Blog: R.E. Tales
(Hey, they all can't be pretty...)
I bought a house Tuesday. Boom, just like that. I learned of it Sunday, visited it Monday. It was an on-line auction, which I don’t like, not one bit. My visit yesterday gave me a list of repairs needed. I totaled that and added a bit for good measure. Then figured what I could sell it for if the repairs were done. Then I took a set fraction of that figure, subtracted the repairs estimates from it, and the remainder was the maximum I could bid. The fraction figure I use gives me my profit and allows for cost over-runs, taxes, insurance, and unpleasant surprises, which always happen.
It was listed starting at $15000, but by the time I got around to bidding, it was at $25000. I’ve bought enough from eBay over the years so I know how it goes. You don’t really get serious about bidding until the last seconds. Then, you get your bid in and hope that no one else can get in a higher one in the time remaining. Well, the auction folks knew that too and after I made my bid, the clock automatically jumped back 2 minutes, giving someone else a chance to top me. Which they did. Then someone else started bidding and I let them duke it out for a while. At each bid, the clocked jumped back. Then I noticed the seller’s reserve had not yet been surpassed, so all the effort might be in vain. Finally, I bid once again, figuring that I had one more after that left in me before I hit the point where I would not bid further. When I did, I noticed the seller’s reserve had finally been met, making it an absolute auction and then it ended, all at once, with me the winner. So, now I have a winter/spring project, getting it into shape. As if there was nothing else to do. And I’ll have a 3 acre lawn to cut later on.
Their rules are that once the auction has closed, I have just 2 hours to sign everything, provide proof of funds, and wire the money to them – but I couldn’t start any of that until they contacted me by phone. And that took just about an hour to happen. Good grief. What happens if someone has to work and has to do things like this in their own time? And my bank doesn’t send wired money after 2PM. When they called, they were not so strict, a relief. But still, you have to worry, because the written rules state otherwise.
I spend all that afternoon, signing and getting their 27 page contract back to them, wiring the earnest money deposit, emailing the proof of funds, and doing all the administrative stuff they demanded. These foreclosure sales always have onerous terms for the buyers, ones strongly favoring the sellers, and just barely fair to the buyers. This one took the cake. These banks do not care too much what they get, but they care that they get something and won’t take chances of anything falling through. As a buyer, I have to put up with their crap to get steals from them. This one was not a steal, but I’ll make money.
Then yesterday, they called and it seems like I had missed 3 spots where they wanted my initials. And they wanted a month newer bank statement than the one I’d provided. I sent that, but they didn’t like the date, so I had redo it a third time. . I have a POA with Janet (and vice versa) and as she wasn’t here, I signed for her, as I often do. The POA is filed in several counties and they wanted copies of everything. I don’t have copies, at least not ones easily found. So… we started the process again. Printed 20 some pages of contract, signed everywhere, and faxed it back to them. Sending the fax took 45 minutes, just like the first time.
They can give me a Quit Claim Deed. That’s the lowest form of deed in NY State. I can give you a Quit Claim Deed for your own home; all it means is that I relinquish any claim I might have to it. Easy to do if you don’t own it. They are normally used in two instances. One is to settle a potential claim. We have a Quit Claim here at Rocky Top from the neighbor. Apparently the chain of succession was unclear at one point (someone died without a will or something). We all knew what we owned, but the lawyer didn’t. So we got a Quit Claim from the neighbor and all was good again. The other instance they are commonly used is when the County takes a property for back taxes. I guess the County doesn’t want any repercussions and is covering its ass that way. But they normally do a proper job and I don’t worry too much about the title to something acquired this way. I don’t like it, but I acquiese. (If I don’t like it, there’s no other choice – other than not bidding.)
Or, alternately, the Bank who owns this home will give me a “Special Warranty Deed” if I buy title insurance. Title Insurance is a one-time purchase and it lasts as long as you own your home. The title company will defend you against all claims and will indemnify you if they ever lose (they don’t lose). Increasingly, it is considered the hallmark of title marketability. I usually do not buy it: what’s the point of a lifetime policy on a property I will own for a year? But this time I might.
Now, the “Special Warranty Deed”. Foreclosing banks frequently offer these. But no such thing exists in NY; the State does not recognize them; they are not valid. I asked the auction folks about this; he sounded puzzled and had to speak with his supervisor. He came back and said I’d get that or “its equivalent”. OK. I asked 2 lawyers for advice. One had never heard of such a deed (despite me having mentioned it to him some years ago in another transaction), but said to get the insurance. The other said it would be the same as the Bargain and Sale Deed. Bargain and Sale Deeds are the second highest deed form and are routinely used in NYC. I have never understood why NYC doesn’t use the normal Warranty Deed that the rest of the State uses and it has led to a number of NYC bigshot lawyers eating crow when clients buy up here. They’ll demand a Bargain and Sale Deed, then, later, remember that the Warranty Deed we’d offered was better deed.
Anyway, this place has a very nice outside appearance and is in an absolutely great area. It has a pond too. The bank thought it was occupied and insisted that no one could set foot on the place. They expected someone to buy without an inspection. I drove up to see it Monday and saw no marks in the snow on the drive, so walked up to the door. After all, the bank’s not there, watching. The door was unlocked, so I went in. Two sofas and a chair were left, abandoned, probably too big to fit with the new reduced circumstances of the folks who’d lost the home. But it was otherwise pretty clean of belongings and was not trashed. I can’t say either about most places I get.
Inside, I was shocked to find not one but 4 original Rumsford fireplaces! On-line tax info said the home was built in 1792 (sure, heard that one before) and once I saw them, darned if it didn’t look as if they might be right. Hand-hewn beams too. Some big rooms, decent wiring, a good furnace (which might get flooded if they don’t turn on the power and get the sump pump running), and the windows, siding and roof are like new. A new kitchen is the only big ticket item for me. The one that’s there was cheap and no longer has any doors. Makes you wonder. The carpets look crappy but are not worn out, just very dirty. If they will clean up, I will save a bundle. If not, I budgeted to replace them.
I went back yesterday for another look, to make a list of needed work, and found 2 vehicles in the drive. Someone getting those couches? No, it was a winterization company come to drain the pipes (after several days of near-zero temperatures, no less). They pumped out the basement and said they’d request the bank get the power on so the sump pump could work. God knows if they will actually do that. They said it didn’t appear anything had broken yet, which I translate as “minimal damage”. They also changed the locks, thereby keeping me and everyone else out. The bank is supposed to give me a key at closing, but my guess is that they won’t. Today, I go back and see if I can find a way in as I will want to visit several times to make my plans and to get contractors in. In a couple of hours, we’ll see if I can get in or not. Agents get good at that.
I’m still having fun!
Some are merely amusing. some can help you immensely. All are interesting.
After 40 years, I've learned a lot, & acquired unforgettable experiences. Follow these long enough and you'll eventually get the whole book. (Names probably changed, for obvious reasons.)