Thursday, August 28, 2003

The real estate saga continues
Our offer on the foreclosure home in the middle of nowhere was accepted by the bank selling it. Excellent! Not so excellent was the news we received on our house we’re trying close on the sale in Ohio. The buyers wanted us to have the furnace, a/c unit, air cleaner and humidifier serviced as a result of their inspector recommending that be done. We did it and the service report was this: replace the furnace. Hmmm… Not exactly what we were going after. So my wife talked to the real estate agent in Ohio and he said that we are not going to be replacing that furnace. He’s adamant about that and he’s also adamant that the deal will go through smoothly still and we’ll be able to purchase the house here in Wisconsin. Uh-huh, sure thing there Mr. sales guy. He might be right though. The inspector didn’t catch the cracks in the furnace and we had no idea they were there. So, that means we are not obligated to do anything more than honor their request that it be serviced. Since my wife and I aren’t typically people who would knowingly put people in harms way, we’re not going to pretend as though everything is set to go. We’re having our agent go back and tell the buyers what the deal is about the furnace and suggest they up the price on the house by about $2,500. We’d give them that money in an escrow account so they can replace the furnace with whatever they want. Will this fly? Possibly. The buyers are relocating and they have a deadline they’re facing. They waited until the last minute to get the house inspected and have invested a decent amount of money in an appraisal, title search, etc. I don’t think they’re going to walk away from the deal at this point, even with the furnace issue. If they did walk away from the deal they would have to start this whole process over from scratch: make the offer, counter-offer, inspection, title search, blah, blah, blah. I’m hedging my bet that they can’t walk away from this house at this point in time. Of course, I’ve been wrong a few (million?) times in my life before.

Boys and girls, this is the joy of real estate and home ownership. It’s not all that those late night infomercials make it out to be. You are not likely to make it rich in the real estate market. There is no guarantee that your house will go up in value. There is no guarantee that the house won’t turn into a money pit. Investing in a house is just as risky as investing in the stock market. Honestly. If you’re ready to own a home, you should pursue buying one. But if you’re just buying a home because that’s what experts say is the best thing to do, don’t do it.
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The Colonel