Terrific Broth

The life of two scientists, creating a small home, in big mountains

Category: Life Happening (Page 2 of 9)

How We Bought Our First House – Putting Offer On Our Ranch

Week three (5.8.-5.13) – Our ranch

We, or more precisely, Slav, actually saw our ranch (😊) on the Saturday during our offer on the first house. Technically you can look other houses even after your offer is accepted, just not put new offers on other houses. At this point, our offers were not accepted (the seller passed out offer the first time), so we were completely free to tour other properties.

There were only one house we wanted to see that Saturday, and we did not have high hopes on it. We decided that I should stay home to give the dogs some much needed attention, and Slav could look at it himself with Kerry’s help. Within 5 minutes they could already tell that it was waaaay too much work and not a good fit for us. As they were leaving, an investor (people who buy houses with cash and flip them) came in, and they all started chatting about renovations. At some point, the investor guy asked, “what are you guys looking for?” And Slav told him. He said, “I’ve seen one you would like. It was an old ranch with two car garages, with a pretty big yard. The guy selling it asked waaaay too much, so it stuck on the market. It has been two months now – who knows – he might be willing to come down.”

Kerry immediately asked for the address and the contact information of the seller’s realtor, and scheduled the showing in half an hour! It is happened to be at our dream location – west of Denver, mature neighborhood, biking distance to Olde Town Arvada. We did not even look for houses there because of the high price tag. So the boys immediately headed there. Boy did Slav like it!  He was unsure if I would, because it was really dated. So he decided to “sleep on it”.

So that was Saturday. On Monday, we were bid out on our first offer, and needed to start searching again. Slav mentioned the ranch to me, and I became very curious. On Wednesday, when we decided to go to the city to tour more houses, I suggested to “add the ranch to the list” just so “I can take a look too”.

And that is it. The ranch is the first house we saw that day and I did not want to see more. It is messy and every bedroom is filled with books and clothes (they have 5 kids!) – but we felt weirdly comfortable in it, even a bit happy. Isn’t it magical? The previous house we got bid out did not make us feeling happy. And I think it means a lot.

The house is dated, but very solid. It checks everything on our list, the size, the layout, the yard, the garage, and the neighborhood. Kerry was pleased to learn that the seller was willing to drop the price from $350K to $315K, which put this house well within our comfort zone. The truth is, investors were offering $310K cash, and the seller turned them all down! We guess that he did not want to see it go to investors, but it gave us lots of confidence on what this house is worth.

We put down our offer that afternoon, $315K, as-is except for health and safety issues, and it was accepted a couple hours later. We are under contract!

Just like that, no competition, no bidding wars, just an over-confident seller and a solid house in a neighborhood we were priced out of. It is like we were not buying in Denver market at all. We got our diamond in the rough.

(To be continued…)

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This is the 4th post in our “how we bought our ranch house” series. You can find the rest of the story here:

Week one – Got pre-qualified by a broker, aka “know what we could afford”

Week two – Finding a Realtor and Learning What We Want

Week two – Our First Offer and the Bidding War

Week four – Inspection and Negotiation

Week five and six – Convincing the Bank to Buy Our House

How We Bought Our First House – Our First Offer and the Bidding War

Hi friends! I hope that you enjoy reading about our story so far on our house-hunt. Before we bought our ranch, we actually put an offer on another house. Unfortunately, we got into a bidding war and lost – maybe I should say, fortunately? Well, here is the story.

We put down our first offer on 5/5, the fifth day of our house-hunting with Kerry. It was only the end of the second week we started our house purchasing journey. And this is how this offer went down:

7:30 AM – Got up and fed the puppies. Took them out in the yard for some fresh air. They had been home alone for 4 days straight while we were out house hunting. So they were pretty bored. When they were hopping around and looking for troubles, we picked up their poops around the house.

8:30 AM  – Loaded the Kong with goodies. Filled up water bottles. Drove out. Forget water bottles.

9:50 AM – Toured the first house. Discussion, decision (not to buy), drove to the next house.

10:30 AM – Toured the second house. The house is on the big side (2200 sqft) but still within our budget. It has a killer deck and a big yard which overlooks a green belt. Slav loved the over-size two-car garage. We wanted to put an offer on it.

11:00 AM – Toured the third house. Nah.

11:30 AM – The fourth.

12:00 PM, Standing in front the fourth house, we discussed the second house again. Decided to put an offer. Kerry, our realtor drove back to office to prepare the offer (there is no time for lunch!), and we went out for lunch (shame on us) to a restaurant Kerry loved (we are so terrible).

12:20 AM – Good-luck-to-us margaritas

13:30 AM – Headed home. Got Kerry’s call during driving and said our offer is ready for review (!)

15:00 PM – Got home. Let the dogs out.

15:15 PM – Totally ignored the puppies (sorry) and went over the 10-page offer with Kerry line-by-line on the phone/computer. This was the time that we signed the contract to hire him to represent us as well. Kerry insisted to put the offer acceptance deadline at 10 pm that night, because he felt that the house would be popular and he wanted to push the seller to decide before more offers coming in. We offered the asking price, and buying it as-is as long as there is no issues concerning health and safety (a common practice here due to the sell’s market)

16:00 PM – Played with puppies in the yard. Picked up more poops. Started waiting.

22:00 PM – Did not hear anything from anyone. Had a hard time falling asleep.

Next morning (5/6)

8:30 AM – Kerry called and said they decided to pass our offer in order to invite more. They are showing houses over the weekend and only accepting offers on Monday. We did not successfully prevent a bidding war from happening. 🙁

It is worth mentioning the bidding wars in Denver’s market. It is very common for a seller to put his house on market during the week, but does not accepting offers for a few days. This builds the suspension on the houses and tells the seller how much traffic the house could get. Then on weekend, usually a Saturday, the seller has an open house, and all offers are taken at Sunday night or Monday morning. This encourages bidding wars among interested buyers, because all the offers come in at the same time, and the seller’s agent can call the best two or three offers and invite further bidding. The perfect offer usually goes beyond asking price, does not ask for any disclosure, waives all the inspections (buy completely “as-is”), gives the most time for seller to move out.

Monday (5/8)

8:30 AM. We initially offered to take the house as the asking price at $300K, but now we were in a bidding war, so we had to adjust our offer accordingly. We offered to pay $1000 more than other offers as long as it is below $320K. That means we would likely be buying the house at $321K.

As I mentioned before, this is really common in Denver now. Some sellers even listed their houses lower than appraisal value on purpose, to invite more traffic and elevate the intensity of the bidding war. Like this house, it is worth probably $310K, but not $321K. The $300K asking price baited us into the bidding war, and we would have been overpaying $10K~15K for the house at the end. I do not like this practice because even though we are looking at houses $30~$50K lower than we can afford, someone might be looking at houses close to the upper limit of their loan. They may win the bidding war, but if the interest rate adjust a little bit between the time of their offer and the time of closing, the bank may not approve the loan at the end, which will hurt their credit and their chances of buying the next house.

16:00 PM: New offer in. 10 PM deadline on the same day.

16:30 PM: Kerry called and said the seller’s realtor called. Our offer was one of the strongest, and others included $320K, letting the sellers live there for free for up to 60 days after closing, or waive inspection (buy completely as-is). Kerry is comfortable with the first two requirements, but he is less comfortable with buying a house completely as-is.

17:30 PM: Kerry called again. He negotiated with the seller’s agent again. With a new promise of 60-day rent-free after closing, our offer became one the two strongest offers. The other offer was the same price, up to $321K, with 60 days-rent free, and completely buy “as-is”. However, the buyers only had $30K down payment, which was a fraction of what we had, so their offer was not as strong as ours. Based on the age of the house, we knew that there would be some water issues and possibly radon overload. Both Kerry and we decided to not buy it “as-is”, and stop the bidding from our end.

20:30 PM – The seller accepted the other offer. We felt OK with the result. It is a good house and we like it. We just did not love it enough to risk “as-is”.

(To be continued…)

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This is the 3rd post in our “how we bought our ranch house” series. You can find the rest of the story here:

Week one – Got pre-qualified by a broker, aka “know what we could afford”

Week two – Finding a Realtor and Learning What We Want

Week three – Putting Offer on Our Ranch

Week four – Inspection and Negotiation

Week five and six – Convincing the Bank to Buy Our House

How We Bought Our First House – Finding a Realtor and Learning What We Want

Hi friends! I am coming back today to continue our story on how we bought our ranch house. We hope that providing more details of the house-purchasing process could help some first-time home-buyers feel more familiar and therefore more comfortable to the process they are going through, even though theirs might be a bit different from ours. Below is our journey on the 2nd week of house-hunting.

Week two – find a realtor and learn what we want (5.1-5.7)

We actually bought our house though a different realtor from the local one we started with. The reason is not that we were not happy with our first realtor – he was really knowledgeable and taught us a ton about the potential problems in old houses from different decades. But he only covers the mountain area where we currently live, which does not offer many houses in our price range. Anything we find below $350K in Evergreen was nearly inhabitable. We had to move done to the plains.

Our local realtor recommended us another agent named Kerry, who specializes in our region of interests. This is important because you want someone who is near where you want to buy, has sufficient knowledge on the houses built in that particular town, and also has connections in the local market. And Kerry is just the guy. He managed apartment rental properties for 10 years before becoming a realtor himself, lives in the middle of the region he covers, and is really active among his peers.

How a realtor works, or at least how Kerry works, is that he would take us to houses after houses upon our request, without any real contract between us, until the first time we put down an offer. In another word, we could have asked Kerry to show us 1000 houses, not put on an offer on any of them, then stopped contacting him with no explanation needed, and we would have not needed to pay him a penny. Therefore, as a buyer, you are really protected during this buying process.

We like Kerry’s style from the beginning – he generated a very precise search for us in REColorado with our criteria, and fed us new search results twice a day. He would go through the auto-search result first, calling people and eliminated the houses that have been sold but not yet updated, or the ones he knew there were obvious problems. Therefore, whatever houses we saw from his feed would be available and legit. This is necessary for housing market here because houses in Denver sell within 24~48 days, so the communication needs to be rapid and precise.

We had two goals during this week – learn what we like and do not like, and more importantly, letting Kerry knows what we like and do not like. We want to avoid wasting his time as well as ours, so as soon as we figured out what we do not like, we would not visit houses with similar trait again even it was a killer deal. For example, the garage. We wanted a garage for sure, and lots of older houses here have one-car garages.  They are usually cheaper and popped up in our searches frequently. However, the first time we saw a two-car garage house, we were smitten. The house looks like crap, but the two-car bay and workshop…we loved it. Immediately, we eliminated houses with only one-car garage, which cut down our daily alert list by two-third.

Our two criteria – two-car garage and a big lot/yard – helped a lot with fast-purchase. I do not know if this is unique to the Denver market, but we were out EVERYDAY touring houses. We usually get 2~3 alerts a day, including 5~10 houses. We look through them, pick out 2-3 to visit, call Kerry in the evening, and road trip next morning. It only took us 10 days like this before we bought our house, but it is definitely a full-time job and felt like FOREVER.

(To be continued…)

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This is the 2nd post in our “how we bought our ranch house” series. You can find the rest of the story here:

Week one – Got pre-qualified by a broker, aka “know what we could afford”

Week two – Our First Offer and the Bidding War

Week three – Putting Offer on Our Ranch

Week four – Inspection and Negotiation

Week five and six – Convincing the Bank to Buy Our House

Page 2 of 9

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