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I Own a $295,000 House – Buyer’s Remorse and 8 Contract Counters

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Ever run a marathon and think you can’t make it but suddenly the finish line comes into view? Me neither, why would I run almost 27 miles for nothing? Those folks are crazy (but deserve a ton of respect for doing it). Anyway, my one month house hunting trek is coming to a close. As I mentioned in a previous post, I came in with the second best offer to a “slightly” higher offer on a great home that’s “the nicest in the development.” (quote from a neighbor, taken with a grain of salt) I was asked if I wanted to increase my offer and declined for reasons I outlined in the previous post. It turns out that was 100% the correct decision as the highest bidder backed out, they didn’t agree with the contingencies and I’m next in line!

There are 8 contract changes and they all point towards a speedy settlement, within three weeks, which is going to be a challenge but doable. The main points of the changes are that the sale price will be $295,000 (justification to be explained later, home inspection to be completed in three days, loan approved within two weeks, a $5,000 deposit (versus the $2k I initially put down), and everything closed before Memorial Day. There are other minors points not worth mentioning.

I met my agent last night to sign the paperwork changes to the contract and leave a $3,000 check, to be held in escrow and put towards closing costs whenever everything settles. I also found out some interesting facts that made me feel like a freaking genius (if I do say so myself). The “slightly” higher off was for $296,000 by the highest bidder with a totally cash purchase. The agent obviously went back to them and said we need the rent back until July 31st, that’s our counter-offer. The highest bidder then offered $315,000! They also probably weren’t willing to do the rent back otherwise I wouldn’t have stood a chance, their offer was $20,000 higher than mine! My hope of only winning because of the rent back succeeded and my decision to not increase the offer another $5,000 or $10,000 was wise because I would’ve just thrown that money away. A higher contract offer wouldn’t have resulted in my winning the house outright and they would’ve told me my second offer is what was necessary if I really wanted to keep the house. I’m stunned we won based on that $20,000 difference, sounds like the rent back (it could’ve been anything but it’s probably the rent back) is worth a lot to the seller (it’s their market).

Any buyer’s remorse? Not yet… I’m paying $121.41 per square foot on this property, which is within the $120 to $130 guidelines someone who had spent six months looking for a home had told me their agent said. At $75,000 a bedroom, the price comes in under the $300,000 wire. Finally, it’s in a great area. The only “bad” thing is that neighboring homes sold, within the last three months, in the $250′s so I may have a low appraisal problem. Either way, someone else believed it was worth $315,000 and I got it for a $20,000 discount.

Finally, since I’ll need to rent back until potentially 8/1, I’ll be renting a basement from my friend for a month. Check it out, I think it’ll work out great in the Rent Back Shack.

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7 Responses to “I Own a $295,000 House – Buyer’s Remorse and 8 Contract Counters”

  1. King Asa says:

    Congratulations on your new home. Good thinking on the counter-offer stuff… it was a clever speculation that turned out to be true.

  2. Murray says:

    The conventional wisdom is that you never want to buy the nicest house in the neighborhood. Buy the crappiest house and then fix it up over time – that’s the best way to earn money on your investment.

  3. jim says:

    That’s very good advice and while I don’t think I’ll own the absolute nicest house in the neighborhood, but probably in the top 10%. I don’t get the opportunity to spend money and complete the basement or put in a full bath (it’s all done)… or add on a deck, or even replace carpet or repaint. The place is pretty immaculate inside (they were having it painted when I showed up)… so in that respect, I can’t capitalize on improvements. But overall, the price is still great compared to the last place I was willing to pay $300k for… and I did beat an offer of $315,000. :)

  4. Kevin says:

    Congratulations, hope e’thing else falls in place for you. I have been following your house buying posts with a lot of interest. Thank you for all that information. Hopefully, you will get around to post named “the ultimate house buying guide” :)

  5. jim says:

    I appreciate the kind words and eventually I’ll put a compilation (with a little commentary) of all the posts so it’s like a “map” of my journey. I’ll even title it “The Ultimate House Buying Guide” in your honor, Kevin. :)

  6. nickel says:

    Jim: Congrats on becoming a homeowner.

    fivecentnickel.com

  7. Tim says:

    Congrats big guy! Now I have another person to talk about houses with!


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