#MoneyStory #5: The Miracle (part 1)
(Contined from #MoneyStory #4: Spending in Circles.)
You probably know home buyers who “won” a house in a multiple offer situation. But have you ever heard of someone buying a multiple-offer home by STAYING OUT of a bidding war?
That’s what happened to me!
Yup… I bought a home by NOT competing with the other offers. It’s a good story!
The Miracle, Part 1.
It was the year 2001. I was a realtor and there were LOTS of bidding wars on homes.
It’s exciting if you are listing agent and you know the listing will sell fast. But it’s discouraging if you are a buyer!
Recently divorced, I was still in the “starter home” my ex-husband and I had purchased a few years earlier. It was a perfect first home, but I felt my daughter and I were rapidly outgrowing it.
My upright grand piano had come home since the closing of our restaurant, crowding the living room. I also now had “extra” furniture I used to stage my listings.
I had outgrown the home both physically and emotionally. It was time for a fresh start.
One morning, I called my mortgage lender, Patrick, and ask him to get me preapproved. I was making more money and had a bit in savings. The time seemed right to look for a new home.
After our call, I headed out to preview the new listings. I wasn’t prepared for what happened next. I stepped into the front door of a “just listed” 1919 Craftsman in an up-and-coming Seattle neighbhorhood and OMG…
It was MY HOME! I just knew it!
The home on Orchard Street.
It felt RIGHT. I loved the neighborhood, which was very close to my daughter’s school. The home oozed old world charm, yet had opportunities for easy improvements. I knew exactly where all of my furniture would go. My piano and dining room table would fit perfectly. A bonus room was ideal for an office. The bottom line: I SAW myself LIVING there!
Excitedly, I called the listing agent. Then my heart sank. There were already multiple offers on the property. This meant a bidding war.
Then I spoke to Patrick, who had even worse news. “Do you know you have accounts in bankruptcy?” he asked. “Your credit is in bad shape!“
I was stunned. Bankruptcy!? I had gone through a rough patch with the divorce, but I had NEVER declared bankruptcy! As a matter of fact, things were as good as they had ever been for me, financially.
As the details unfolded, I discovered accounts that were no longer my responsibility (per a divorce decree) had indeed been placed into a bankruptcy. My name had not been removed first, nor had any creditor contacted me. As my lender and I sorted out the facts… He said, “I’m sure this can eventually be cleaned up. But it’s going to be tough for you to buy a home right now!”
I sheepishly admitted I had just found one I wanted to make an offer on. Patrick took a deep breath. “Well, if you really, really want that home, I’m sure there is a way to make it work… But it might not be easy!”
I was putting him in a bad position. If he produced a pre-approval letter, it would be based on the hope that he could get me financed, not the fact that I was prequalified.
The situation also put me in a precarious position. As a local realtor, if I could not close on a deal, my name would be MUD!
I called the listing agent back. “I want the house,” I said with certainty. “And, I know this won’t make any sense, but I don’t feel I can submit an offer right now.” As I explained, I wasn’t fully pre-approved yet and was not in a position to compete with other offers in good conscience.
There. I had said it. I had stated my intention AND the truth, in full integrity.
I absolutely wanted the house, but I didn’t want the seller to turn down a more qualified buyer. “Still,” I continued, “if for some reason the seller doesn’t like the offers they receive, let me know. I still want the house!”
Offers were presented the very next evening. My lender and I went to work, seeing if we could find a way. I had only enough saved for a 5% down payment, although perhaps I could come up with another 5% before closing. We didn’t have a solution yet, although we were optimistic we could find one.
Then, the miracle happened. Or rather, a sequence of miracles!
The night the offers were presented, I called the listing agent afterward. “Is it sold?” I asked, fully expecting a “Yes.”
“We got some good offers,” she told me. “The sellers have counter-offered on terms and the buyers have a day to respond. We anticipate they will accept.”
“Well, if anything falls through, I still want the house!”
(Now I was sounding like a broken record, but it couldn’t hurt to state my intention, right?)
I had toured the home twice, leaving my real estate business card both times. Little did I know… one of the sellers knew me! A few years earlier, he had taken a college class for which I was an intern. We had positive interactions and mutual respect.
This came in quite handy the next day when, instead of accepting the sellers’ counter offer, the would-be buyers stood in their driveway for hours, debating the details of the contract. (One was a lawyer who was intent on rewriting boilerplate language of the agreement.) Instead of just signing and accepting the counter-offer, they acted undecided and rather “high maintenance.”
At some point in this process, the listing agent mentioned that I also had an interest in purchasing the home. And it became apparent… I wanted the home much more than the other buyers in the driveway!
As the buyers continued to loiter and debate, the sellers lost their patience. They called the listing agent. “Get these people OFF our property!” they said. “Call Kate and tell her to write an offer. We would much rather sell the house to her!”
I scrambled quickly to construct an offer, knowing the other buyers could seal the deal at any moment by simply agreeing to the changes. I hurriedly faxed my offer just before I met with clients to show shome homes. It was a long, long two hours!
Finally, I was able to call the listing agent. “What happened?” I asked.
“You got the house!“ she declared.
Waves of gratitude swept over me. I KNEW the house was mine! I had trusted myself and moved forward in a way that felt in integrity. I had stated my intention—repeatedly. I had acted on my intuition, even when it looked crazy. I sat OUT of a bidding war… and got the house! The home was now under contract, on it’s way to being MINE!
The first miracle was complete.
But remember my credit situation? More miracles would be needed! I had initially expressed that I wasn’t a strong buyer, but I had no idea how challenging it was about to get.
(To be continued…)