The Purchase!

Money Money Money Money. That's what it takes. I've always said to myself "No way am I ever getting a mortgage", :::insert foot in mouth:::: I've always been, well, cheap. I started selling bait when I was six years old, and have been a pretty good saver ever since. Now the game is more complex than just a coffee can loaded with singles.I'd always imagined buying the cheapest piece of land I could find, squatting for several years until I saved up enough demolition debris to build a house. Maybe mill some lumber if I was fortunate enough to have trees.

Right around Christmas time (2009)I decided I was going to go for it. A couple of friends had recently bought houses and got a decent loan and of course the tax credit. So where to start? www.Realtor.com was a good start. It lets you get an idea of what market conditions are like in your area, whats available for how much.

Then I started thinking about what I really wanted out of my purchase. I wanted land. That was a given. The area I was looking in, was rich in land and nothing else. Ideally, it would be fully or partially forested (not too heavily harvested in the past 15 years), and fairly high and dry. Shelley hinted that she wanted to live by water, pretty much any water would do. Doesn't sound to unreasonable, but in this area of the country* it is. Poor logging operations and low wet ground is extremely common here. There was lots of land for sale, problem is it was either swamp or heavily high-graded. Since I've developed a bit of a life sense I first started dreaming about buy property, I've acquired some... realities. The squatting, build it as you go method, is great for some people and it would have been great for me if some things were different. That scenario would require:
1.) Time
2.) Adequate $$
3.) Minimal possessions, or minimal need for them
4.) An understanding special person or a single lifestyle

I had gotten a good job a few months earlier that kept me pretty busy. That means no time (strike 1). I was pretty sure I'd get financing... for how much I wasn't sure. Enough I thought. But if I were going to go the squarer route, the hell with a mortgage. Loans are harder to get with "unimproved" land, and consequently have lousy interest rates. Besides, paying for building materials while I paid off a loan might be difficult. Worst case scenario I'd have to rent an apartment at the same time. That would be a LOT of money to put up. And who knows when I would finish the house. I have a good job, but not that good. So essentially, not enough $$$ (strike 2). When I graduated college, I had few enough possessions to get up and move all with one load of my pickup truck. Only a year later I had about two pickup loads. Now I had about 3, not including my 5 boats**. Not only did I have stuff, I also had company equipment (requiring electricity and internet access no less). Plus, Shelley has even more stuff than I do (Strike 3). If I gave a damn about baseball, I would be out. But since I don't, lets keep going. Speaking of Shelley, that brings us to number 4. This one I have. Kind of. Shelley is defiantly understanding and its pretty good at roughing it, but she has an online business (Shelley Creates) and needs the internet (as do I), and needs some place for all her stuff too(strike 3.5).

So I sat down with Shelley and tried to figure out what we were looking for. Besides the land (10 acres or more), we wanted some kind of structure, to keep most of our stuff dry, and have a relatively ready to go place to work and live. I was comfortable with a trailer/mobile home, Shelley wasn't so thrilled, but willing. So maybe a camp-like building would be great. In other words, a small stick built structure, preferably suited for 4 seasons, and mold free. I'm allergic to mold and cats. So cat free too. Then we would build or add on at our leisure. We didn't mind a run-down house as long as the price was fair. Like I said earlier, Shelley wanted water. I was impartial. I like water, especially the ocean. But I always assumed living by the ocean was out of my budget. So if we got water, that would be a plus. I wanted it to be within an hour of where I worked. Which is pretty far, I know, but its pretty standard for around here. All for around 100K or less. That wasn't the budget, but it was a target. If it ended up being 40k, that would be great. Basically, we weren't picky, as long as it was a good deal, and was livable.

In the mean time I had purchased a few home buyers books (see below) and figured I better start looking for a Realtor. I went to dorky route, and followed the books advice and set up interviews with 2 Realtors I had narrowed my list down to. I was inclined to look for a Buyers Broker, someone I knew would really be out for my best interest. There aren't many around here, but we did find one. And she seemed very nice, but it was a little hard to talk to. The other Realtor had her GRE certification, and was very easy to talk to. We thought the comfort thing was very important. You don't want to be nervous around your Realtor, you want to be able to let her/him know everything want in a house, and any other concerns. It was also important that the company she worked for didn't have a big monopoly on the real estate in the area. If she did, then the chances of us falling in love with a property where she or her company represented the seller was high, meaning our relationship would change because of her interest in the success of the seller.

So we started looking at houses! We bought the first one we saw! Well, we looked at 2 others afterward. Odd thing was, the house we bought wasn't really what we were looking for. It just felt right for some reason. I'm defiantly not in the advice giving business, but I would have to say going with your gut is a good idea.

The house was much bigger than I would have ever expected to buy, 1500sqft. It didn't need any adding on, or major repairs. Just cosmetics. The building our own house idea went out the window. We are 500 feet from the ocean (no shore frontage/view), 24 acres of mature forest, and 12 acres of hayfield/yard. The interior just needs some finish work, but is loaded with custom quirky carpentry work, old light fixtures, plumbing fixtures (including a claw foot tub), and new traditional plaster work. The kitchen alone has 11 different species of wood!

So anyways, the money. Lucky for us the economy sucks and I have a job. I snagged a 3.99% fixed 30 year loan! Total cost $122,000. 18% down, with the balance of the remaining 2% to make an even 20% when we get our tax credit money (so we don't have to pay PMI anymore). Sounds like scary stuff. It did to me at least, but the whole proses was easier than I thought. Not only is it a good rate, monthly payments of around $500 is not bad. That's cheaper than what I was paying in rent.

Anyways, needless to say we are very happy with the house. I think it is going to be a really good investment compared to anything I could have built. This is in a relatively undiscovered area, and the population has been on the decline since the early 1900's, and I'd like to to see it stay that way. But its inevitable. To see my investment increase in value over time will be nice. I look forward to adding to its already 120 year history.

Books:
Nolo's Essential Guide to Buying Your First Home (book with CD-Rom & Audio)
Home Buying for Dummies

* For the time being I'm keeping my location secret. Obviously some of you already know where I live, but don't want to encourage anyone else to come live in the area! I have enough neighbors.
** I'm sure there will plenty of future posts about my boats.