When we found out we got denied for a home loan
last year, we stopped looking altogether.
No more internet searches, no more open houses. A few months later, since we knew we wouldn’t
be buying, we decided to rent a new place in Makakilo that was more
comfortable. We moved up the hill from
Kapolei in September of 2012 to Kai Nani.
Now fast forward six months to March 2013. It had been ten months since we had thought
of that house in Makakilo, and six months since we moved to a new
townhouse. The realtor who showed us the
“distressed” property back in May 2012 left Mike a random voicemail that said
something to the effect of: “Just wanted
to let you know that the house you looked at last year is coming out of Escrow
and will be back on the market on Monday.
Thought you might still be interested, and wanted to give you a head
start if you were.” What? Did this realtor really still have Mike’s number
saved in her phone? Did the people who
were in Escrow, really back out after nine months of waiting? What went wrong? Did we really want to get involved with this
place? Where we even looking at buying a
house still? Could we afford it
now? Should we go for it?
I remember praying about the decision to go look
at it again after all of those months.
It still looked the same to me.
They apparently fixed the leak, but the walls were still moldy. I just wanted to get in there and CLEAN, but
that wasn’t possible.
The price had dropped by almost $20,000. With these numbers, the projected mortgage
would be doable for us. We got a
pre-approval letter with no problem this time, and we decided to make an offer.
Because the realtor had been back and
forth with the bank so many times with the other potential buyers, she knew
that the price it was listed at was approved already. If we were to offer lower, we ran the risk of
“losing our chance” so to speak. I
remember it was a Saturday, not sure of the exact date, early March I
think. We had gone to look at the house
one last time the previous week. Linda
had a loan officer that she wanted us to meet, a guy named Pat. We were at Linda’s Coldwell Banker office in
town just to hear our options about the FHA 203K loan. The idea with the FHA loan was to get money
for repairs rolled into the loan and do the bulk of the work ourselves. From talking with Pat and Linda that day, it
seemed like the type of loan we needed for this property. There was already a cash offer on the table
for the house, but we decided that day to go ahead and make the formal offer anyway. We filled out a ton of paper work, and asked
Pat a multitude of questions about the loan, its payouts and disbursements and
what the process might look like for us.
Although he didn’t seem to fully answer our questions, apparently we
were satisfied enough to make an offer.
All of this was under the assumption that we could work on the house
ourselves.
Plans
started running through our minds in streams of conscientiousness. Demo, dumpsters, cleaning supplies, friends
to help, living arrangements, new appliances, kitchen cabinets, flooring, paint
colors, opening up the walls, mold, plumbing, jammed sliding door, jungle in
pool, garage door, jalousies, yard work, new bathrooms, and the list went on
and on… Mike, being the thorough and
industrious husband that he is sat down with me the week prior and hashed out a
rough projected budget. Of course Jordan
looked over it and had us add some things that he and Kim remembered costing
more than expected with their own house.
What a blessing to have the Garretts in our lives. Not only are they wonderful friends, but they
had just bought a house in Waikele the year before and knew the process all too
well. They were excellent resources in
terms of estimated cost, the time it would take to demo everything, and the
amount of time it might take to finish certain projects.
Now
rewind back to the Coldwell Banker office with Linda and Pat. After the mountain of paperwork Linda had us
fill out, Pat was able to get ahold of a HUD inspector that he uses. That same day, the inspector met us out at
the property to do a walk through and write up a report of his findings. Kim and Jordan also met us there as well as
Linda. We were officially the back-up
offer on the house. God’s hand was
already at work. In the office, Linda
was very candid with us. She said that
the offer before ours was a cash offer; however, the buyer needed to submit
paperwork by midnight or ask for an extension to continue in the process. The longer we waited, the more money we could
save. We were actually in no hurry at
all! Another tid-bit I forgot to
mention is that we decided to go with Linda as our realtor. She was now handling both ends of the
transaction, buyer and seller. Because
of that, she was willing to give us a half percent off at closing. We tried for 2%, but decided that half is
better than nothing.
At
the property that day, Cory took all kinds of pictures and inspected many
things. When he was finished, we all had
a conversation in the front of the house about the FHA 203k loan and the
possibilities of getting reimbursed for materials if we did the work. Again, he (as Pat did) assured us that we
could do the work ourselves. We needed
to have a contractor bid on the job as a safety net in case we got hurt, but
that absolutely we’d get reimbursed for materials. It was tough getting a straight answer from
Pat on how the disbursements got paid out, and we never felt he truly
understood our end goal. FHA was looking
more and more like a 3-ring circus with fiery hoops to jump through, but we
thought we had no other option.
In
all of this, God’s hand was at work. It
wasn’t until we got a contract from Pat that we looked for alternatives. In the stack of papers, and endless numbers,
there was a clause that said: “The work
will be completed by the contractor(s) that bid on the job.” This made us feel uncomfortable about the
whole process. The point of the FHA 203k
loan was to get the money rolled into the loan so we could do the work
ourselves. At this point, FHA and our
chances for getting the house were looking grim. Mike did his homework and talked to a few
other loan officers around town. All of
them said the same thing—NO, you can’t do the work yourself with that type of
loan. What? Did we hear them correctly? We weren’t allowed to buy our own materials
and paint our own house or lay our own tile?
Contractors had to do every bit of the work? That would cost a fortune! Again we went to God and laid our concerns on
the table. Was this our closed door? We were supposed to do something
different? Was this an exercise in trust
and obedience?
More to come...
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