.
In the end, we decided not to make an offer, despite Denise's advice to make one with an "escalation clause." (To her credit, she allowed that it was a "counterintuitive strategy in this market." That's one way of putting it.) Neither of the two other allegedly interested parties actually made an offer. Nearly a month later, the house is now under contract. And we're feeling maybe a slight amount of nonbuyer's remorse. Until Friday, when this house came on the market. Joe and Nora are off to see it now.