I’m Buying a House!

Buying a House with a VA Loan

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Wow. What a crazy month it has been! Last time we spoke, I was in a conditional release quarantine, and now I’m buying a house!

Let’s rewind a bit. First, go ahead and call me a liar because I know a few months ago I told you this wasn’t going to happen, and if it did, it wouldn’t be until the new year. Then I found a house I *thought* I really liked for an awesome price, and I wanted it really bad.

That’s how it all began.

I learned some things and reconsidered.

I have been browsing Realtor.com since last September, even though I wasn’t sure what I would do upon arriving at my duty station. All through officer training, I watched my friends buy homes via virtual tours/webcam walkthroughs, and while I was jealous – I knew I could never commit to buying a home that way. Plus, I wanted to get my credit card paid off to boost my score a little more so I could qualify for the best rate. And so the back and forth went on.

Upon arriving in Mississippi, I learned that almost all new nurses stay here for a full four years. Time on station had been one of the factors giving me pause on home-buying in general. Even though I know you shouldn’t buy a house unless you’re going to be in it for a minimum of 5-7 years, anything longer than three feels like forever to me as a military member.

Then I saw how freaking low rates were, and my partner and family encouraged me that if I really wanted a house, I should just go for it now or not go for it all.

When the house I mentioned earlier hit the market, I couldn’t resist.

I applied for a VA loan.

So I started shopping for lenders and rates and found that I actually could qualify for the lowest rate with my credit score. After that, everything fell into place.

I qualified for just $200k, which was a little disheartening because I thought I was better-qualified than that. However, upon talking with my loan officer, I learned that my pre-approval could be increased to more than $220k if that was what I desired. It was not.

Based on the numbers, I knew I didn’t want to pay more than $220k for a house, even though I could *afford* the payment. And as someone who *attempts* to manage my money well, deeper down in my financial soul – I knew that anything over $200k would make me throw up.

I made a goal to stay under $200k unless I absolutely ran out of options.

Let the Home Search Begin!

Because my friend had been working through the home-buying process, I followed her lead. I used her lender and her realtor. So far, it has worked out wonderfully. I already knew exactly what home I wanted to buy, with a few other contenders that were all over my price range.

Upon seeing the home I thought I loved, I said – I must put in an offer. It had a brick fireplace, high vaulted ceilings, and a large lot. However, it was older and needed some serious updating, and in a .2% chance flood zone (no flood insurance is required in these zones, but it was something I wanted to have based on the neighborhood location). They wanted 175k for it. Plus they took the fridge. (If you’ve been following my Twitter feed at all, you know how I feel about refrigerators being left in houses.)

Even though I loved the home and its very rough edges, my friend was skeptical and my partner was worried that it might be a lot for me to take on in the next year by myself with a new job and long hours. I saw loads of potential, but about $30k worth of upgrades to make it what I wanted.

Honestly, if the sellers hadn’t been so stingy with negotiations – I would be under contract in that home right now. However – they countered back a couple of times, allowing several days for me to do more research about rising sea levels and flood zones. Their bad. By the time the final counter offer came through, I was a scared goose and no longer felt at peace about the house. It felt like God was telling me to walk – and so I did.

The very next day – Tropical Storm Cristobal hit, and the main road I would have taken back and forth to work completely flooded out. Supposedly, this is a common problem when it rains hard – and it would have made my 30 min. commute around 45 mins. That’s precious time when you’re working 13 hour days.

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Feeling disheartened.

Despite the relief I felt from letting my “dream house” go, there was nothing on the market catching my eye. One home in my friend’s neighborhood (which I love) had sat on the market for while. It checked all of the boxes, but I wasn’t “in love” with it. However, I’ve tried to approach home-buying here with complete lack of emotion since it is a temporary dwelling for me.

I decided that the location (about 15 minutes from work) was worth the look, and ultimately ended up putting an offer on it. This house needed some updates, but was newer than the other and overall better kept. The changes I wanted to make were cosmetic and could be postponed until my partner arrives next summer. Another huge plus was that it was in the same neighborhood as my friend I’m staying with (like a block away). We are close, and having her and her husband nearby gives me a sense of comfort. Unfortunately, the yard was atrociously small and backed up to five other homes. You know the type. I hated that, but I could see myself calling it home.

Lo and behold – on the day I put an offer in, so did another person. I was in a multiple offer situation, and my partner and I had already decided we were not willing to pay full price for the home. We put in an offer we were comfortable with, and lost. I later found out that my offer was beaten by $250.

The night I lost that house, I was feeling fed up and discouraged. My friend and I were painting her bedroom, and I was lamenting that there was nothing left on the market that I wanted to look at for less than $200k. As we were cleaning up, Realtor.com sent me a notification.

Funny side note: The next day, my realtor called me to say that the people who beat my offer didn’t have the money to move forward on the home, and the seller wanted to know if I was still interested. Ha! No. Better things for me on the horizon.

The One I Staked it All On

A small, 2018 home with a lot the size of a small park was available for $168,900. I couldn’t believe my eyes. There were some catches, of course. It was only 1424 sq ft. (I wanted at least 1700) and the area around this little gem of a neighborhood is not “subdivision quality,” if you know what I mean.

However, it checked all my boxes and more.

  • Fenced in yard with some distance from the neighbors
  • No HOA
  • Far away from a flood zone and just 1 mile from my friend
  • 3 bed/2 bath w/ attached garage
  • Under my max budget of $200k and totally move-in ready

It felt like the perfect home, and I knew it would fly off the market if I didn’t get in there quick. I told my realtor I had to see it the very next day.

Long story short – I loved the home. My partner agreed and we decided to put an offer in of full asking price + anything over $6000 in closing. And I wanted the fridge (which the owner supposedly was taking).

Unfortunately, two other offers went in on the home the same day, and multiple people were seeing it. We were told we would be in another multiple offer scenario and to put our best offers in. I had felt so good about the original offer I put in, and now I was sure I would not get this home, even though it felt so right.

My realtor got some insight and said that if I truly wanted this house – I needed to work on the closing costs. I was so torn. I wanted to get a good deal, and I hated to throw so much out of pocket cash towards a house, especially since I would need to buy a riding mower and washer/dryer upon moving in.

Back and forth I went – do I offer full closing but ask for the fridge? Do I not ask for the fridge but offer less in closing!? I was not a fun person to be around, and I was so torn on what to do that I took to Twitter.

Twitter did not let me down. Multiple people said that yes, they would pay full closing costs on a home they loved if it was already far under their budget. My partner continued to remind me that even though the loan is in my name, we’re in this together and that he was there to help support me financially with the house. That helped ease my mind so much.

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My final offer was to pay full closing and full asking price, but to give me that beautiful refrigerator. That same day, 25 people called to see the home. I was a nervous wreck waiting for the final decision.

I got the house!

I beat out the competition and the house and fridge are mine! I was so excited, but also overwhelmed because I just committed to paying around $6,500 in cash, and even though I have the money… ya’ll know that is like all the extra money I have right now… Some might say this was an unwise decision, but despite my nerves, I felt like everything would work out okay and that this was the home for me. Plus, my partner is paying half, so I’m not actually paying the full closing.

Anywho… it turns out it’s okay that I am paying the closing costs because… You will never BELIEVE. WHAT. HAPPENED. NEXT.

The plot thickens…

I have played this game before and I know how finicky VA loans are. I knew we weren’t over the hurdle until after the appraisal. Thankfully, the inspection went great and there were no real issues found with the home.

Unfortunately, the appraisal did not go well. The appraiser invoked something called the “Tidewater Clause” (read more about it here). This basically means the appraiser doesn’t think the house is worth what the seller is asking, and they give you the opportunity to find comparables in the area of recently sold homes to back up the asking price.

Something in my gut knew this would happen. While I had never heard of the Tidewater Clause, this happened to me back 2017 in Denver. Obviously, that was a blessing in disguise because I was totally not in a position to buy a home (with my ex, at that), but it was still upsetting. Plus, when you’ve lost a house before, it leaves you feeling very wary the next time around.

So we sent in the comps for the area, but I wasn’t feeling great about it for many reasons (remember the not so desirable neighborhood AROUND my neighborhood I mentioned earlier?). Long story short, the appraiser did not like the comparables and stuck with their original value of $162,000.

There is a lot more behind this story that I won’t mention here, but behind the scenes, the seller was obviously upset. I offered $168,900, and that is what they were expecting to get for their home. Originally, they decided they would not lower the price. There was some conversation between our realtors, and mine asked the seller’s realtor to mention some of the cons of backing out now, such as: waiting for another offer to come; possible under-appraisal again; possibly worse offers than mine, etc).

I know for a fact that the seller is military and is probably preparing for a PCS, so all of those reasons above make for a very complicated and conflicted decision. When you’re PCSing, you don’t have time to play the waiting game on a home.

Fortunately, the seller slept on it and decided to drop the price of the home down to $162,000, IF I agreed to pay $1500 for the refrigerator we originally negotiated.

I agreed to this because I feel like it’s fair, and I do genuinely feel bad about its under-appraisal. I don’t think the appraiser made the right decision, but that isn’t for me to decide.

I got a really great deal.

Now you know the full story. All the contracts have been signed. I survived the appraisal process (barely). We’re just waiting on the underwriting portion now. I am a little nervous about this as well, but am trying to stay positive. The worst seems to be over, but who can really say? This market is crazy, and there are so many hoops to jump through.

I will keep you all up-to-date, and I can’t wait to share a house tour with you all!

Stay tuned for more as I progress on this journey. I’m supposed to close on the home in the next couple of weeks, but we’ll see how it plays out!

9 thoughts on “I’m Buying a House!

  1. As a Certified Floodplain Manager (and friend), I was soo happy to see the discussion on flood zones and flood insurance mentioned above!! Good job, Rosie!

    1. I knew you would appreciate that, Josh, and I almost called you a couple of times during this process because SOOO many places are near or in a “shaded X zone” and I almost bought in a shaded X zone (house #1) and I’m just so glad I didn’t because I would have always been stressed being so close to the water and the flood zone. It was… crazy. Thankfully, it all worked out for the good!

  2. Houses are not great investments, they are more like cars, lifestyle possessions. Certainly better than cars because usually they’ll keep up with inflation and if you stay in them for a few years you can get most of the money you spent back. On rare occasions you can make a lot or lose a lot but not often. So if having a house is a big deal to you then it is a purchase that makes sense. My wife and I have lived in our house for 41 years. I had an opposite life from you, one spouse, one job and one house for my entire adult life, and counting, except I retired at 60 five years ago so I hung up the job. You sound like you went into this purchase perfectly, refusing to fall in love with each potential house, clear headed and value minded. For what its worth, since I’m no expert, this blog post read like a text book example of how to buy a house the right way! And that must be some kind of very nice fridge! Enjoy that new home.

    1. Exactly. I tried to go into this knowing that I was purchasing a home for emotional reasons, but looking at it from a rational standpoint. I didn’t want to overpay or be at the top of my budget because I know there will inevitably be more bills that come in the next four years. I also wanted something that I knew I could sell fairly quickly if I needed to, or easily rent out.

      Thank you for the kind words and encouragement. I made mistakes the first time around when I tried to buy a home in Colorado, so that helped me be more level-headed on this one.

  3. sounds like not too bad a price for a house, plus you have a big dog yard. we were lucky to get our bulletproof estate for under 100k 20 years ago and i’m really out of touch with what the rest of the world is willing to pay. i hope it all goes smoothly for you the rest of the way. congrat’s.

    1. Thanks! That yard was a huge selling point! Sounds like you did get a steal back then. Nowadays, homes are completely over-inflated in price, and there are a lot of homes over $215k that sit and sit on the market. People can’t sell them. I wanted no part of that. I was lucky on this little venture, and I hope it’s not something I regret. (I don’t think I will, but who knows.) Can’t wait to spend some long days out in that yard with the Mots.

  4. That’s a great story. I remember you asking about the closing costs on Twitter. With all the overwhelming response, I don’t know if I put in another vote which would have been the same.

    That’s a weird situation with the appraisal. I think what you did is the best way around it. The bank knows they are backing a $162K house and are happy. The sellers got closer to what they were expecting with the fridge deal and should be happy to get the maximum appraised value. It’s not like you were trying to bargain for a lower price – this is an independent source saying it must be priced lower for the deal to go through.

    Congrats. I forget her name now, but there’s a blogger who “collects” houses as her military family moves, creating a real estate rental property business across the US. That’s how we still have two of our rental properties.

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