I’m moving

I’m not going far — just to downtown Bellevue.

 

I started this blog over three years ago with stories of my house search and purchase. But for about a year now, I’ve been thinking about moving again, and I will finally do so next month. It’s not that I’ve been dissatisfied with my house — it fit very well with what I was looking for at the time, and it’s been a setting for many good times in the last three years. Still, it feels like it’s time for me to move on now, a little sooner than I would have expected when I bought the place.

 

But first, I’d like to point out that none of my reasons for wanting to move has anything to do with my recent… umm… house guest. Christina has been living with me for a little while now, but she has never expressed any discontent with the house or its location or neighborhood. While nobody has asked me directly, I’m sure they were thinking it or talking about it behind my back — for the record this was completely my idea, and it was in my mind before I even met Christina.

 

Location
My main reason for wanting to move is that I’ve never lived in a "city" environment, and I think I might like to try it while I still have a chance, before I have a family which might make that less desirable. I grew up way out in the country, and then as an adult I’ve always lived in suburbia. Seattle is a cool city but it would be quite a drastic change for me and a horrible commute across the lake, so downtown Bellevue makes a good compromise. Bellevue, at least in the center, is no longer just a suburb of Seattle — it’s booming into a decent city in its own right. As numerous condo and apartment towers join the office buildings, it’s even starting to develop something of a nightlife. Meanwhile it’s still very clean and safe compared to the other side of the lake.

 

My current house is in a quiet neighborhood in southeast Bellevue where a 10-minute walk will get you to a park and a small grocery store, but not much else. I have to drive to do anything. In the last few years I’ve found myself driving to downtown Bellevue very often for shopping, restaurants, and entertainment — wouldn’t it be great to be able to walk to all those things?

 

The apartment building I’m moving into is the brand new Avalon Maydenbauer at Bellevue Way and NE 4th Street, across the street from Bellevue Square, Lincoln Square, and Bellevue Downtown Park. That is right in the middle of everything! And the best thing of all is it’s on top of a new Safeway. I usually shop at Safeway anyway and having it just downstairs will be the ultimate convenience. My unit is on the second floor, directly above the produce section. :) I’m just afraid I’ll be terribly spoiled if I ever move again.

 

Maintenance
My house is old: built in 1952 with only a few minor updates. It is a quality solidly-built house for its time, but it does have some things that are in desperate need of being remodeled, fixed, or replaced. That didn’t bother me much when I was moving in because I’m pretty handy with tools and I thought I’d enjoy making some improvements. But it didn’t work out that way. While I have made some very minor improvements, most of the big jobs that need to be done (like replacing the chimney/fireplaces and windows) would require help from a contractor and the expense would never be recouped when I sell the house. Even for things that I could do myself, I’m finding I don’t have the time and energy that I thought I would. And then there’s just normal household maintenance — I can handle it, and I will when I live in a house again someday… but I’d really rather not deal with it right now.

 

Space
With my rommate moving out, that would leave me with a 3500sf 5-bedroom house all to myself and my significant other. While having a lot of space is cool, and it’s been fun, I’ve discovered that the biggest thing it gives you is room to collect a lot of junk. I could get by with a lot less — especially a lot less to clean. The apartment I’m moving into is not exactly small. It’s actually pretty big at 1350sf and 2 bedrooms. It will force me to get rid of a lot of useless stuff I’ve accumulated, which is good, but it won’t leave me really tight on space.

 

Finances
The one reason not to move might be financial. A house is supposed to be a good investment, in theory. Mine appreciated very nicely — for the first year or so. For the last two years the value has barely changed, though fortunately it hasn’t dropped. Maybe the housing market will pick up again in a few years, but I’m not going to wait for it. Meanwhile I might as well be throwing away rent instead of mortgage interest (and insurance and property tax and landscaping and high utilities and maintenance) for all the financial good it is doing me.

 

I made a big spreadsheet taking into account all the factors and variables I could think of, from the mortgage interest tax deduction to the opportunity cost of (not) investing all that money somewhere besides home equity. Unsurprisingly, what it all comes down to is a single variable that makes all the difference: appreciation. As long as houses in this area are not appreciating, I come out roughly the same whether I continue to own the house, or I rent (a fairly expensive apartment no less). If appreciation picks up again to 10% or more, well then I’d be far better off holding the leverage of a big mortgage.

 

And I certainly will own a home again soon enough. If I decide I like living in downtown Bellevue, then I might buy a condo in the area after renting for a year or two. Or if I don’t like it, then I’ll buy another house, though I don’t know where that might be.

 

So I moved in

But you knew that already, since it was over 2 weeks ago. The move was smooth and uneventful, thanks to the 2 guys and a van I hired to help. By now, the place is starting to feel a little like home. And I’m almost finished unpacking.

Now I have an endless list of projects I want to get done around the house. A few of them involve me paying to have things done, but most of them are me doing it myself. It turns out I am pretty handy when I’m motivated. The only problem is finding the time. Work is keeping me busy as always, and after sports I only have a little time left to spend on the house. But I guess there needn’t be any hurry. I’ll try to write about the more interesting projects as I make progress. Some of them I’ve already started.

Floor plan

In planning to move in, and figuring out what I want to do with the place, I did a little measuring and sketched the floorplan. Then I started playing with Visio and found it has some nice templates for easy snap-together floor plan diagrams. So if you want to know what kind of space I’m moving into, here it is. Everything is precisely to scale and accurate to +/- half an inch. Okay, so I went a little crazy with the tape measure. But the diagram and measurements will be useful for as long as I live in the place.

Yes, that is a lot of space! (And I know this because I swept, mopped, and/or vacuumed every square inch of it this past weekend.) No, I don’t know what I’m going to do with it all. But I’m moving in next Friday the 24th.

My right hand is tired…

…from signing about a hundred papers. Really it must have been close to that many. I’m talking about an inch-thick stack of legal-size papers where nearly every one needs either a signature or initials. Of course I read all of them! This was made a little easier by the fact that most of the papers for the second loan were duplicates of those from the first. Actually I did most of the reading last night, since I was able to pickup an advance copy of most documents yesterday. And some of them I had seen weeks ago. (Okay, so I did speed-read some sections that were far more repetetive and verbose than necessary.)

So the closing mostly went smoothly, though it was a couple days late because my lender was late getting the paperwork together. The draft settlement statement that I picked up yesterday had one minor omission. Remember the credit negotiated after the inspection? Well apparently somebody’s agent forgot to fax that contract addendum to the escrow company. It was easy for me to catch, since the settlement statement showed me paying ten thousand more than I expected. I was able to immediately email them a copy of the contract addendum signed by myself and the seller. Luckily that got cleared up quickly without adding any additional delay.

I should get the keys on Monday.

Update on the house purchase

The house purchase process is proceeding smoothly toward the closing date of June 1. The inspection revealed some modest defects, but that was somewhat expected since it’s an older house. I was able to negotiate a remedy with the seller which I think is very reasonable — he’s contributing some money toward my closing costs to help cover my cost of repairing the defects.

The biggest problems are the windows and the electrical system, which are just old and in generally bad condition. So before I move in next month I will have most of the windows replaced, and I will have the electrical system redone at least to some degree. And it will probably be convenient to get ethernet wiring throughout the house at the same time!

Offer accepted

I found out this evening that my offer was accepted. Assuming nothing big comes up in the inspection, it looks like I’m buying this house.

The interesting thing is, my bid wasn’t even the highest! Apparently because I had all my paperwork in order along with the loan preapproval and earnest money, the seller got a good feeling about me being the lower-risk choice. And I feel like I got a good deal!

The tentative closing date is June 1st. My apartment lease doesn’t end until June 30th, so it doesn’t make sense for me to close any sooner. This way I’ll have plenty of time in May to get everything ready to close, and plenty of time in June to move.

I took a lot of photos of the place when I went back the second time; I’ll post them here eventually.

Wating

I made an offer on the house this morning. I know there was at least one other bid, but there could be more. I should find out tonight or tomorrow whether my bid was accepted.

Potential space

I’ve looked at a few other places in the last few days that have been unremarkable, and I won’t bother describing every one of them here. But I saw one house yesterday that is worthy of comment and consideration.

I had almost passed over this house in the listings, until I looked again and noticed the quoted square-footage: 3500!! That is rediculously huge, compared to all the other houses in the area and price range which are typically 1600-2200sf. Was it a misprint, or was there something really wrong with the house that made it unusually cheap for the size? I decided it was worth taking a look.

So, the house is indeed huge, but deceptively so. From the outside it looks almost like a typical squarish ~2000sf brick rambler. The living/dining area is large and open with great windows, and there are four medium-sized bedrooms on the main level. What this house conceals is a humongous mostly-finished basement that nearly doubles the size, minus the garage which takes a small part of the lower level. But with all that space, there are several reasons the list price is not higher. There is no master bathroom suite, and the bathrooms are in serious need of remodeling. The kitchen looks like it has been recently remodeled, but unfortunately very cheaply. The two brick fireplaces, one on each level, are in very bad condition. And the garage can only fit one car.

I came out of that house thinking, "Wow, this place has so much potential!" I could do a lot with all that space. And there are many things that could be done to significantly improve the value, both to me and to future buyers. The kitchen, bathrooms, and fireplaces could be remodeled, the basement could be better finished, and there’s even room to expand the garage to a 2-car tandem. It would be fun, a chance to customize the place to my own taste more than a typical house, and I would end up with a much bigger nicer home than I could otherwise initially afford.

I’m still thinking about it, but I might end up making an offer on this house. The sellers have specified a date, May 2nd, when they are accepting all bids, so I have until then to decide. (The practice of setting a date for bids is not unusual in a hot market where the sellers are almost certain they will get multiple offers. This way they can most easily accept the highest offer, not just the first.)

I’m pre-approved!

I’m not talking about yet another credit card offer. Being "pre-approved" for a mortgage actually means something. Especially in this sellers’ market, many sellers require buyers be pre-approved for a mortgage before they will accept any offer. It saves them from the risk that the buyer might not be able to get the financing they need, causing the sale to fall through after much wasted time and attorney’s fees.

I actually felt pretty good about talking to the mortgage banker about all the options for setting up the loan. Since I’ve done my homework, I know all about interest rates, points, PMI, 80/10, 7/1 ARM, etc. And I know the basic formulas they use for deciding how much they think I can afford. So I was pre-approved for exactly the loan type and amount that I already figured out I needed. (Ask me if you want to know details.) This means the bank is sending me a letter promising that they will loan me this amount of money on these terms at whatever is the going interest rate, as long as my chosen home appraises out in value and nothing drastic happens to my credit situation. Now I can shop with confidence!

Saved from my impulsiveness

Being in some ways a stereotypical male, I don’t tend to do a lot of shopping around for anything I buy. While I may do some thinking and research ahead of time to figure out what I want, the final purchase is usually rather impuslive. One day I will decide I want something, then I go out and get it, without any second-guessing or too much shopping around for different brands/models/prices. This has been true for the two times I have bought a car — I didn’t even bother test driving any models other than the one I knew I wanted. (Was my one test drive subject to heavy confirmation bias? Probably.) Fortunately I have never had a case of buyer’s remorse for a major purchase. Maybe I’ve always done the right research, or maybe I’m just blind to what I could have had instead. Either way, it has worked well enough for me so far.

When it comes to buying a house, I think that kind of impulsiveness could be both bad and good for me.

After looking at the first three houses yesterday, I realized that one of the three had basically met all my requirements and was a place that I could easily see myself living in. It even had a price that was comparitively affordable. So what was I waiting for? I had found what I wanted, so why not go get it? This afternoon I emailed John and told him I’d like to look at the house a second time, this time going over it in more detail before I decide to make an offer. He called me back and we agreed on a time to meet there.

Would I go through with it? Would it be crazy to make an offer on a house after only looking at a grand total of three? I don’t know, and probably but it doesn’t matter anymore. Because for better or for worse, fate saved me from my impulsiveness. A few minutes later John called back and told me he just found out that house had sold the night before, only a couple hours after I had looked at it. I was disappointed but honestly relieved at the same time.

The house had been on the market for all of three days. It was first listed in the MLS on Tuesday, and sold on Friday. Was it snatched up so quickly because it was underpriced? Possible, but unlikely. The real estate market, especially the Seattle eastside, is just that crazy right now, absolutely a "seller’s market" to the extreme. Houses typically sell in under seven days (very often with multiple competing offers), so three days is nothing unusual.

This doesn’t mean sellers can get away with overpricing a house: there is so much good information available these days that buyers (or their agents) can accurately determine what a house is worth. So an overpriced home could stay on the market for a long time without selling. For the same reason, it’s unheard-of to find a house that’s underpriced: any halfway competent seller (or agent) would set a list price close to the limit of what buyers will pay. That’s why I don’t believe the house I was interested in sold because it was underpriced.

So, in this market where the housing inventory is turning over so insanely fast, buyers don’t have much time to consider a house before it’s gone. When the right house comes, I’ll have to decide quickly… one might say impulsively. It’s a good thing I’m not married!