It's Rookie Roosts Week 2012, and we're rolling out stories from first-time buyers whose housing hunts didn't go quite as they expected. At 1:30 p.m. the polls will open, and you'll get to vote for the story that's most horrific. That story will go on to compete on Curbed National with other regional winners for a chance to win a $2,500 home store gift card—standard contests rules apply). More than anything, though, let these stories be a lesson to you would-be first-time buyers out there. Our second entry:
Last spring, as our lease was about to expire, my fiancée and I decided that if we were facing another move in the Boston/Cambridge area, after we’d paid first, last, security deposit, and realtor’s fee we were almost up to the cost of a down payment on a house; plus, with the depressed housing market, it seemed a perfect time to buy. With that in mind, we found a realtor who worked in the North Shore, and set about searching available listings in our price range. We found a great starter home in Amesbury that was set back from the road, had three bedrooms and a great-looking, dry, unfinished basement to expand into as our needs eventually grew.
We scraped together just enough to make the payment, got approved for an FHA loan and put in our offer in April. The offer was accepted and suddenly we were on our way to buying our very first home, and planning a wedding for the following summer. We just had to wait a week or so for the FHA to approve the offer for the home and put the paperwork through HUD, because of the foreclosed status of the house.
After two weeks our realtor and I started calling FHA to find out what the status was. No answer? So we called the listing agent, who did not seem to know what the holdup was either. Then we contacted HUD who told us to call FHA. Now we had gone full circle with no answers. So I started all over again: a phone call to FHA, an few emails to several people at the FHA, I even stopped into the HUD offices at the Federal Building in Boston to try and find someone who could let me know what the holdup was.
This went on for several weeks, which eventually became four months, all the while no one from FHA, or HUD would return my phone calls or emails, the realtors and listing agents didn’t have any answers either, and my time was running out at my apartment. Our landlord was willing to extend our end-of-July lease to end of August, but that was it. We were getting desperate. I even went so far as to try contacting the national branches of HUD and FHA, but no one could or would tell me what the problem was or when it might be resolved. Finally we managed to find out through the grapevine that HUD had internal budget issues, and was in the midst of resolving a contract dispute with its sales agents. In the meantime they would not be approving any new sales, but there was apparently no timeline for resolution of the issue. So here we sat in the midst of this terrible housing crisis, the government is telling everyone to buy homes, and offering incentives, and no one would take our money and give us a home.
In the meantime we had visited the house several additional times, and noticed that there was a crack in the foundation which was letting in water and creating a mold problem. However since the home was foreclosed it’s sold as is, with no fixes allowed by HUD. But our offer was accepted before this was an issue, so we couldn’t take that into consideration before putting in the offer, but we can’t pull our offer because the initial offering period had passed and the home was now open to investors, and they were already lined up behind us.
Finally, our paperwork went through and we were informed that after radio silence for four months we had 48 hours to get everything together to move out the door and to the appropriate attorneys. Finally, we were on our way.
Next step was the home inspection, the home had been winterized by a company in Georgia who subcontracts the local work, and when it had been done they noted a leak in a pipe. We needed to have the home de-winterized, and the water turned on in order to get the bank loan approved. However, the management company wouldn’t give the water department permission to turn on the water because of the leaky pipe and their possible liability for any water leaking in the property, but the inspection couldn’t be conducted without the water on, and the bank wouldn’t approve the loan without the inspection.
After many, many emails and phone calls, I had orchestrated a meeting with the water company, the inspector, my realtor, myself and the management company so all parties could be present and no one would have any liability issues while we turned on the water for the inspection. We had also gotten an approval letter from the management company for the water department to authorize turning on the water. Ten minutes before the meeting the management company canceled and the water department refused to turn on the water without proper approval.
I then spent the next week trying to reschedule with everyone, and the management company decided they would not be attending because this was not their job, and they wouldn’t approve turning on the water due to the aforementioned leaky pipe. There was nowhere to go, so I changed the date on the original approval letter, called the water department, and had them go forward with turning on the water. We had the furnace tech and the inspector doing minor plumbing work which wasn’t allowed because the house was sold as is, but we couldn’t get the thing running without a few minor repairs, so again we had to find a "work around."
The inspector noted on his report the mold issue, and then the bank said that the mold had to be remediated before the loan would be approved, but HUD wouldn’t make any repairs to the property. See a trend here? Throughout this whole process we had to work with one of HUD’s "selling agents" who would only quote their rules and regulations and refused to be flexible on anything. We were running really short on time. We only had a couple weeks left before we had to be out of our apartment, but couldn’t move into our house.
Finally, we got the bank to approve the loan as a 203b or 203k with a repair escrow. HUD promptly rejected this mortgage because the house was to be sold as is and wouldn’t do any repair, nor would they agree to lower the offer price we had in to accommodate the mold, nor would they give us any money back to remediate. But the bank wouldn’t budge either, and as timelines were running out from HUD, FHA, and our own housing we couldn’t rewrite the mortgage because it would set us back at least week, maybe two. Finally, we got the bank to approve the mortgage with a repair escrow to complete the work, but we had to pay the repair escrow out of pocket, into the mortgage so that we could have the work done and then pay the remediation specialist. We finally got approval and scheduled our closing two weeks before our lease ended.
The process was really awful and made much worse by a number of agencies that didn’t communicate with us, much less each other, and everyone taking a hands-off, not-my-problem approach. We have been living in the house for the past seven months now, though, and couldn’t be happier. We are planning our wedding and will be married in June. Maybe after that we’ll get to slow down a little, relax, and just enjoy life.
· Rookie Roosts Week 2012 [Curbed Boston]