How It All Began, Part II

So we submit an offer. Because there are multiple offers, the bank that owns the property comes back asking all parties to submit their "highest and best" offers. So we up our offer a little and submit it. The good news is: the bank rejects the other offer. The bad news is: they counter our offer. So we counter back and forth two or three times until we finally have the house under contract. We think the worst is over. Ha!

We proceed with our loan app, while continuing our due diligence in finding out everything we can about the house. Everything is going along fine until the bank sends their appraiser out. Because the house is uninhabitable, the appraiser refuses to put a value on it, and our loan falls through. The bank tells us that even if we get another appraiser to put a value on the house, their underwriters won't sign off on a loan on this house. In order to preserve our earnest money, we have to withdraw our offer.

Next step: we regroup and decide to inquire at the well-known national bank that both owns the house and that we have our current mortgage with. The worst they can say is no, right? Well, they don't say no. The lender we talk with tells us the problem we had before was that the previous bank tried to write the loan as a residential loan, when it should have been written as a construction loan. They will not only write us the construction loan to bring the house house back to a liveable standard, but will then convert the loan to a permanent mortgage once the renovation is complete. In the meantime, we will work to get our house sold, but can hopefully time it so we can continue to live in our current home until the new house is ready to move into.

The only fly in the ointment at this point is that we no longer have the other house under contract. We go through the process of offers and counteroffers again, and a couple of weeks later, we're under contract again. Hooray!

The summer progresses, school starts again, and our closing date is rapidly approaching. Everything seems to be going great, and then Fannie Mae and Freddie Mac implode, and a whole slew of new regulations come down the pike. Our closing date comes, and we still don't have final loan approval. We ask for and get a one-week extension. During that week we learn the bank will no longer underwrite our loan unless we sell our existing home first. Because we had been planning to live there until the renovations were done, we had not been trying all that hard to sell our house. The extended closing date passes, and the house slips from our fingers once again; this time our earnest money goes with it.

At this point, we are both ready to say screw it. But then we realize that we also owe our contracter a substantial sum at this point for the plans that he has drawn up, so we decide to hang in a little longer. As long as the house is still on the market, we will continue to try to sell our house. If the other house sells, we'll pull our house off the market, cut our losses, and stay put. About three weeks later, we have an offer on our house! Now, what?

We call the listing agent of the farm house to tell him, and discover that the tight market has forced him to leave real estate and go back to a more steady line of work. Too bad. He's a nice guy, and he really tried hard for us. We contact the agent that brought us the buyer on our house and ask her to represent us as we try a third time to put the house under contract. Again, there are multiple offers. Again we have to bring our highest and best. And again, we finally prevail. The house is ours again.

There will be a few more bumps in the road, including our lender demanding an extra $10,000 down payment the day before closing. On November 24, nearly six full months after submitting our first offer, we successfully close. Let the renovations begin!