I gathered boxes, and slowly began packing up the things that we didn't use everyday, like extra bedding and mementos. We tried to get rid of as much stuff as we could. I started to look at pricing for a storage unit. HOLY COW they are expensive! We knew we would need one for at least a year, and since we were packing up pretty much our entire house, we'd need a decent size one. We got a few estimates that were around $300, and knew we had to get more creative.
We researched some other options, and ultimately decided to purchase a sea container. We got the idea from Rich's uncle, who stores his on some vacant property that he owns in town. It cost us about $1800 to buy the container, have it painted, have vents installed, and have it delivered. There is more than enough room for our stuff, and the benefits of owning one is that we could sell it for easily half of what we paid. This saved us thousands of dollars, especially since we ended up being at his parents house for longer than we thought.
We moved all of our stuff out of our house and into the sea container, and my in-laws house the weekend of Easter 2012. We spent a couple of months cleaning the house, painting, installing new carpet, and fixing up things to get it ready to rent. I used Craigslist to list our property, and it worked out great. I think we had about 5 people look at it, and 3 submitted applications before we found the people who rent our home currently. Finding the right people takes time! My advice is to go with your gut. If you feel like something is slightly off, be patient until you find the right tenants. There are a lot of laws that protect tenants in California, and you don't want to deal with bad tenants for a year. We originally wanted to rent our house by June, but we found the perfect tenants who couldn't start the lease until July. We wanted a at least a one year contract, and this family wanted a two year contract. They signed the contract without having physically walked through the house. And they have been GREAT tenants. We love them! They are kind, take care of our home, and keep in touch with us. We are SO thankful for them.
Fast forward a little over a year to the summer of 2013. We hadn't quite saved up everything we needed, but we decided to start our house hunt because these things take time. We were looking for something that was at least 3 bedrooms, 2 baths, some land, extra parking, no HOA, close to the freeway, and in a good school district. We knew that we were looking for a fixer-upper; we couldn't afford anything turn-key.
We looked at LOTS of listings, visited a couple of houses that had potential. In August, a house came on the market that really piqued our interest. It was just a couple miles from our in-laws, close to the freeway, in a decent school district. It was a cute little blue house with white trim on a quarter of an acre, and had a mature oak tree in the backyard. The listing said the house was built in the 1950's, was three bedrooms, one and a half bath, hardwood floor, decent kitchen, and hooked up to sewer. The house had amazing natural light, with windows everywhere. and deck in the front and back of the house. There was space to run around. And one of the best things about this house? Rich's brother's family, and some friends of ours, lived right across the street. I remember going to look a the house, and getting kind of excited, thinking about dinners and block parties, and lots of kids playing.
After we walked through the house, we sat in the car with Rich's dad and our realtor, Tom, and brainstormed how we could make the house work. There didn't seem to be much renovations that needed to be done right away, so we could move in, live in it and save more money, and then make the additions we wanted. The room they had listed as the third bedroom wasn't really a third bedroom. It wasn't tall enough, and there were some pretty steep stairs leading down into the room. We thought we could easily use that as a home office, a playroom, or a kids room, but we would have to rework the stairs. We wanted to add another bathroom, and we wanted to add a real master bedroom. The house was listed at the top of our budget. In our car brain-storm sesh, we decided to put an offer in at asking for the house. We thought it might go quick. I think it was a Friday. Within the contract, we asked that the seller cover any repairs due to termite damage. We went home and continued to think about how we could add onto the house to make it work for what we wanted.
Here's where things start to get a little weird. By Monday, we found out they had accepted our offer, but it was contingent on the tenants moving out at the end of September. The turn around for acceptance of an offer isn't that quick, usually. Why didn't they wait to get other offers? Was something wrong with the house? We scheduled an appraisal of the house and an inspection right away. If something was wrong with the house, they'd find it, right? That same week, we had an inspector come to the house to check it out. That also gave us another chance to really look in, under, and on top of the house. Rich walked the house with him.
The appraisal came out great. It appraised for $35,000 more than the asking price. This was promising, but also caused us to question, again, why they were selling it for less than that, and why they took our offer so quickly if they could have gotten more money for it.
There were a couple of things that came out of the inspection report. 1. At some point, years and years ago, there was a house fire near where the fireplace was. There was visible charring from smoke damage both under the house and up in the attic. All of the damaged wood had been re-supported with new beams. The inspector told us that in its current condition, the fireplace wasn't safe to hold fires. We were okay with that, because it was right on the floor (no real hearth) and we probably wouldn't have a real wood fire in there because of William. Everything else related to the fire had been addressed and the house was safe from that aspect. 2. The wiring in the house was all messed up. It was old, with a couple different panels, and it needed to be re-done. Not a problem for us because Rich is an electrician. 3. Some minor termite damage. Very typical, and we could work with that. 4. Minor things like leaky faucet, and some ducting that should be replaced from the water heater that could be a fire hazard. Also, the jacuzzi tub hooked up underneath the house by an extension cord, when it really should have its own dedicated outlet. So there were somethings that could be fixed, but certainly nothing substantial. We were cautious, but still felt like the house had potential.
About two weeks later, we received the disclosure reports from the owner. If you are not familiar with this document, by law, the owner is to disclose to the potential buyer the condition of the house. It should include anything that they know is faulty, down to cracks in the walls, as well as anything that has been replaced or updated. If something like mold or dry rot was not disclosed, and we could prove that the owner had knowledge of it, and we went ahead and purchased the house and then had to deal with said mold, we could legally go after the previous owners for the damages. It is in the best interest of the seller to be VERY descriptive on that report. Oddly, the ONLY thing our seller had listed on there was that they had replaced the AC unit. Literally nothing else. Again, weird. They should have listed that there was a house fire. Additionally, from the previous listing, we knew that the house originally had a fire burning stove in the dining room area, which was no longer in the house. That should also have been listed. These were red flags, but they left us confused, because it really left them in a bad position, not necessarily us. Tom pointed those things out to the selling agent, and asked about them, but the other agent stuck to his guns and said nothing else. We discussed it, and decided to keep moving forward. We were still, however, very cautious.
In late August, we submitted our request for repair. We listed EVERYTHING we could, knowing that they wouldn't fix the larger things, like the electrical, but hoping they would agree to do some things. Just like we expected, they turned down most of our requests, except for a few things, like replacing the ducting on the hot water heater, adding a dedicated outlet for the jacuzzi tub, servicing the AC unit, and a couple of other things. We also had a bid for termite repairs that we submitted to the seller, which they already agreed to do when they first accepted our offer and signed the contract.
Almost immediately, the selling agent came back to us, questioning the termite repairs (there were repairs needed on both decks, and the eaves of the house). He claimed that they never agreed to cover the termite repairs. Tom politely pointed out that it was already agreed to when they signed the contract initially. They had to cover it. The agent made a huge mistake there with the seller by not reading the contract fully! The bid we received was for close to $8,000. There were a some problem areas, and the house needed to be tented. There was also wood that needed to be replaced on the deck. The seller decided to get a second opinion, and wouldn't you know, their bid was only $2,000! Red flag. Still, we stuck it out.
A few weeks before we were supposed to close, we went to church, like we always do. That morning, the choir sang "Great is thy Faithfulness."
Great is Thy faithfulness
Great is Thy faithfulness
Morning by morning, new mercies I see
All I hath needed, Thy hand hath provided
Great is Thy faithfulness, Lord unto thee
As I sang along, I couldn't help but feel it deep in my bones. I tried to coach myself early on, and prayed a lot the beginning to not become emotionally attached to anything we saw.. but fully expecting myself to do that. That's my deal. I'm emotional, and I'm a planner, and with that comes the projection. Imagining what life would be like in each home. I would imagine parties, and get togethers, and how dinners after work would go down. Playing in the yard, and envisioning our kids running around, and picnics in the front yard, and getting ready for school, and growing up. But this time, it was different. I could totally imagine what life would be like in that house, but I was really completely surprised at how unemotional I was towards the home. I felt at peace, and like my heart was protected. I sang that song on that Sunday, and found myself humming it at random times of the day throughout the rest of the escrow process. I knew that God had a plan for us, and that He would be faithful to us, whatever house we were able to buy.
Rich, Tom, and I were all pretty wary about the house. Well, not really about the house, but at the interactions with the selling agent, and how they handled the process. We felt like they were hiding things from us, but from what we could tell from all of our inspections, there wasn't anything too concerning regarding the house. It seemed like the owner wanted out, and quick. There was something off.
The seller agreed to give us $2,000 credit to cover the termite damage (not the $8,000 we had a bid for). They also provided us with the invoice for the handy-man who fixed the handful of things we agreed upon, as well as the invoice from the AC company that serviced the unit. We found out that the tenants were planning on leaving before Sept 30th, as they had bought a house. Great news to us, because you just never know with tenants. We set a date to sign all the docs for the loan, and we had provided them everything they needed. Things seemed to be going smoothly.
Then, a few days before we were supposed to close escrow, the selling agent sent Tom an email with some documents from the septic company who they had service/pump the septic tanks. Wait. A. Second. Septic? And tanks, as in plural?! We were not afraid of owning a property with a septic tank. But septic tanks are installed based on the amount of bedrooms and bathrooms the house currently has. You also can't build over where a septic tank is in the ground. The house had a fairly big lot, but the house was right smack dab in the middle of it. The area of the yard that we had envisioned building the addition would likely interfere with the septic system, especially with there being two. We were pretty shocked. We wouldn't be able to build on to the house without re-doing the septic system. We asked the agent why the house was listed on sewer, and they said it was a mistake. Niiiiice. The two tanks on the property were small, and one of the tanks was directly under where we wanted to add on. Also, the septic company could only certify one of the tanks. The other one was so old, and they recommended it to be replaced because it was likely to back up. Grreaat.
Rich went over to the house to verify where the tanks were located. He also looked around and found some more interesting things. Remember how they had sent us the invoice for the handy-man who was supposed to fix a bunch of little things? Yeah, well, most of them weren't actually fixed. The jacuzzi tub was still hooked up by an extension cord. No dedicated outlet had been installed, even though they said they had done it. The ducting on the hot water heater wasn't replaced. Awesome.
It was really easy for us to make the decision to back out of escrow. The house clearly wasn't what we thought it was. We could still add on, but it would cost probably double what we thought originally because of the septic tank issue. I was a little bit bummed because we were excited to have our own space again, but also REALLY thankful that we found out before we finalized everything. It would have been a really big mess to find out that stuff after the fact. We found out later that when the current owner bought the house a couple of years ago, it was a foreclosure, and the bank gave the owner a large credit. It was most likely to fix the bad septic system. The owner most likely just pocketed the money, rented the house out, and then started to get complaints about the sinks backing up from the tenants. Instead of putting the money in to fix it, they wanted to sell it.
We signed the cancellation papers, and were refunded our money. Great is thy faithfulness still played in my head, as we started looking at listings again.