Good Renters Make Great Owners
“I’m thinking of buying my first home.” Admittedly, this is probably how a lot of renters start moving from leasing a place to owning a home. Adam is ready to move from the world of renting to owning.
Your Real Estate Referrals To Me Mean The World
I met Adam through a past client. Come to find, he and my clients Chris & Jody are really good friends. They share a passion for live music, good craft beer and a love of animals. A couple of months ago Jody introduced me to Adam. He was thinking about becoming a home owner.
The first time we met, Adam told me, “I’m ready to get my first home Bob. But I want to keep my options open and interview a few agents.” This sounded reasonable to me. We had coffee outdoors at Lafayette’s Cannon Mine. Great place BTW. During the course of the conversation Adam mentioned he really loves the town of Lafayette. Low key, nice selection of craft breweries, convenient.
Home Searches And Showing Property Comes Next
I start sending some helpful info along – about mortgages, what to inspect at the home inspection.
Adam also felt he was likely to wind up in Brighton or some point to the east. Mostly based upon budget. For me, Brighton sounded like a long commute and a completely different vibe. But, the client is always right! I set up a search ranging from Boulder County to Brighton and everything in between.
We found a great fixer upper in Longmont, started to investigate making an offer and subsequently learned the property was unwarrantable.
This doesn’t mean what I thought it did. Turns out, if a community has too many units owned by one person or entity, it can be unwarrantable. There are options to work around this, however Adam was also using a Chafa mortgage to purchase. Chafa financing allows a home buyer to bring as little as $1,000 to the table. Everything else is covered by your loan or the seller. Wish I had known of that when purchasing my first home.
So, our first opportunity was a bust.
Adam texts me on a Sunday (Millennial home buyers love to text). He’s spotted the perfect place. We hustle out immediately and I ask him if he can see himself living there. “Yeah, this is going to be my first home.” I suppose you can stop reading right now. Except, after this everything did change.
We wrote a strong offer, but not full price. Call it Realtor intuition. I knew we could get the home for less than list. I pointed out a few red flags. In fact, I always point out both the good and the bad. It says in our Buyer Agency agreement that I’ll tell the home buyer about any material defects I’m actually aware of.
First, I googled the location before heading over. And I noticed that the satellite photo showed the pretty lake nearby as a big dirt mining pit. And when we walked around the community I noticed lots of big yellow construction gear on the other side of the lake.
So while Adam was excited and seeing a great lake to walk his dog around daily, I saw a big pond of water hiding a potential industrial site. We were both right probably. One has to remember. We had first met for coffee in Lafayette, part of Boulder County, a community with strong building codes and rules and regulations. Now, we’re out in Brighton and it looks pretty on the surface, but this is part of Weld County. A community that fully embraces fracking for oil.
Secondly, as we submitted our offer and got a counter, the Seller was adamant about separating the mineral rights. This raised a red flag for me.
What would be a concern for you? The roof? An older hot water heater? These systems can be repaired or replaced. They have a lifespan, it’s not really that scary. But, the mineral rights suddenly being severed, that means this Seller will always have an interest in the land. Come to find out, the seller was receiving monies from a mineral rights lease. An active lease, in Weld County, with construction gear nearby: this is fracking.
Home Negotiations End
Now, I’m all for America being energy independent. But I’m not so in favor of having fracking under my first home nor yours. The listing agent of course thought I was nuts. He gave me all these arguments and insisted my client sign the counter offer. Adam of course didn’t sign that counter. In fact, last I checked, that town house never sold. Instead, I saw an opportunity hit the marketplace in Lafayette.
My First Home Fixer Upper
Priced fifteen percent lower than similar sales, a two bedroom two bathroom townhouse hits the market on a Tuesday night in November. I set a showing for Adam and we see that place inside of the first two hours it has been on the Multiple Listing Service. To put this in perspective, the place isn’t even showing up on Zillow yet when I set the showing.
I bring a flashlight because its a vacant fixer upper and its a moonless dark night. But right off the bat, I start getting some good vibes.
Is That A Nosy Neighbor Or Caring Neighbor
As I arrive early (to turn on the lights and turn up the heat), the neighbor peaks out and we have a conversation. I learn that the last tenant was a bum, the owner hasn’t lived there in a few years and the neighbor doesn’t even realize the place is for sale. I also learn she has installed security lights, cares about her home and cares enough to come outside when someone is trying to enter a vacant home at night. This is a good sign. Good neighbors make good homes!
I’ll be honest. I was a little shocked at the condition of the town house. Horrid carpeting. One wall was painted a garish red. The dishwasher was missing. In other words, this is truly a fixer upper.
Outstanding Dream Home Feature
There is though, an outstanding feature. Most of the places on Cleveland Circle have a single or double carport. This home has a two car detached garage. This is a stellar extra feature. You can safely store bikes, dog leashes, snow boards, myriad belongings and of course two warm, dry snow-less cars in that garage.
And this home is in Lafayette. It’s walking distance to that coffee shop where we first met just a few weeks prior. (yeah, once we started looking at homes and making offers, things roll along briskly). The home checks all the boxes: Lafayette, pet friendly, FHA/Chafa acceptable.
Getting Under Contract Before Anyone Even Knows The Place Is For Sale
We write and execute a contract that evening. The seller will net full price with our offer and subsequently the buyer will have no closing costs and only need $1K to close. It’s a win for everyone.
During the home’s inspection, we renegotiate the terms. This is a great strategy for my first time home buyers competing for a house. We get a brand new dishwasher, with a stainless steel tub (much quieter than plastic) installed. The seller addresses a laundry list of plumbing and electrical issues. Everyone is happy.
The Best Deals Are A Win-Win
What sets this story of, “I bought my first home and lived happily ever after” apart from others is it is a win-win for everyone. The seller got her price. The buyer is in his preferred hometown. The transaction closed quickly.
Bonus for the home buyer, the appraisal came in significantly above the sales price. Bonus for me? Adam and I hit it off. We decide to do a Santa Paws event a few weeks later at the veterinary clinic he manages.
Electrical Issue Strikes Post Closing
I follow up with Adam post closing – I follow up with my clients for a year after you find your home. It’s just smart business. In any event, I discover the buyer can’t get any of the outlets to work in the master bedroom. I had an electrician friend visit the house, found a loose ground in the panel and corrected. My clients will tell you: I go above and beyond, before, during and after you purchase your home, whether you are a first time home buyer or this is your 12th real estate transaction!