On March 12th, Monica and I closed on our first home. At least that€™s according to the official documents. If Shakespeare were alive he€™d probably write ‘the course of house buying never did run smooth and they will try to screw you and our experience was no exception. What followed was the absurd, the often comical, and a somewhat dumbfounding real estate lesson. This is part one of a two part series.

After a fair amount of research we knew that prices would continue to fall into 2008, and we decided to bid accordingly. Thought not necessary, we decided to get a pre-approval from Countrywide, our lender of choice. When we came in to ask for the pre-approval, the reps first question summed up the current housing situation: do you have any money to put down? We were putting down no less than 10% no matter what, and with a sigh of relief the rep said ‘you just made my life easy.

With pre-approval in hand, we set out to find a house worthy of a bid. Looking at houses had become somewhat of a problem; while I didn€™t want a realtor, it was apparent actually looking at houses was somewhat difficult without one. Monica and I eventually settled on Karen, whom had shown us a few houses she was selling and seemed straightforward and nice.

Trying to sell us both on a house was a tough proposition; I was absolutely brutal on everything, from price and taxes, down to nit-picking a houses€™ defects. I drove Monica crazy. We looked at hundreds of houses in November and December, and while that may sound like an exaggeration, I can assure you it is not. The sheer volume of houses on the market was staggering; by my rudimentary calculations, there was over a 12 month supply on the market in the area we were looking at. All of this worked in our favor, and we were going to exploit it.

While we walked away from the first house we bid on after the builder wouldn€™t budge on price (too many houses on the market to not give), we found a house in a similar area. It was a foreclosed home, had been on the market for nearly half a year with little interest. The realtor had sent the listing to us a month prior, but I had shrugged it off. The listing did little to sell the house and it was a poor attempt at marketing by the selling realtor. One picture, basic stats, and the words ‘great buy’ in the description. Asking price wasn€™t close to going market rate by any indicator and it wasn€™t the least bit surprising that they had no bids, let alone lookers.

Upon looking at the house, it was actually quite nice. The house had it share of upgrades, including such things as granite countertops, dark hardwood floor, upgraded carpet, CAT5e wiring throughout and built in surround sound in the living room. With a three car tandem garage and over 2600 square feet of space, it was worth the look.

For it€™s strong points, the house had it€™s weaknesses. The surround sound was wired, but the speakers had been removed, leaving gapping holes in the ceiling. The house was wired with CAT5e, but wasn€™t networked; the main network panel containing networking, phone, and video wiring was a disaster. The backyard was a barren landscape as were a few ceilings, as fixtures appeared to be missing.

Some people would have passed; we saw it as a house that had been barely lived in with some minor problems that could be resolved. There were other families around with young kids, and an elementary school was being planned to be built within walking distance. After some back and forth, we decided it was bidding time.

The price they wanted was high, well above everything else in the market that was comparable. We bid 20% less than asking. It was at this point that things started getting odd.

Our realtor had been in touch with the selling realtor over the weekend to see if there was any interest. He had told her no. On a Monday in January we submitted our bid, only to see the house re-listed at a lower price the same day in an attempt to drum up bids. Not unheard of and we weren€™t concerned. The next day, we€™re told they have two additional bids that had come out of the blue after no interest; the selling realtor claims the lower price is what magically drummed up interest. We€™re skeptical of this claim.

A week went by and the bank reviewed our bid and counter-offered. It was at this point that the push begin. The seller wanted to close quick, by February 15th. Our realtor tried to get us to commit right away, as she told us the other bids were most likely to be considered if we didn€™t sign and we might lose the house. This did not sit well with me; if they already had other two other bids then why counteroffer on ours? Monica and I discussed the issue; the counteroffer was good, below even the revised asking pricing they had been trying to drum bids up with, and while not quite 20%, it would suffice.

We called our realtor, told her to tell them yes and to send over the paperwork. We could close by the 15th given our current loan status, and we had cash in waiting. Only thing they had to do was send the paperwork. What proceeded to happen was anything but a smooth transaction.