As soon as the closing date was set, we set out to work doing what we had to do to prepare for the move.
We had been packed for weeks, and had been living among boxes for that time. Jen made tentative arrangements with a moving company to come on the Sunday after the closing. I filed a change of address with the post office, notified the electric and gas company and made arrangements with the phone company.
The final walkthrough was exciting — we hadn't seen the house since December, so it was fun to see the place now that it would become a reality for us. The gentleman who had been taking care of the house let us in with the realtor. We imagined that Benito had taken a liking to us. And when I asked the realtor what the termite guy did, Benito cheerfully showed us an inch-wide drill hole in the basement bathroom where the owner self-treated an earlier termite problem. The house inspector explained to me that, time was, people used a particularly harsh chemical to treat a termite problem and that this chemical had a half-life of like 300 years. I was comfortable with the prospect that our house's structural integrity would remain intact.
Was I late for the closing? Of course I was! But it was only because I was sitting in the Wells Fargo Mortgage Office downstairs from the attorney's office where they held the closing. I didn't read the email right. Eventually I figured it out.
A closing is an hours-long affair, full of paperwork and formality. It was also one of the best days of our lives! How cool is it to become an actual New York City homeowner?
After months of hearing the names of the people involved in the transaction, it was strange to see them in person. All the inscrutable actions and ulterior motives we ascribed to them disappeared as soon as we sat down across from them. It's a testament to the power of face-to-face negotiation I suppose. In some ways at least. We even joked when Michael left the room that we were going to create an addendum making the sale contingent on his asking the tenant out on a date. He didn't think it was all that funny.
"Closing costs" were something I'd heard about but never really fully internalized. I knew that we'd need a lot of money on hand for the closing costs, but you really do need a lot of money for closing costs. Closing costs are onerous, but because taxes and fees vary from jurisdiction to jurisdiction, closing costs could be more or less onerous. New York's closing costs are more onerous. Here is a list of all the closing costs (less our legal fee and the title closer's attendance fee, the title closer being a person who sits there to make sure everything is being done accordingly): Fee Insurance, Mortgage Insurance, Department Searches, Bankruptcy Searches, Patriot Act Searches, Survey Inspection, Endorsements, Escrow Fee, Sales Tax, Recording Fees, Overnight Fee and the Mortgage Recording Tax.
The Mortgage Recording Tax constituted the largest portion of the closing costs. In New York, it is basically a tax of $2.17 and change per every $100 for the privilege of getting a mortgage within the five boroughs. No wonder the City is broke — in flush times when the real estate market is hot, they must make gazillions.
So after hours of signing documents, side whispers and bathroom breaks, when the owner passed the keys to us, it became entirely real. And then it was like, Holy shit, we own a house!
The seller told us that his uncle spent many years in the house and enjoyed many memories there, and he was likely looking down from heaven happy that the house was being passed to such nice people. We shook hands. They went out to dinner.
For our part, we didn't go to the house right away. Instead, we went across the street from the lawyer's office to go get some drinks.
I can't follow 90 percent of Mark E. Smith's lyrics, but I kept thinking of The Fall's "My New House":
So here we were, late into March, just days away from supposedly closing on the house, and major details were still being ironed out.
That's not to say that we weren't close. The mortgage was ready to go: We had our paperwork in order, the termites were taken care of (or at least we got a treatment for termite damage that may or may not have been from 30 years ago) and somehow the bank had decided that we deserved a huge loan. Our file was cleared by underwriting and was getting a final review from "Quality Control."
The details of the real estate transaction itself were mostly ironed out: The Florida judicial branch approved of the sale, both buyer and seller agreed on the various concessions and although there was some "big issue" with the title, that part was apparently straightened out. In short, it seemed that we were inching toward a positive outcome. There was one lingering issue, however: There was a tenant still living in the apartment upstairs.
It's not necessarily unusual to have tenants living in a house one is trying to buy, but as the house was to be delivered vacant, it was problematic. Not to mention that Michael had already told his management company that he was planning to move out by the beginning of April.
Now you might ask, as we did, How did this happen? The problem came about because the seller waited to give the tenant notice until the Florida court approved of the deal. And since the court took so long to do so, it meant that the seller took a long time to tell the tenant. In the end, he gave her less than two weeks to move out.
So then you start to feel bad for the tenant — it's not terribly fair to tell someone that they have two weeks to move out of an apartment they've lived in for five years. Clearly the seller was trying to have it both ways with trying to squeeze as much money out of the house as possible. The tenant seemed sympathetic to the strangeness of the situation, and she even met with the realtor to see if she could find another apartment. The realtor, wanting to see the deal go through, even offered to waive any fees to get her into another apartment. (An aside: Obviously realtors get a lot of money in commissions, but sometimes they have to put in an awful lot of legwork to see a deal through.)
At the same time, it's sort of like, What did you expect? Not only was there was a for sale sign out in front of the house for over four months but that "In Contract" shingle-dingle had also been dangling there for at least a month or more. You can't possibly come home each night and not think that you'd have to move out sometime soon.
Then again, landlord-tenant law in New York City stipulates that a tenant has to be notified in writing at least a month in advance that he or she must vacate. The seller didn't do anything in writing, and only let her know a few weeks in advance. So she was well within her rights to stay put.
We were just like, Dude, what the fuck?
I mean, on the one hand, the seller was just a person in Florida who was trying to unload a house that his uncle left him; conceivably, he had no clue how landlord-tenant laws worked in New York. On the other hand, shouldn't the attorney have advised him about what to do?
The key sticking point was that the seller and the seller's attorney couldn't give us any indication that the tenant would be out of the apartment in any particular time frame. We were all beside ourselves trying to take in what it meant, including our attorney. He wouldn't let us go through with the sale if we couldn't work out this tenant situation. He was adamant that we shouldn't get ourselves in a situation where we'd be forced to evict someone. Meanwhile, since the process was dragging on so long, our mortgage was in danger of unwinding itself; certain parts of our paperwork and the rate lock we set were close to expiring (at this point in time the rates were inching upward from record lows, something that reversed itself later in the year).
So as late as a week before we finally closed, the three of us were coming to terms with the possibility that not only would we not have a house but we also might be looking for a new apartment to rent. Our landlord was hounding us wanting to know when we were leaving, and all I could tell her was that we'd know something soon.
Michael was of course in the same predicament, although his management company was less understanding; when he told them that he would have to stay another month they threatened the forfeiture of his security deposit. And he, sensitive guy he is, felt bad that the tenant was getting jerked around. This was too much for our attorney: "But who looks out for Michael?" he demanded to know. He took up Goober's cause.
Eventually the attorneys worked out an agreement: Basically, they agreed that the seller would be liable for the tenant as long as she remained in the apartment after closing and set a date for her to leave, with the seller being penalized $250 a day for each day the tenant was there past that date. We'd hold back $15,000 in escrow for these penalties, which wouldn't be released until the tenant left.
And then, suddenly, miraculously, somehow, someway, our closing was scheduled. We were ready to get the house.
When we bought the house, we also had two trains. One was the mortgage train. The other was the details-in-purchasing-the-house train. At times these trains resembled 110-mile-per-hour Amtrak locomotives rumbling through Lancaster, PA on the high-speed stretches of the Keystone Corridor. Other times it seemed like something out of Unstoppable, the 2010 film starring Denzel Washington as the Veteran Allegheny and West Virginia Railroad (AWVR) engineer Frank Barnes, who is merely doing his job to the best of his abilities despite the best efforts of heartless penny-pinching executives to screw him out of his retirement. I'll never forget Denzel's words to Chris Pine as they are barreling toward "Stanton" — they're a prime example of Denzel's acting style in which he makes something sound really dramatic by repeating key parts of preceding sentences. In this case, Denzel says: "I'm not doing this for you" [smiles and slightly shakes head] "Not for you."
Other times the trains looked like something hobos sleep in in a railyard somewhere out in Plains.
In the middle of January we learned that there was a slight formality that would have to be resolved before we could buy the house. After we were in contract, we discovered that the house was, in essence, an estate sale. Our understanding was that the family members who inherited the house had it for some time until they decided they no longer wanted to deal with it; normally this works in the buyer's favor but we didn't know this fact going in; in retrospect, it probably accounted for the relatively smooth negotiation. (I just Googled the previous owner and it seems that he died in March 2010 at the age of 90, so the heirs were basically unloading the house.)
Some years before, the original owner had moved to Florida and rented out the house's two units. After he passed away, ownership of the house was transferred to his nephews and nieces (not totally sure how many, but my impression was that it was at least two and perhaps three), who continued renting out the house.
Now Florida has a lot of older people living there, and a lot of older people who move there from other places, so the Florida probate courts are attuned to issues with estate sales, and thus pay close attention to such sales. In our case, it meant that the Florida courts would have to approve the sale of the house. This was something that the realtor was unaware of. This was something that the seller's attorney said he was unaware of. You'd think it would be a formality, but sometimes nothing is a formality.
By March, we had a "CTC" from the bank — that's "clear to close" — but we still hadn't heard from the Florida courts. According to the seller's attorney, this was because the judge assigned to the case had retired. Not to worry, however! The attorney's sense was that the judge just wanted to see a list of comparable sales so he or she would be satisfied that the sale was on the up and up. The seller's attorney assured us that all was going well and that we should be on target to close at the end of March. We were still hoping to close just before the end of March.
And now on to the other train: So that brings us to the middle of March, ten days before we were supposed to close. All through the process, the underwriters want to see everything about your finances, for obvious reasons. That means that they want paystubs, more paystubs, tax returns and updated tax returns and bank statements and updated bank statements. At some point after we initially submitted our bank statements and before we submitted our updated bank statements, Jen's mom found a bunch of savings bonds that Jen received as a child. That was fortuitous, because we could use the money for the closing costs. Jen's mom cashed them and sent her the money. But when the underwriters saw the extra money in Jen's account, they needed to know where it came from.
Since the money looked like a gift from Jen's parents, we had to fill out and have Jen's mom sign a gift letter, as well as furnish the underwriters with a copy of the canceled check. The problem was that the first several versions of the scanned canceled check were too illegible for the underwriters. We had to submit and resubmit copies of that check. Eventually they determined that the scan was good enough. I'm not sure what the issue was.
The more pressing issue that materialized in the middle of March was the termite damage the housing inspector found. It wasn't a lot of damage — just ("just!") some soft beams in the basement — and the inspector had no way of knowing how long ago it happened, but he noted it on the report. We thought this was to our advantage because rather than do a treatment or fix ("sister") the beam in question, we got a small concession from the seller on the closing costs.
Now we had the inspector out in December, just days after we agreed on the price, and the underwriters had the inspection report since early February, but it wasn't until ten days before the scheduled closing date that they made it an issue. Some blamed the stringent requirements of a FHA loan; I'm not sure what the issue was, but suffice it to say, the underwriters wanted proof that the seller took care of the termite situation before they would issue us the loan. But the seller had no idea when the damage happened, or whether it had ever been treated, much less any documentation thereof, so we were stuck. And since we already got a concession from the seller for the termites, they were unwilling to do a treatment. Which meant that we would have to pay for a termite treatment on a house we did not yet own.
You know what happened? The realtor passed along names of some exterminators he worked with, set up the appointment with one of them and we paid for a termite treatment on a house we did not yet own. As Jen put it, "The upside is we can get a mortgage." The downside was that we would be out $1000 if for some reason the deal fell through. But of course we paid for the treatment; we had no other option. I'm just amazed it got taken care of as quickly as it did; it was taken care of in a matter of days.
Meanwhile, back to the other train: The Florida court finally approved the sale. Although it appeared to be a formality — and really, why would a court want to hold up a sale? — apparently those involved were somewhat concerned that the approval wouldn't happen. Which brought us to the last wrinkle in the mad rush to close on this house: The upstairs tenant was still there.
