How to buy a house (part 1)

Are you ready? I have a proven x-step program that will help you — yes, you — buy a house.

  1. Have your wife decide she wants to buy a house.

Important Caveat: You do not need to be married to reach this point. You can be unwed and have someone else decide to buy a house with you. It is important that you do not want to buy a house initially.

  1. Agree with your wife.

This just good strategy.

  1. Decide you want to buy a house.
  2. Realize that this has been a part of your wife’s plan for the better part of a year and be overwhelmed by the sheer deluge of house-related facts she contains in her brain.
  3. Go look at houses.

This was an important step. Ash and I went to go see two houses in neighborhoods we liked. On our own, without an appointment, and without the ability to, you know, enter the house and see what it was like on the inside. Instead we went and looked at the outside of the houses and decided that Ashleigh liked one and we both didn’t like the other one.

  1. Cry to the heavens in rage as the one house your wife liked is no longer on the market because someone bought it.
  1. Have your wife tell you that this will be a long process.
  1. Disbelieve your wife within the safety of your brain about the length and ease of buying a house.
  1. Disbelieve your wife in writing, in word, or in deed.

Step 9 is not required but it was one of the steps that we followed. I think I said something like, “I think we can get a house. We have like $10,000 in savings1. Why don’t we just offer that to the homeowner as a down payment?”

Substeps to Step 9

  1. a. Prove that a 20% down payment on a $300,000 house is $6,000.
  1. b. Realize the error in your math.

Step 9B isn’t required either. Sometimes you don’t need anyone to helpfully point this out to you! In which case, proceed to step 10.

  1. c. Say things like, “Well, at our current savings rate we will have the $60,000 down payment … in 7 years” and “If we cut our budget by 56.3% and took out all of our retirement savings and got a 25% raise every year for the next 3 years, we’d have the down payment by this September.” Wait a beat and realize your mistake.
  1. Despair.

You will repeat step 10 multiple times while trying to purchase a home.

  1. Meet with a realtor

We had a really good realtor, although I didn’t realize this until we were about halfway through the process. Her name is Brenda Ball, if you’re interested.

We are not currently anywhere close to halfway through the process.

  1. At the meeting with the realtor, she or he2 will answer questions like, “What if we have no down payment,” with statements such as, “Well, you can do a 0% down payment with Navy Federal.”3 It is important that you ignore any caveats after this sentence, especially caveats like, “but I wouldn’t recommend that” or “When did you serve?” These things will only distract you from step 13.
  1. Regain hope while in conversation with the realtor.
  1. Walk away from the conversation with the realtor with hope brimming from every follicle and cell of your being.

Having good, hopeful hair is an important part of buying a house. You cannot buy a house if you are bald.

  1. Develop a plan to save the money you need.
  1. Forget about the whole house plan for, like, 6 months.

Step 16 isn’t necessary. But I do remember there was a large gap between our first meeting with Brenda and when we actually went and looked at houses, under her supervision. We also developed a plan to save a bunch of money we needed but we decided to spend it on killing Ashleigh’s student loans. This was not a bad decision.

  1. Get a bunch of money.

Step 17 is essential. Buying a house is really really expensive and we could not have purchased our house without the generosity of my parents, who very kindly gifted a portion of my grandmother’s inheritance to us. It was tremendous. We could not have done it without their help.

  1. “Remember” about the whole house thing. Visit several houses with your realtor.

MATH INTERLUDE:

Once we got the sliver of money we needed for a down payment (about $12,000 in our savings account), it was time to actually look at houses.

Having around $12,000 in savings is really nice. Trying to buy a house with $12,000 … there’s a reason this is an x-step list.

A conventional loan with no mortgage insurance requires a 20% down payment. 20% down on a $300,000 home is $60,000. $12,000 is … yes, 20% of a 20% down payment (also known as 4% down).

This wasn’t bad math that we were doing at the time. With an FHA loan, you can make a 3.5% down payment: $10,500 on a $300,000 house.

However, we live in Southern California, one of the real estate capitals of the world. $300,000 gets you a  350-square-foot 1-bedroom beach-ish4 condo or a 15,000-square-foot behemoth hundreds of miles from civilization5. We wanted to live in Carlsbad (we were priced out), Encinitas (again, priced out), Vista, or Oceanside.

And that’s how we ended up with a price range from $300,000 to $350,000. And we were very aware that a 3.5% down payment on a $350,000 house was $12,250 ($250 more than we had saved for this eventuality). But $250 is a relatively small amount. Lots of small amounts like $250 will show up when you’re buying a house. The problem is that they also add up, too.

  1. Find 0 houses your first time out.

We wanted a 3-bedroom home. We weren’t considering two-bedroom houses because we wanted to buy a house that we could grow into. Ashleigh received the following advice which I will pass on to you:

“While you might plan on living in a house for 5 only years, you might have to be there longer. Don’t buy a house you are itching to get out of.”

This is good advice.

All the houses we visited that first day were ones we wanted to get out of. And that was before we entered these houses.

  1. Get offered a new job.

This was a very important step for us in the long term. I got offered and accepted a new job working with Qualcomm, which meant a large raise and a job switch. Oh, and temporary employment status. That was a problem much further down the line.

  1. Look at more houses.
  2. Find one you like! Make an offer.

We made our first offer on a seriously underpriced 4-bedroom house in Oceanside on October 27th. To obtain the house, I wrote a really long letter about how much we liked the house. With specifics. How we looked forward to running downstairs on Christmas morning. The beautiful tilework. Their excellent work on the closets. Etc etc.

Since the house was a short sale (e.g. the owners were getting kicked out and the bank was selling the house at a loss; or, everyone is unhappy), our realtor revised the letter to make it a bit more generic and a lot less specific in its warmth. Her feedback was, “You don’t want to necessarily remind them that they’re being kicked out of their home.”

  1. Get rejected

We received our first rejection on October 31st. The 4-bedroom house had 17 offers in 4 days and the one accepted was an all-cash offer. But this was a momentary setback.

  1. Find another one you like! And another. MAKE ALL THE OFFERS.

 

We made two more offers in the next week. One was a place where they wanted an accepted offer to see the house; another wanted a standard offer.

  1. a. Accepted Offer Before Visit

I never saw this place but they:

  1. required an accepted offer before we were allowed to see the place
  2. tried to upsell us on potted plants, refrigerators, washing machines, outside of the residential transaction.

Ashleigh went and saw the place. She liked it but the prospect of paying $250 cash for ficuses (ficusii?) was not something she liked. However, we still made an offer.

A few days later our offer was rejected. Someone had offered to purchase the ficuses.

  1. b. Normal Offer (Bellerive)

Ashleigh saw our normal offer house first and then I went and saw it with our realtor. It was listed at $350,000 which was pretty high for the market at the time. It was also pretty high for the property at the time.

Built in 1969, it had popcorn ceilings, carpet from 1970, paint and wall paper from 1970, deteriorating stucco, two un-updated bathrooms (complete with 1970s showerheads and soap scum), and was built on an enormous hill.

But it also had a deck, a white picket fence, a tastefully retro kitchen with a double convection oven, hardwood floors, built-in buffets, gorgeous trees, and large rooms. It had good bones.

But it wasn’t worth $350,000. So we offered $305,000.

  1. b. i. Counter-offer

Wouldn’t you know it? We got the counter-offer shortly there after. They would accept $325,000. So we countered their counter.

  1. b. ii. Counter-counter-offer

We had wanted to pay $315,000 for the house as we figured that was reasonable. At this point, we were still looking at an FHA loan, which meant we would need: ($315,000 x 3.5%) $11,025 for our down payment. To cover the cost of the updates we might need, we were considering an FHA 203k loan, which allows you to borrow as if your home were worth an additional 10% of the appraised value and use the additional amount to create some improvements. We could have $30,000 for improvements that way; we figured we’d only use about $20,000 for the improvements to make it liveable.

  1. b. iii. Rejection.

Our counter-offer was rejected. We felt bad about it at the time but not too bad. We didn’t think the house was worth the extra $10,000 they wanted in purchase price. So we kept looking. Also, we couldn’t really afford that. The extra $300 bucks in down payment was a consideration. Also, so was the inflating loan size.

That was an important consideration. While we could afford a $313,000 loan, that would mean, at the rates we were expecting, around $2,300 for a mortgage. That was getting into tight territory.

With the 203K loan, that meant we had to put down $12,000. Our payment would be around $2,400.6

This was slightly more than double our rent at the time.

  1. Make more offers.

Repeat step 10. Feel more and more desperate.

  1. Despair

We put in offers on 6 more houses. One got accepted en masse7 and then rejected shortly thereafter (I think they had 5 cash offers out of 17) in the next month. The rest fell by the wayside, as real estate agents enjoyed bathing in money, or whatever they were doing.

Conversations at the time varied from “We shouldn’t have pushed so hard on the counter-offer” to unpleasant words about our buyer to arguments about whether we should buy a house or not.

  1. Hope

On November 28, 2012, our long-languishing counter-offer on Bellerive Court was accepted. They counter-signed our expired offer8. Reading through the emails after the fact, the seller’s realtor told our realtor that she could “sell it all day at that price.”

Upon reflection, this was probably not the case.

  1. Enter Escrow.

One thing you’ve got to have in order to buy a house is this thing called “earnest money.”9 Basically, “earnest money” is cold, hard cash that you’ll provide to the escrow company in order to prove to your seller that you mean business. Or something like that.

In our case, we were offering $3,000 (which I think is fairly standard).  This basically secures your offer for a period of time for you to do all the inspections and title research and ley line surveying and private investigating that you will need in order to transfer one plot of land from someone else’s possession to your possession.

ESCROW INTERLUDE

If you’ve heard about someone buying a house, you’ve heard about the some kind of thing called “entering escrow.” We were doing that here: after our accepted offer, we (the sellers) funded the escrow account (with our $3,000). The house couldn’t be sold to anyone else for something like 45 days. We were promising that, 45 days after the escrow started, we would buy the house.

So we’d buy the house on January 12, 2013.

  1. Get a loan.

As discussed earlier, we would be financing this home purchase. Our realtor referred us to an FHA specialist who asked us to tell him everything about our finances ever. This was disconcerting at first. Then it was … concerting.

Our specific loan process was arduous. I will try to write it up at some point the future. Right now, I’ve been sitting on this post for 6 months. So up it goes.


  1. Round and/or wildly inaccurate numbers are really really important to use in Steps 8 and 9. Otherwise you will proceed to step 10 and stay there for a long time.
  2. Since our realtor is a woman, I’ll dispense with the very progressive switching the gender of my pronouns.
  3. We were seriously considering a 0% down loan for a while (I don’t remember if Brenda warned us away from it or not). That was, until we realized that the fees and interest rate associated with it would make it cost-prohibitive for us. Also, neither my wife nor I served in the military.
  4. This is a condo that, on a good day, allows you to walk to the beach in a few hours.
  5. Temecula!
  6. Remember the earlier note about round numbers. These are fairly accurate numbers right here and also include such diverse payments as: mortgage insurance, FHA fees, property taxes, and homeowners insurance.
  7. This means that the seller accepted multiple offers and made multiple counters. Once they received all the confirmed offers back, they can chose which one to sign or continue to negotiate with.They did not choose our offer.
  8. Usually you set an expiration on your offer. I think is probably so that, 5 years later, someone doesn’t try to force you to buy a house.
  9. !

 

New Heresy Edition (NHE) Proverbs 47

Just in the time for the holidays, there’s been a NEW REVELATIONS TO THE BOOK OF PROVERBS

The Lord knows that what really matters isn’t acting justly, loving mercy or walking humbly before your God this holiday season!

No! From the improviser inventor translator of the New Heresy Edition, it’s:

Proverbs 47: How to Argue on Social Media

Proverbs 47 contains such timeless truths as:

“If a Facebook post has more comments than likes, you should jump in and try to change someone’s mind.”

“Calling someone names and generalizing about their point of view is an effective way show people God’s love.”

“The Lord despises people who are wrong.”

“A fool listens but the righteous man quotes your own words back to you in a pedantic point-by-point refutation.”

“Everything is about the soteriological impact of Jesus’s work on the tree at Calvary. Including that instagram of your dinner. [CHOOSE YOUR OWN ADVENTURE!!!!]”

“Jesus was crucified on a CROSS MORON!”

“The difference between the log in your eye and the speck in your brother’s eye is pretty small so you should definitely point it out in public before dealing with your thing.”

“It’s just Facebook. They won’t mind.”

“Only a fool assumes that facebook is a highlight reel.”

“See how I made $4,879 working from home in my spare time. Click here.”

Only $45.45 with your revolving membership to the New Heresy Foundation.

Too Much Computering

Written on 5/09

I guess I hadn’t realized how much of my life I spend online. Even when I’m home sick with gastroenteritis.

Even stranger is how much time I spend on my computer. I spend a lot of time computering. Er, computing.

Anyway, I’m lying on the floor typing this. Incidentally, my phone gets 3 dots of cell phone service when it is lying on the floor next to me as I sit on hold, waiting for Cox to get on the line to give me account credit or fix my internet or something. So I will stay on the floor.

Written on 5/11

This has been a really bizarre illness; I haven’t been sick like this in my adult life. I’m improving a lot now, but I’ve never had to convalesce before. I’ve always bounced back pretty quickly.

But considering that my biceps are getting tired while I’m writing this, it might take me a while to come back from this.

Anyway, I’ve realized I spend an awful lot of time on my computer and that this something that I would like to change. I have a lovely house, I live in a fantastic place, and I’m married to a funny, adventurous and beautiful woman. So, expect to see, ironically, more blog posting about the things that I’m doing.

Groupon. STAHP.

groupon. stahp.

I signed up for Groupon about a year ago, because they offered a round of golf at a mediocre golf course for a mediocre price. In the year since, I have been besieged by Groupon emails for products that I will never buy.

I have only opened these Groupon emails on accident — or out of the fascinated horror that overcomes one when one realizes that one has been contacted by another human being who thought that what a 25-30 year old male living in San Diego, California would buy was a Groupon Getaway to San Diego | Yosemite National Park | Los Cabos | Fullerton, CA | Honduras. Not only that, but this person (or algorithm, to be fair)  wanted me to wash down my random vacation plans with: 42% off Rosetta Stone Language Course, Garmin Geocaching Bundle, Petnax Digital Camera … and Nail Services.

So, I can get my nails did, learn how to speak Spanish, and take a picture of the bobby pins that someone hid deep inside the Cal State Fullerton bowling alley.

Once I finished marveling at Groupon’s frighteningly accurate grasp of my travel and vacation plans, I thought: does Groupon think I am made of money?

The mani-pedi? $20 (a $40 value). Rosetta Stone? $259 (42% off $449). Garmin eTrex 10 Geocaching Bundle? $95 (21% off $120). Pentax WG-2 16MP Waterproof Digital Camera? $189 (37% off $300). The ellipses? Priceless.

(Just kidding. Total cost of the other items detailed in Groupon’s “42% off” email? $445.)

That’s $1008 for 500,000% off such valuable items as Netgear Wireless USB 2.0 Adapter ($10).

The travel deals are even more ridiculous: that San Diego | Yosemite | Fullerton travel deal email thing? $4,000 to take advantage of all the discounts on 29 days of vacation (not including food, airfare, or activities at the HoJo in Fullerton).

I wish I had the time and inclination to make a spreadsheet that compiled all Groupon’s ridiculous deals and offers from the last year but I do not. So I’ll make something up and put some math behind it.

If the prices above are any indication, Groupon expects me to want to spend around $1000 every 2 days on crap and services and $4000 every week on month-long travel plans. That’s …

$208,000 on travel and $182,500 on crap and services and stuff. $400,000 spent at Groupon every year.

know that Groupon doesn’t intend for me, personally, to buy all this stuff. But that’s still a ridiculous amount of crap for them to send my way. Let me put it in perspective: Groupon wants me to spend more money than the total value of house, every year, on crap and entertainment that I don’t need and have not expressed any interest in.

Groupon. Take a chill pill. Just send me a crappy golf deal once a year or so. I probably won’t buy it but I will feel better about thinking about buying it. And isn’t that what you want?

RIP Dorothy Earnest – part 1

My grandmother died on July 30th, 2012.

I learned this at 5:44 in the morning, when the buzzing in my ear turned into my phone ringing, and my phone ringing turned into my mother’s voice and my mother’s voice was careful and controlled and calm.

“Grandmom died 10 minutes ago.”

“Oh.”

My mom said more things to me that I do not remember.

“Are you okay?” she asked.

“Yeah. I’m fine.” All I could think was: don’t fall back asleep. Listen. Grandmom is dead. Don’t fall back asleep.

My mom asked if I was okay, again.

“Nah. I’m fine.”

She said more things but when it sounded like she was done talking I said “I love you, Mom.”

“I love you too, honey.” She hung up and I told my wife what had happened.

I realized I wasn’t completely back asleep when I could hear my wife beating a soft metronome with her breaths. I was worried about work. My grandmother was dead and I was worried about work. I was really worried.

I didn’t want to. Go to work, that is. That day, that is. I also didn’t want to be worried about going to work. This is more important than that. Your parents need you. Your family needs you. What else do you have in this world? Well, what will they work on without you? At work, that is. Today, that is. If you don’t go in, that is. Especially with what’s been going on lately. Will they work? Family comes first. They’ll probably work. Should I go in? I don’t want to. My grandmother died. But what about work? That situation is tough. In this sleepy cycle of justification I lost sight of the fact that my grandmother, a woman who has had a beating heart for 90 years and 9 months, was dead. Her heart had stopped beating. Her brain no longer worked. Her kidneys stopped disposing of waste. Her liver stopped filtering blood. Her spleen stopped doing whatever spleens do. She had stopped breathing. The one way that I knew how to relate to her was gone, forever, when the breathing stopped.

I decided I wouldn’t go in to work when my first alarm went off.

I’ve always wanted to be in a war

I’ve always wanted to be in a war—
Is that the wrong thing to say?
I’ve always wanted to be in a war
At least one like I would play.

I’d be covered in glory,
Glamorous and gory,
Full of wonderful stories,
Beloved and entitled to V.A.

When Uncle Sam came calling
I’d put my ball in
And off to boot camp I’d sashay!
(And that’s okay now, I’d be quick to say).

Camaraderie! Brotherhood!
Oh, what a dream!
Three meals a day! Three types of cream!
One for my face and one for the pot
And then it’s me and the cream of the crop.
One by one, my fellow soldiers would drop
From exhaustion or drunkenness or too much fear
And me standing alone and the general near.

“Sir!” I reply, and smart as a whip,
With a salute, and a smile, and a manner that’s slick.
“Earnest!” he cries and he pumps my hand,
“I’ve been looking for you! We need such a man!”

He gives me my orders and off I dash
With two pistols, a rifle, and a knife safely stashed.
Somehow I end up behind enemy lines,
With a knife at my throat and my fingers entwined
With a beautiful spy, a double agent—both sides—
Who I’ve seduced and converted to mine.

She betrays me, it’s true.
“But I expected that of you! I had a plan along!”
With my battle cry said, and leaping from bed,
I shift the knife in a jiff. Then I hear the click
And the spitting pistol whiff
Of a gun going off at close range.

That’s how it always ends, again and again,
No matter what course I take.
I guess that’s the price that you pay for a war
When the war that you’re fighting is fake.