Thursday, September 17, 2009

All sorts of good news today.

I woke up this morning to a phone call. Usually, this is one of my least favorite ways to wake up, but since I no longer have to look for a lender or a realtor, my loathing for the phone is subsiding a little. So I answered it. Turns out it was my insurance agent, asking for a couple piece of documentation regarding my master association coverage and dwelling exceptions. She’d gotten the appraisal from the lender, and suggested I ask my realtor to dig up those particular items. I promised to do so, and since I hadn’t seen the appraisal report yet, asked her what the house had appraised for.

“It looks like it appraised for $161,600. Sounds like a beautiful house!” She said.

Woohoo! My purchase price is $153,100, so that gives me $8500 in equity right out of the gate. Awesome! Granted, with an FHA loan, one still has to pay PMI until 20% of the LOAN is paid (as opposed to the appraised value of the house, unless it is lower than the amount of the loan), so this is mainly academic for me until either housing prices recover, or I pay off 20% of the loan. Still, it’s great to know for certain that I’m buying at the bottom of the market, and getting a deal.

I don’t think I mentioned this before, but when I first started seriously searching for a house, I’d saved about 10-15 listings of homes I wanted to see that fit my criteria. I had seen this particular model of home (everything I looked at was a townhome, because I specifically wanted one) before and absolutely LOVED it, but I was really hoping to spend about $130K at the most, and in July there was tons of inventory at that price point. The only reason I even went back to this particular model was because they’d posted a listing on the MLS that was about $10K lower than previous models had been listed. Of course, we got there and NATURALLY those were for models that would be built in February, not for any of their existing inventory, which was in the $150-153K range. But we looked at them anyway because I was already very familiar with them (hell, I’d been at that model 4 times already since 2006--the listing agent knew me by face). And when I saw “my” unit, I fell in love.

So I made an offer on this house, which was flatly rejected by the builder, and they refused to take any price lower than the asking price. My parents were livid at that rejection of my perfectly fair offer, and thought I was a total moron for not simply walking away because I’d already been handed the bait-and-switch with the listing prices, and considering the market, my “deal” didn’t seem like much of a deal. And I did walk away at first, but after another week of looking at another dozen townhomes, none of which were anything even CLOSE to what I wanted--except one, which had an offer on it literally in the time it took to schedule the showing and arrive 20 minutes later--and realizing that the market was increasingly picked over, I decided that the smartest thing I could possibly do at this point would be to stop looking at the dregs to find something I could put up with, and get the house I LOVED and had everything I wanted, and to do it before someone else snapped it up.

Long story short, I put in another offer for the asking price. They told me I could get incentives if I used their lender, but I’d already locked in at 5% with another lender, so I couldn’t take advantage of that (which is too bad, because they came up with a hell of a counter). But a 5% 30-year fixed-rate is pretty fantastic as it is. Plus, I have a little more peace of mind knowing that the appraisal and inspection are truly independent, something I couldn’t have guaranteed if I’d gone with the builder’s lender. Suffice it to say that the builder’s lender has been giving me the super-hard sell and kind of been underhanded about the whole thing (e.g. pursuing a deal even after I’d locked with another lender, which is illegal in MN).

So, between my parents giving me a hard time for my apparently poor homebuying decisions, looking at other townhomes (none of which were as good as “my” townhome) and all the monkeying around with the builder’s lender, the first 3 weeks of the process were extremely stressful. But now that all the players are finalized and we’re rolling toward the finish line, everybody’s relaxing and beginning to appreciate the fact that, builder assholery aside, I’m actually getting a damn nice place! Getting that appraisal was a vindication of sorts (especially since it WAS with an independent lender, who obviously had incentive to be objective) so I feel really good about that. I called my parents to deliver the good news about the appraisal, and they were appropriately positive.

A few hours later, I got a call from my insurance agent’s assistant, who had a policy roughed out for me and wanted to get my verbal agreement to draw up the papers (pending arrival of the docs they’d requested earlier). Now, a typical homeowner’s policy for a house in my price range is about $65-70 a month, and that’s what I was expecting to pay. So the agent assistant outlines what the policy covers, and then tells me that because it’s a townhome and thus covered by the hazard insurance policy required by the HOA, my homeowner’s insurance will be about $115 a YEAR. Holy shit, why so cheap? Because I only really need to insure the interior, and have my policy cover the gaps that the HOA’s master policy doesn’t cover. Awesome!

So, great! First my house is worth $8500 more than I’m paying, and now I’m paying $50/mo less in PITI. Could it get better? It could! I just googled “Hugo, MN” to see what might come up, and saw the local paper (which may or may not also have a printed version), so I clicked on that. I read a couple articles about local goings-on, then saw an article about a goof in tax assessments. It turns out that the tax assessor zigged where he should’ve zagged when planning the preliminary 2010 levy, and taxes were predicted to go up when they should’ve gone down. So property taxes for 2010 will actually decrease. Ha!

I did take a spin tonight around my future neighborhood, and I have to say that I’m a little intimidated by the idea of living so far out in the boonies. Granted, I’m only 15 miles out of downtown St. Paul, so I’m not completely in the hinterlands, but it is definitely exurban, missing “rural” by the skin of its teeth. But the area is beautiful, plus I have a college friend who lives right in the same complex(!), plus there’s a clubhouse with a gym and a pool. I’ll be only 10 minutes farther away from everyone than I am now.

Being two weeks out, I’m starting to plan the major cleaning jobs (like the stove, fridge, blinds) and the packing. I actually packed a couple boxes of books, then realized that I could easily end up packing virtually everything but my furniture in a single day, and then I’d just be tripping over moving boxes for two weeks and wondering where I put everything. So packing can wait another few days. Tomorrow, I’ll start changing all my accounts to reflect my new address. At least the advent of online bill pay means that I don’t need to worry about missing payments in transit.

Time to go dream about furniture.