Christie + Thane's Blog

Our search for a home that could eventually be moved off-the-grid took more than 24 months. We were living comfortably in another home that we just finished extensively remodeling and decided it was time for another, longer term project. Our criteria started looking at cabins in remote areas that were as close-in to the Portland metro area as we could get. Our search started in the winter of 2007; the first property we were seriously considering was a cabin located in Cougar, WA, along the base of Mt. St. Helens. The A-frame cabin was located on a creek surrounded by two pristine lakes, Yale and Merwin. With hydro-electric possibilities and being situated on a nice south facing 1-acre lot with a well, it had a lot of options for off-the-grid living. The structure, however, was pretty much a tear-down. After a bit of a bidding war, another offer was accepted. It was probably one of the best things that happened to us as it made us truly evaluate what our baseline criteria:

• acreage; minimum of 1 acre providing enough space for small farming and renewable energy generation
• preference of well and septic
• on-site natural resources i.e. stream,  river, etc.
• cabin or small structure; just enough to finance conventionally, but our budget only supported a second-home living situation – most likely just a tear-down
• privacy (obviously not green, just nice to have!)

We continued our search and watched as prices continued to drop with the falling economy. Eventually, we were able to add the following to our list:

• commutable (within 20 miles of downtown Portland)
• walking/riding distance to amenities
• structure that we could work with; i.e. not having to tear-down, but good enough bones to retro-fit properly and live-in as a primary residence

We perused Craigslist, FSBO, foreclosures, REOs and of course, received daily updates from multiple sources for MLS updates. With our new set of criteria, we ended up in several instances of bidding wars, losing to cash offers. Our initial strategy was to offer low and move up; we learned quickly that our strategy was not effective in the new market with foreclosures, bank-owned and distress sales as our primary targets. Most of the properties we approached were REOs, or bank-owned and we learned quickly that the asking price is pretty much non-negotiable (big lesson learned!). After a few unsuccessful offers, we learned that the best strategy was an above-asking price offer; since most of the offers that were presented with ours were cash, we had to provide some sort of incentive for the lender.

After learning all of these lessons, we finally found the property. We got an above-price offer in within an hour of the listing being posted on the MLS. We didn’t even have time to walk the property. The listing was so new that no images or even a description was included on the listing; just the address (thankfully!) Fortunately, we discovered that within Clark County, WA, tax records can be accessed online with the address or tax parcel number. The only picture we saw before submitting an offer was the tax appraiser’s image.

Since offers are presented to banks, usually the next business day, we knew we’d likely be going up against a cash offer, which turned out to be the case. Luckily, we also found out that because Fannie Mae owned the property, cash took 30 days to close, so as long as we could close within 30days, we were actually better positioned to negotiate with a stronger offer. Our offer was accepted before the ‘For Sale’ sign was installed on the property. The next day when we walked the property, we discovered that the listing said ‘seller to replace roof’ – another nice surprise! Another bonus – insulation in the attic and walls. No damage or moisture to the foundation/crawlspace – priceless.

Adopt the pace of nature: her secret is patience. Ralph Waldo Emerson

Last night we passed our ‘re-inspection,’ or the inspector coming out and checking off our ‘to-do’ list to get the property closed. At this point, the appraiser will have to complete another walk through, the seller has to complete a septic pump and we need the well water tests to come back positive; once those three items are complete – we close!

To give a little history,  when we found the property, it was definitely in need of some pretty significant repairs, most importantly was the roof and flooring. Since the property is situated on 2acres, financing became more of a struggle than we anticipated. When walking the home, we understood that we would be required to make some repairs to the property, taking the risk that we might not be able to close and thus, lose any of the time/money/materials that were required to build enough equity for the bank to find value in the home. Turns out, that was really only one of two major issues, the second issue was appraising the land-to-home value – the fact that the home is on 2acres in a relatively dense area worked against us in that the value of the land far outweighs the value of the home. To process the loan via conventional financing, we needed to built enough equity into the home to make it of some value.

After four appraisals, one appraiser was able to place a value on the entire property; subject to a checklist of repairs. Within two weeks, we’ve finished the repairs, which have included:

• installing new flooring throughout the home – we used bamboo, slate and PEC/Recycled Pop Bottle  carpet
• repair to front porch / damage to post
• replacement of back porch steps
• new paint throughout the entire home – ceiling, walls and trim
• updated lighting fixtures
• removal of shrubs from exterior
• misc. electrical / plumbing repairs
• repair of holes punched in kitchen walls
• well inspection and water testing
• septic inspection & pumping

This is in addition to the new roof, which luckily was replaced by the seller. Together, all of these items are supposed to bring enough equity into the home to give the actual structure enough value for the bank to finance with conventional financing.

So for now, we wait, again…

We never thought we’d hear the words, but apparently, we’re going to be able to close on the home! It’s been eight arduous weeks of waiting to hear if the property would pass financing, and finally, one new roof and 10 gallons of KILZ later, today, it’s passed bank approvals! The beauty of buying a bank-owned, fixer property in this economy!

Our next steps – flooring! We purchased 500 sq. ft. of carbonized bamboo this weekend which will all be installed by next week, along with 700 +/- slate, so that we can close. Pictures to come soon!