Nobody's Fool

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There's a fantastic column on sfgate.com today about a couple that got sucked into the vortex of buying a house, sort of unwittingly. It's a dead-on description of the feeling we had as first-time home buyers: that growing, gripping sense of panic that we would lose out big time if we didn't start jumping on something.

We would get to the point of liking a house but not wanting to go to our limit in our offers, and our agent would look at us and say "Then you really aren't serious about buying a house."

And then we'd slink home and feel guilty about not going into the process whole-heartedly, when really we were simply feeling that pressure to take the next logical step in adulthood, to join the ranks of the other early 30-somethings and own a piece of property that would chain us to a mortgage and our steady, responsible jobs.

Don't get me wrong: I'm very happy we bought our house. Even after we had the arborist over yesterday, who broke the news to us that two of our six magnificent trees in our front yard would probably have to come out, including the one precariously leaning over our bedroom (to the tune of $4K, choke). I don't know what I'm mourning more, my beloved trees (which I've grown to cherish already after only three weeks in the house) or our nice little savings account that will be going away very soon.

But I think about the panic that we were feeling when we were still looking, the obsession with going over, again and again, how we could squeeze blood from a stone and afford a ridiculously overpriced house (and I'm seeing David and Man-Sau going through the same thing in New York). And I wonder why. Why are we all doing this to ourselves? We've all been sucked into this incredible machine that is the real estate market here, and once we're in we tumble around in it until we finally luck out, sacrifice everything, or decide to move to Utah.

The husband of the couple interviewed for the sfgate.com article has it right:

"And we were talking about it," recalls Colin. "We thought we could become different people. Somehow, the way they move you in increments in this world is pretty amazing. You don't notice it, and then, suddenly, you're talking about changing your career to buy this thing."

Famous Last Words

Last night we stopped by the new house, even though we didn't officially become the owners until 8:10 a.m. (that's Pacific Daylight Time, of course) today. The sellers called us from Texas to let us know they'd officially vacated the property.

On the way there, we noted that the neighborhood through which we must drive to get home was nowhere near as scary at night as we expected.

We also took note of the large number of restless cats prowling around in our trees and bushes in the front yard.

All the lights were on inside — Michael had left them on for us when he packed up his last boxes and left the house. We opened the refrigerator (of course — just in case there's any free, leftover food inside!) and found that Michael and Tiffani had left us a bottle of champagne.

On the counter was a beautiful plant that they'd also left us, along with a note: "Congratulations on your new home. I hope it brings you as much joy as it brought us."

That's when it finally seemed real, and I hugged Andrew and cried a little. Now I definitely deserve the bad karma, for all the gloating I did at the expense of people who ended up being so sweet in the end!

A very, very, very fine house

So I realize I'm not being a very good storyteller. I bitch and moan in post after post about the drama of our real estate search, in excrutiating detail, and then when we finally do buy a house I neglect to connect the dots and explain how it happened. And it's a good story, too.

You must forgive me, because many changes are happening in my life at the same time. The week we won the bid on the house was the same week my new job at work became final — I'm going to be a brand manager in our corporate branding department, working on brand identity, brand architecture and corporate Web projects. It's a dream job for me (though everybody I've ever worked with will tell you that I always say that when I start a new job, so I guess I'm either really lucky or really easy to please).

So I have been feeling very overwhelmed with the blessings that seemed to come down on us all at once, and not being a religious person, I was having a hard time deciding how to channel this sense of gratitude I was feeling. Naturally, I did what I do best: I turned the gratitude and bliss into a finely tuned state of high anxiety and have been walking around short of breath for the past three weeks.

Therefore, it has been difficult for me to sit down and tell the story of the house, mostly because it still hasn't seemed real to me. But we went to the title company and signed our papers this morning, and now I can enjoy the emotional detachment that comes with it all. I already feel like one of those sheltered, lucky, land-owning people who doesn't know what it's like out there, and I've only been out of the Bay Area real estate market since March.

Anyway, here's the story: Last summer, when Andrew and I first started going to open houses (which back then seemed oh-so fun), we were looking in a neighborhood called Glenview in Oakland. We loved the neighborhood and thought we might be able to afford it. But that's before we began to understand the harsh reality: that nothing in Oakland or Berkeley was actually selling for close to what it was listed at. As we actually began to look seriously, we quickly learned what we were up against.

We quickly forgot about Glenview and other nearby neighborhoods we liked in Oakland and turned our attention to a town called El Cerrito above Berkeley, thinking that we might be able to buy a cute two-bedroom house that wasn't flanked by brothels for a decent price. Unfortunately, a lot of other people discovered El Cerrito at the same time we did, and the rest was history. We were very quickly in danger of being priced out of that town too.

Deep, deep depression set in. We went drinking. We vowed to move away.

One Monday afternoon, just before we were preparing to write an outlandishly ridiculous offer on the dump I mentioned in a previous post, Andrew called me at work and said that our agent had called with an "interesting opportunity."

We were cynical enough to know that "interesting opportunity" probably translated to "termite-decimated hovel stretched precariously across the Hayward fault." But we went to look at it anyway.

And we didn't close our mouths the entire time we toured the house. It was absolutely gorgeous. Completely out of our league.

What made it interesting, besides the fact that it was one of those precious Craftsmans that I love, was that it was in the neighborhood we had originally given up on (nestled between Glenview and Laurel) in Oakland. It was three bedrooms, twice the square footage of anything we had dared to look seriously at to date. It was listed exactly at the price we were going to be bidding on the fixer-upper (and the fixer, incidentally, was listed $100K less than our planned offer).

And the opportunity part? Nobody had placed an offer on it.

We were naturally suspicious, but the house turned out to be in great shape. What happened was a classic case of marketing. In the Bay Area, the trick seems to be to underprice your house to generate interest and start a frenzy that ends up in a dozen or two hyper-desperate buyers bidding up the price to record highs. It's very much the eBay model of selling houses. But these sellers were relocating to Texas, and the relo company was buying them out, so they couldn't take the chance of underpricing the house by too much. Another house on the street went on the market at the same time, priced $20,000 less. Ours had a few more steps than that house, too. The competing house got 11 offers. Ours didn't get any.

So we ended up buying this wonderful, three-bedroom, 1,700-square-foot house for the same price we would have bid for the two-bedroom, 900-square-foot house, and in a choice neighborhood. The sellers were reluctant but had no choice but to sell. I'm hoping that the fact we took advantage of their situation does not come back to us in the form of bad karma someday.

And there you have it: I have connected the dots. We close on Wednesday and move in next Saturday. And now we will be very, very poor, but happy, relieved, thankful, and appreciative that we can stay in California for at least a little while longer.

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I'm so exhausted right now, and I can't even begin to think about how lucky and blessed I've been this week, let along write about it. So I'll save it for another time. In the meantime: check it out.

Un-real estate

Not that I give up easily. Not that we're not tenaciously continuing to charge forward. But we've had our butts officially kicked by the Northern California housing market.

We have now placed offers on four houses. On two of them, we came close. Really close. On two of them, we were blown out of the water. All of these houses have been in the same neighborhood. With all of the offers, the selling agent has reported back that we had the "best written" offers. (Which means, I suppose, that with the exception of the amount of cash we were willing to hand over, all our terms were attractive. With the last one, we were actually proposing to allow the sellers to stay in the house for free for two months until they wrapped up their jobs. But they were instead swayed by the offer that exceeded ours by $75K. Bastards.)

We're at that point where we're not sure whether to give up and look for something completely different or whether we should continue looking for the same kind of thing we've been bidding on. We've come so close twice that we're not quite ready to surrender our goal of a single family home in the neighborhood we like for a condo deep in the suburbs, although we've both admitted that we would definitely consider something like that if we had to. It's a weird place to be in, because part of me feels like we're just beating our heads against a wall at this point, while part of me thinks it will eventually happen for us. And I don't know which to believe.

Today, we're heading out to take another look at the fixer-upper that is going to be Offer #5. And once again, we're already envisioning what we can do with this house: what the kitchen could look like, what we could do with the backyard that's now full of dead grass, what we would want to do with the bathroom. Everybody tells us not to get emotionally involved, but how can you not, when you're being asked to pay more than a half million dollars for something that's going to consume your life for the next five years?

Horseshoes and hand grenades

We have now come in second on two houses we've placed offers on. And according to this, we better get to first place real soon.

The House of the (Falling) Spirits

Say a little prayer for us to the god(dess?) of real estate. We are making our first official attempt to become home owners in the San Francisco Bay Area. It's been a harrowing weekend as we examined this move from every last stinking angle (Do we have enough money? Are we just part of the problem by bidding up property values even higher than they already are? Are we insane?). But after long phone conversations with our saintly real estate agent and mortgage broker throughout the past two days, we feel like we have prepared a modest and rational offer that, while probably laughingly low, still feels OK to us. We've written the flattering letter to the sellers. And now we're ready to sit back and let the learning begin (because this is all one big learning experience anyway, right?).

We don't have high hopes that this offer will go through — and we're actually bidding quite a bit over asking! See, inventory is low right now, and this is one of the best things we've seen out there in awhile, which means that a lot of people could be vying for the same house. We're crossing our fingers that our fellow bidders will be turned off by the fact that the property is across from the BART tracks and, also, in a neighborhood this is not yet one of the renowned "walk to to coffee" gentrified areas of Oakland or Berkeley. But it's all such a game, so we're comfortable playing our safe little hand and hoping we'll at least get another shot in the future! It's such a weird housing market — you just can't be optimistic.

Someday, as older people, we will look back on this time, shake our heads, and laugh about how stupid and scared we were. But right now, it all feels so overwhelming.