1960ranch's Blog

Let the renovations begin…
February 4, 2010, 1:47 am
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After we closed on our house, the real work was just beginning.  The 203K closing process took alot of paperwork and alot of time (see my previous posts), but somehow we made it through and the house was finally ours!  Now all we had to do was fix it up.

My husband and I decided from the beginning to let contractors do all of the work.  With the 203K program you have to prove you are qualified to do the work if you are doing it yourself, which usually means being licensed.  During the closing process, we obtained quotes from 3 contractors to do different jobs on the house.  You are limited to 3 in the 203k Streamline process (and a max of $35,000). The first step after closing was getting out “first draw” to pay the contractors.  This can be up to 50% of the total amount borrowed for renovations.  We had our contractors get started while we waited for the first half of the money.  This turned out to be a problem, because it took 2-3 weeks to get the first set of checks.  The holdup was the lender processing our loan.  It took them over a week to get the loan into their system, which must be done before the first checks are sent.  We had a representative from M&T (our lender) who handled the check disbursements.  She sent us the paperwork we needed to get the first checks.  a separate form must be filled out for each check/contractor.  The form indicates the amount needed and must also be signed by the contractor.

It surprised us how different contractors can be.  Our plumber/electricians were from a well known local company that was medium sized.  Their work was good, but they weren’t very careful during demolition work.  We specifically asked them to be careful with the bathroom tiles if they had to remove any.  They broke many of the tiles and removed a lot that weren’t necessary to remove for the work the did.  They also used the dining room chairs we had stored in our basement as step stools when they were working on the plumbing.   We knew this because there were dirty shoe prints on them.  I probably wouldn’t have minded with wood chairs, but these were vinyl covered and can rip easily.  Our carpenter was MUCH better.  He was a family friend who did the work himself with a few other people.  They were careful and did excellent work.  They were also easy to work with and easy to get in contact with.  Finally, our painter/floor re finisher was the WORST.  He was a business acquaintance of my husband who had done some work at the place my husband works.  They poured paint out in our yard, filled our recycling bins with their demo waste (left it there after the work was done) emptied their shop vac into our yard and didn’t listen to any of our instructions. Their work looked okay when it was done, but aparently they didn’t do any prep work on the walls because some of the paint is already peeling.

Overall, the best advice I can give when hiring contractors is go with someone you trust, whenever possible.  But in the end, it will always be a gamble.  I suggest supervising the work as much as possible without getting in the way.  And always check up on the work daily, to catch any problems before they go too far.


Closing and 203K Loans
October 16, 2009, 3:03 am
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Removing the For Sale sign!

Removing the For Sale sign!

Sometime in February 2009 we discovered that we won the bidding on our foreclosed house.  We started out with a mortgage lender who had “some experience” with the 203k loan process but it turned out he had never done one himself before. Our lack of research into the lender turned out to be a huge mistake, and a few weeks into our 45 day closing period we had to switch lenders.  The main problem was the estimated closing costs.  The first estimate was around $11,000 (foreclosed homes are notorious for having higher closing costs, mainly because you must pay both sides of the transfer tax).  Then the lender came back with a second estimate that included things “he didn’t know about” and the closing costs jumped to 18,000!  We were not prepared to pay that much out of pocket.  We decided to take some money out of my husbands Roth IRA account (which is penalty free for a first time home purchase).  By cutting out our 3.5% down payment, our broker brought our closing costs to a more manageable number, however we were still uncomfortable with the constant changing.  When we finaly realized this lender had no clue about the rest of the paperwork involved, we switched to M&T bank, who in our area was known to “specialize” in these loans.  That broker had a much more realistic estimate of closing costs, but the paperwork was still a pain.  It seemed like every time we thought we were ready to close, another inspection had to be done or another form had to be filled out.

For the 203K process, we brought in 3 separate contractors: a carpenter for the kitchen and windows, a plumber/electrician/HVAC specialists, and a painter/hardwood floor refinisher.  The General contractor management was done by me – which saved money but not time or stress.  Everything is a trade-off as we discovered.

Once all estimates were in the total cost of renovations was approx $30,000.  This included: new HVAC (previously oil heat and no CA) new windows and doors, kitchen cabinet alterations to account for different appliance layout, new cabinet hardware, new kitchen and bathroom floor, paint house exterior, paint interior including kitchen cabinets, new light fixtures, new appliances, new bathroom shower and toilet, all new plumbing and some electrical work.. seems like alot for 30K!

Celebrating with Champagne!

Celebrating with Champagne!

With the 203k program its important to stay under 35k in renovations so you can do the streamline program which is much quicker and less paperwork.  You can include extra mortgage payments in your renovation costs if you arent going to be able to move in right away, but our goal was to only take one month in renovations. There are a million other tiny 203k details that i can’t explain here, so if you are looking for tips, send me a message!

The 203k process wasn’t the only time consuming part of the process.  The bank was very slow about getting us the information we needed to close.  We ended up getting 2 free 15 day extensions from the bank, which meant we ended up closing June 15th. Renovations started June 16th…and we moved in July 31st!

A twist of fate.
October 3, 2009, 12:41 am
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The housing search continued.. I had fallen in love with the mid-century ranch house, so our search was focused on finding another one, since we thought we didn’t get the foreclosed house. Unfortunately, these houses were all about 50K more than the foreclosed house. One house had the most amazing pink bathroom, all original fixtures and in great shape. That same house also had an original free-standing 1950s oven. We loved it, but the location wasn’t the best, and the house was in overall poor condition for the high price. Another house we looked at was inhabited by an 85 year old woman who had paneled the whole living room herself and insisted that all future buyers agree not to paint over it or take it out! She had a practically new wringer washer from the 50s in her basement, very cool! Unfortunately, that house was in almost as bad of condition as the foreclosure, but much more money. None of these places seemed quite right. Then, we found a large rancher on a corner lot with a great garage and workshop. The bathroom was awesome with a big vanity, and original fixtures, even though I didn’t like the pale peach color tile as much as the aqua tile in the forclosure. The price was right, because the house was the largest we had seen, in the best condition. The biggest drawback was the yard. The corner lot made the yard very small and not very private. Our forclosure had a deep 1/3 acre lot. Oh well, we can’t have it all right? We offered asking price. We were sure we would get it. Our realtor went to drop off the offer. 30 minutes later, he called me. “you’ll never guess what happened” our realtor said. I assumed our offer was accepted on the spot (does that ever happen?) “No.” My mind was racing, thoughts of our little foreclosed rancher creeped into my mind. “I just found out that the people who won the bid on the foreclosure backed out. You are next up. Do you want it?” Our other offer had already been submitted, but there was still time to back out of it. I immediately called Justin. The house we had an offer on was still a cute mid century ranch, it was much bigger, and we could move right in. But I wasn’t in love with it like I was the foreclosed home. It needed us. Justin had the same feelings, we could make the foreclosure our own. Pick out appliances, flooring, paint, everything. It would be more work, but it would be worth it. We chose the foreclosed house. Now it was time to start the hardest part: the 203k loan paperwork.

The Diagnosis
September 28, 2009, 3:58 pm
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Our soon to be (or not so soon) first home had a laundry list of issues.  Let’s start with the kitchen.  Immediately I loved the colonial style cabinets and original stainless wall oven.  Unfortunately, neither were in good enough condition to keep the way they were.  The wall oven was a little small to cook thanksgiving Turkey in, too.  The timer on the oven had “out of order” written over its dial and there were missing knobs.   On top of that the interior of the oven was falling apart.  There wasn’t much hope for this original fixture. None of the other appliances were original, but were in just as bad of shape.   The cabinets were sturdy, but had a lot of cosmetic damage.  My husband was not a fan of the colonial hardware, with the exterior hindges.  The floor looked like it was 50 years old in wear, but had more of an early 90’s look to it, and there was foot wide hole in the flooring by the fridge.  How did that get there?  The décor looked very 1990’s, with paisley wallpaper, and matching appliqués on the cabinets.

The house had quite a few replacement windows whose seals had already gone bad, the remaining wood windows were rotting and the panes were falling out.  The wood floors were stained and covered in a thick layer of dirt.  The house had undergone some abuse after the foreclosure as well: someone ripped out the toilet and some copper pipes.  The furnace had been disconnected, and there was no way to see if it was working.   There was evidence of water damage in the basement, along with heavy mold, which is why I think no one had bought the house yet.  We weren’t sure if the pipes had been properly winterized.

So, how were we going to tackle this?  Buying a home doesn’t really leave much room for home repairs, and the house was not livable as-is.  Justin found out about a government loan program called the 203K loan that allowed buyers (with intent to live in the property) to take out additional money with their mortgage to do home repairs.  The only catch was that the cost of the home, plus the repairs, could not exceed what an appraiser thought the house would be worth after the repairs were done.  The house’s asking price was 103K, and the average price of a house like this in livable condition was 150K, so we felt pretty sure we could qualify. We knew it would be a lot of work, but the house would be just how we wanted it when it was done, so we thought it would be worth it.

The first step was putting an offer on the house.  That’s a lot harder than it sounds with a foreclosure.  There was a bidding period on the house for 10 days, because the house price had just been lowered.  For 10 days, people could put in their offers, and then after the 10 days, the house went to the highest bidder.  We offered asking price plus 2,000 sellers help with closing costs… then waited.   On the day the winner would be announced I couldn’t think of anything other than that aqua bathroom.  What unworthy buyer would snatch it up and tear out the tile without a blink?  We deserved that house! No one would love it the way we would!  Then, at 2:30 PM the unthinkable happened- we had been outbid, by a little more than $100!!!!  I was heartbroken.  The only thing that consoled me was the fact that there were more aqua tiled bathrooms out there, waiting for us to save them.  We would resume our house search, broken but not defeated!

Love At First Sight.
September 28, 2009, 3:53 am
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First look

Originally uploaded by s smay

Justin and I always wanted to be homeowners. We got married in January 2008, and originally wanted to buy right away. It was lucky we waited, or we wouldn’t have gotten the $8,000 stimulus money! I kept my eye on the housing market the whole first year we were married. October 2008 was the first time this house went on the market. I thought it was cute, but since it was a foreclosure I assumed there was lots wrong with it. (and there was)

Finally in January 2009 we decided to officially start house searching again. Interest rates were so low, we didn’t want to miss out. On top of that the stimulus package was passed shortly after we resumed our search. And this lonely foreclosure still sat on the market. I had a few other houses i wanted to go see, so i decided to throw this one into the mix as well, just to see how bad it was.

It was the first house on our first day of house hunting, we pulled into the drive and i thought to myself “I don’t want to spend much time here.” But then we walked inside: The floors were dirty the walls were a mess, the kitchen was falling apart, but it was love at first sight! The living room was so open and inviting with it’s big window, the kitchen was just the right size. We walked into the bedrooms, which were just as bad. Then, i will never forget what i saw: standing in the first bedroom, looking across the hall, the gorgeous aqua and black tile of the bathroom gleamed at me from the walls. My favorite part of any midcentury home: the tile bathrooms. Then, to top it off, the original sink and medicine cabinet! I knew right then that this house had to be mine. No one else would love that tile like i would. They may even tear it out!

The rest of the houses that day were a blur. I had found my first home, i didn’t want to see anything else. But it wasn’t going to be quite that easy…..

Cigar Ash Tray?
September 28, 2009, 1:53 am
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Cigar Ash Tray?

Originally uploaded by s smay

I was told by my Grandma that this was her grandmother’s. However, I’m pretty sure its a cigar ash tray. My mom thinks it’s an inkwell. Which would make more sense because i cant imagine my great great grandmother smoking cigars. Not that I even knew her.

The lid lifts up and there is a glass jar inside, which is a good argument for the inkwell, but theres no place for a quill. I think the tray portion is for ashes, and the glas jar is to put the cigar out, cause it would put burn marks in the tray. The whole thing has to be cast iron because it is sooooo heavy. Any Ideas?

Hello world!
September 28, 2009, 12:57 am
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