02 August 2009

Let's Back Up a Bit

A lot has happened since we started down the road to building this house just a couple of months ago. But I suppose the beginning of this story is further back than that.

As you may know, Steve went back to graduate school in 2002 and worked dutifully on a PhD for many years. We had been living in our condo since 2000 and planned to sell it as soon as Steve finished his degree, which happened to coincide with the economic downturn last fall. While Austin's real estate market has remained fairly strong, it has been especially hard to sell condos since the lending requirements severely tightened up after the rampant condo-building and -buying (and -foreclosing) of the last several years. I think a large segment of would-be condo buyers stopped looking altogether because of the perception that loans simply weren't available anymore. In actuality, it just got harder to find complexes that qualify for financing. (A big roadblock in many complexes is owner-occupancy rates. Fortunately, our complex has remained largely owner-occupied since it was built, so that wasn't a problem.)

Anyway, putting our house on the market at the end of last year wasn't ideal. However, we knew it was a great unit in a great complex in a great neighborhood in a great part of town, and we knew that the right buyer would love it. It just took longer to find that right buyer than we expected. We had countless open houses and advertised it in every way we could, until finally an adorable young couple came by one Sunday and couldn't stop gushing about how much they liked it. Then they called to ask about property taxes just minutes after they left. Then they e-mailed later that day with more questions. A few days later, the initial offer came. After a few weeks of negotiations (he is a lawyer, too -- which was actually really great, as we very much "spoke the same language"), we had a contract that we can't help thinking was really advantageous for both parties.

I had started casually house shopping last summer. We weren't planning to buy anything until we had sold the condo, but we did want to get a sense of what was available and at what price. Unfortunately, nothing was very inspiring. Our chosen neighborhood, just across a main road from our old neighborhood, was developed in the 1960s, and most of the houses really reflected that era. We were anticipating buying something that needed work, but we had paint, flooring, and cabinets in mind. These houses were constrained by 60s floor plans and wouldn't be very comfortable to live in without much more extensive work. (We were kind of spoiled by the condo, which had tons of really usable storage space in its 1200 square feet; most of the 40-year-old 1800 square foot houses we saw just didn't seem as livable.) By the time we were close to selling the condo, I was beginning to think that renting for a while might be a better option than buying something we weren't excited about. Fortunately, while we were in talks with our eventual buyer, a house three blocks away, which had had a fairly severe fire in January, was put up for sale. On a bike ride one weekend, we stopped and looked in the backyard. Steve went first (I stayed in front with our bikes) and immediately fell in love with the lot. (It's 80'x130', just shy of a quarter acre.) It seemed to be priced with the expectation that the buyer would rebuild the existing structure. While that was theoretically possible, various factors would have made that difficult. Over the years, we had toyed with the possibility of buying a few different properties that caught our eye, with thoughts of renovating to varying degrees, but the timing was never right. This time it was, although the prospect of tearing down a 2,000 square foot house to design and build a new one was far bigger than anything we had previously contemplated. I called the agent to ask if the seller would consider a significantly lower offer. He suggested writing it up so he could present it, so we did. Then we began looking into financing. This turned out to be much harder than we expected. Traditional lenders wouldn't give us a regular home loan since the house was uninhabitable, but they also wouldn't give us a lot loan since there was a house on the lot. Ultimately, though, we concluded that the difficulty of finding financing worked to our advantage, as other prospective buyers may have been deterred by the challenge of finding a non-traditional lender. And ultimately, we negotiated a price that was much closer to our first offer than to their asking price -- roughly the value of the land minus the cost of demolition.

Then we had a 20-day option period to research, investigate, and determine whether this was really a good idea. We began looking for architects, builders, design ideas, construction financing, etc., and exploring Austin's building processes. (More on these topics in later posts, I'm sure.) As we talked to more and more people, I kept waiting for someone to tell us that we were dreaming, that we were too young to do something so grown-up, but no one did. We started a Google document to assemble ideas, internet links, and contact information for the team that we were quickly putting together. There was so much to get done that I was routinely waking up around 3 or 4 am to do various tasks. Some nights I'd work for about two hours and then go back to sleep; other nights I'd just wake up and research different things online for a while before work. Either way, the odd hours and lack of sleep didn't seem to wear on me. The excitement of what we were doing kept me going.

Around this time, we were also starting to think about where we were going to live if our condo sale actually went through. (Working where I do, I know that real estate transactions can fall apart for a million different reasons, so I didn't consider it sold until it really, finally was.) The prospect of moving was huge. We hadn't moved in 9 years. We also had a 10x10 storage unit of things we had packed away to stage our condo. We figured we would keep the storage unit and get a two-bedroom apartment to live in during construction, but finding a place from the world of apartments in north Austin was too big a task for me, so Steve took over. He made a few calls but didn't find anything very appealing. Everything was also more expensive than our condo (or equally expensive but wouldn't be paying down principal on our loan anymore).

This entire sequence of events, while stressful, has been so fortuitous. Finding a buyer at the same time we found a great opportunity to build in our preferred neighborhood was incredibly lucky. The next piece to fall into place was equally lucky. At the grand opening of our neighborhood's new library, Steve ran into a friend from grad school who, through his own extremely unlucky series of events, had a house he was about to rent out. It was much larger than we were looking for (4 bedrooms and 1600 square feet, plus a garage) and cost more than we wanted to spend, but he was willing to reduce the rent considerably for us. We were happy to spend a little more for a more comfortable house, where we would be renting from a friend on flexible terms, close enough to our new house to keep an eye on construction. We were also able to get rid of our storage unit.

So things were moving along, and it looked like everything was on track, but I was still keenly aware that something might derail our whole perfect plan. While I can't speak for Steve, a cloud of stress loomed over me throughout the month of June, and time seemed to stand still as we inched toward closing, moving day, etc. We began to arrange for a moving truck, looked into transfering utilities, gave notice at the storage place, and started to plan for when life got back to normal(ish) after the move. One day, I was looking online and found two supercute bunnies at the animal shelter. I sent the link to Steve with a note that we should look into adopting them after the move, but he immediately jumped to action, called the shelter, and applied to bring them home. The couple of days while we were trying to adopt them only added to the stress, as we weren't sure whether they would be ours until we actually got them. Between the sale of the condo, the purchase of the new house, and now these adorable bunnies we wanted so much to bring home, we were like kids on Christmas eve in the twilight zone, full of anticipation of what was to come but yet unsure our Christmas morning was actually going to arrive. At certain moments, it was just TOO MUCH. Eventually, though, after jumping through way too many rabbit rescue hoops, the bunnies were ours! (Pictures to come.)

The final days counting down toward closing on our purchase were similarly stressful, for reasons not worth getting into, and again, it wasn't until we were actually there with our really big cashier's check (about a week later than we originally planned) that we knew we really were going to get the property.

We left closing with the giddiness of first-time homebuyers who were finally getting the keys to their new home, but in our case, there were no keys, because there were no locks, because there were no doors. Our new house had boards covering all of the doors and windows -- and not all that securely. I went straight to Lowe's to buy more "No Trespassing" signs and a lock to secure the side gate, and then I headed to our insurance agency to stock up on various kinds of liability coverage. After all, what we had bought was a huge hazard and significant liability (albeit a huge hazard and significant liability sitting on our ideal lot).

I had the day off, as well as the following week to pack and move, and we started with the storage unit that day. I'll spare you the details -- moving is moving, right? -- but I will say that touching, packing, and carrying everything one owns forces a person to confront his or her materialism. If everyone had to pack up all of their possessions, carry them outside onto a truck, and then back inside every few years, people would absolutely have less stuff. If everyone had to do this in July in Texas, people might stop buying stuff altogether. We are definitely getting movers when the house is finished.

The sale of the condo was probably the smoothest part of the whole process. We signed the day before the buyer did, and we were actually in Philadelphia when everything went through. I had the opportunity to go back to the condo this week to pick up some mail that wasn't forwarded. What a surreal experience, standing on my own front porch, ringing my own doorbell, waiting for someone else to open my own front door. It was exciting when they did, though, because it looked great and the buyers seem really happy with their new home. They even said that they weren't planning to make any changes because they loved everything we had done to it.

This was a long post. But it was a long process to get to where we are now. The three months this specific plan has been in the works belies the complexity of everything that has had to happen to get us to this point.

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