CHAPTER TWO --
7/6/20
The 4th of July weekend
is behind us now, it’s been three weeks since I posted Chapter One, and the
good times just keep on rolling, the paperwork still coming. One surprise I got
last week was Bloomfield Township sending me a bill for summer property taxes
even though it was very specifically stated to me that Comerica was including
the taxes in my mortgage payment and the bank would be paying the taxes out of
the escrow account they set up for me.
So now I’m trying to get with Comerica to find out why I’m receiving a
bill when they were supposed to be taking care of this. And secondly, I received in Friday’s mail
what they call the Ladybird deed to my condo.
This little piece of paper says not only that the condo is officially
mine but that it transfers to my trust upon my death so my heirs will not have
to deal with probate in order to liquidate, something that the sisters failed
to do so they had a mess to go through. My heirs will not be so
encumbered. But let’s get back to the
story.
Have I mentioned that the owner of
this unit who passed away in September was also Renee’s ex-husband? It was an amicable divorce and she continued
managing their joint business affairs which included the ownership of about 1/3
of the units in this and other complexes.
So she was keeping her eyes open for me.
She was not only managing her own units but was on retainer for the HOA
to manage all the rental units, as well as being President of the HOA. So every time someone gave their notice, she
was on the horn to me saying she might have another place for me. I had one such offer in December for a
beautiful unit in my same building with a ten year lease if she couldn’t find a
buyer by a particular date. But she did
find a buyer.
In February, another unit became
available at a complex at Square Lake and Woodward (two miles away) for less
rent. We were now just one month away
from when the sisters would likely list it.
It was a charming and newer place, slightly smaller but with a new
kitchen and bath, ground floor with a nice patio, view of a beautiful courtyard
and a 5 minute walk to an abundance of shops and diners on Square Lake
Road. She could move me easily on a
single Saturday afternoon. She owned
this one herself free and clear and wanted to keep it as a rental. She would
give me a ten year lease and put it in her will that her heirs would have to
keep it as a rental and honor the lease, changing the will being the only way
to circumvent the Michigan law. I have
to get with the sisters and have them either release me from the lease or give
me a deal to purchase my condo. She
recommended offering 95Gs with 20% down on a land contract. This was based on the fact that the unit was
worth 140 but that the sisters were planning to invest 40-50 on renovating the
kitchen and both baths. It was simple
math. Save yourself the 50Gs and sell it
to me as is for 95. Or let me go to this
other place. She was going to Arizona
for two weeks until the end of February.
She would need an answer when she returned so she could find another
renter if I wasn’t taking it.
Suddenly this started looking more
doable if I could actually swing anywhere near 95. I really didn’t hold out any illusions that
the sisters would go that low but if they were even in the ballpark … even if I
could get it at 120 that would still be a bargain that I couldn’t afford to
pass up. So I texted the proposal to the
local sister and was pleasantly surprised when she did not outright reject it,
instead stating her willingness to have discussions. When she had originally informed me that she
was looking for an investor to buy the unit as a rental property, she reminded
me that back in October she had stated her desire to sell the unit to me but
that I did not feel at that time that I could afford it. She was looking for an investor but she
really just wanted to have it over with and preferred to sell it to me. When Renee texted her that this other
property was available to transfer me to if I couldn’t get a longer lease, that
provided the incentive for her to consider my offer.
Then the world changed again when
John called me and said he had run the numbers through a mortgage calculator
and came up with a mortgage payment of $600 plus the HOA. And why would I want a land contract? Land contracts are for people who can’t
qualify for a conventional mortgage. That’s the advantage. The disadvantage –
and it’s a substantial one – is that they’re more expensive and, even more
substantial, the sisters would become my lenders and thus I would remain under
their thumb which was the last thing I wanted.
Since my credit score was over 800, he encouraged me to apply for a
regular mortgage feeling I should be a shoo-in.
I got a quick confirmation from Renee that the HOA would be $330 per
month which would put my total payment at just under a grand. That’s cheaper than my rent! Suddenly, instead of this deal costing me
$400 more than I’m paying now, it was less than I’m paying now.
I needed confirmation of this from
a bank. The next day I went across the street to Comerica and they ran the
numbers and came up with a total payment including HOA of $980 per month. The
day after that I was told I was preapproved and the bank emailed me a letter to
that effect. I forwarded the letter to
the local sister, Roxana, and she immediately set a meeting for me the next day
to discuss my $95G proposal or giving me a three year lease. Now this is looking like it might actually be
happening.
Everything would of course hinge on
getting the right price. I anticipated
that she might counter my 95 proposal with 120 and then I would propose
110. If I could get her to 115, I’d take
it. The meeting did not start well. She stated at the outset that she had no
intention of keeping the unit as a rental and thus no intention of offering me
an extended lease. She was looking for
an investor, had two interested prospects, and if either one took it they would
likely want me out so they could renovate and get a much higher rent. Going the investor route would be troublesome
though so she’d prefer to sell it to me and have it over with. Then things got much better real fast. She countered my offer of 95 at 105.
Wow! Her counter offer was 5 grand lower than what
I had already decided my lowest counter offer would be. I saw no reason for further
negotiations. I just said “Sold!” There was a $4300 roofing assessment due on
the unit which Renee had strongly advised me to insist that they pay it. Roxana’s only condition was that we split
that assessment and she would lower the price to 103 to accommodate that. I said I preferred to keep the price 105 and that
she pay the entire assessment. I didn’t think $2300 was worth haggling over on
a $105,000 purchase so I was prepared to cave if she balked. Much to my surprise, she did not balk. We had
a deal at 105 and she would pay the entire assessment. (To this day, Renee is still annoyed with me
for not sticking to my guns on the 95; but I don’t like haggling - I’m not good
at it either - and was honestly quite satisfied with the final result.)
So we had a deal. I had already filled out a ream of paperwork
just to get the preapproved mortgage. I
had never done this before so I was really quite uneducated with the process
and naively thought this was the end of it.
Roxana would simply plug the agreed upon numbers into a boilerplate
purchase agreement, I would turn that over to Comerica, and then it would just
be waiting for close, which Comerica had told me would be 45-60 days after
turning in the signed purchase agreement.
Well, that wasn’t the end of it; not even close.
What followed in the next three months
was an unbelievable barrage of forms and documents that seemed to never end and
amounted to about 400 pages before it was all said and done. Even this very simple purchase agreement
turned out to be no simple task. Between
her lawyer and my lawyer reviewing and revising the various drafts and the
added complications and time delays of getting signatures from the sister who
lived in Canada, the deal we had agreed upon that day in the third week of
February was not ready to turn in to the bank until the third week of
March. I had gotten the preapproval
literally days before the pandemic started surging and the stock market started
crashing. A month later when the purchasing document was turned in, they now
wanted all the forms and documents redone, except now my bank balances were
about 30% lower than they were in February.
Would that make a difference? I
now had to consider the possibility that this might not be approved after all
and this began a 3-month period of nerves. Would I have to start over from
scratch and move again if this all went south?
After I turned in all the new
documents, my case got transferred to another bank officer who was specialized
in closings. None of the documents got
transferred with my case because the new officer asked me to send everything in
all over again, once again updated.
Every single time I sent in a load of documents, I thought they had what
they needed. But for those three months,
it was literally every second or third day that I would receive yet another
request for yet more documents.
The ultimate in bureaucratic
nonsense occurred with my Catholic credit union. Immediately after receiving the Comerica
letter of preapproval, I hedged my bets by putting in an application with my
credit union, not only as a backup in case Comerica turned me down in the end,
but also out of curiosity to see if they’d give me better terms. The reality was that the credit union
completely fell down on the job. The
pandemic was just beginning to surge when I started the process and for weeks
no one was responding to my application.
I finally learned that the loan officer was out on extended sick leave
(COVID-19?) and the officer I was transferred to was evidently so overloaded
that I never even got an answer to my many emails. But the very fact that I had started the
application at all got on my credit report that I was taking out a loan at my
credit union and Comerica needed to know how much debt I was incurring. I don’t know how many times I had to go round
and round with them on this issue, how many times I had to explain that I had
no debt with the credit union, that it was just a backup mortgage application
that had been completely ignored and was therefore irrelevant.
So I’m sitting on needles and pins
for weeks wondering whether this crashed stock market was going to sabotage
everything and wondering when there was going to be an end to the demand for
paperwork and documents to be studied and signed. Another major frustration was that I could
not make the loan officer at Comerica understand that it was Comerica’s job to
inform me as to the specific date that close would take place. She kept asking me over and over to supply
her with the close date. I did not
know. The close date would be when her
bank said. When would I like the close
to be? I would like it as soon as
possible but I’m not the one who gets to make that call. There was also the problem of homeowners
insurance. This officer kept telling me
that they could not schedule a close until they had a document from State Farm
that I had a homeowner’s policy. But I
could not get a policy because I was not yet the homeowner. State Farm sent me documents of their
intention to give me a policy but that the actual policy itself could not be
written until I was actually the owner.
Comerica said that wasn’t good enough, that I need the actual policy.
How many times did we have to go around on that one until State Farm finally
explained to them how it had to be.
Meanwhile, Roxana is bugging me
week after week. Why is this taking so
long? When is close going to be? She wants this over with. I kept trying to explain to her – Comerica
has been saying since Day One that it would be 45-60 days from the day we
turned in the signed purchase agreement.
The bank had told me they were shooting for a May 15th close
which would be right on time. So this
really isn’t taking any longer than they said it would. Finally on a fateful Tuesday afternoon in
early May, I got the word that everything was looking good and they were still
shooting for a Friday May 15th close. I would be receiving a notice to this effect
no later than Tuesday May 12th and would then have a max of 48 hours
to sign an agreement to accept this date or the close would be canceled. Okay, my lawyer still needs to review the
close documents so send me the notice before May 12th. They did.
My lawyer gave it the thumbs up and we had a 1 pm appointment on Friday
the 15th with the title company in Farmington to close. I would need to have the balance of the down
plus the closing fees wired to the title company at least one day in advance
and I made arrangements with Merrill Lynch to do that.
Now the only thing that could mess
things up is if something happened Friday the 15th to prevent any of
us from attending that meeting.
Fortunately, it went smoothly but I had always known that this wasn’t a
done deal, the condo really wasn’t mine, until all the signatures were in and
the funds transacted. At the meeting
there were at least 40 documents that needed signatures, many of them full of figures
and legalese, all of which had to be reviewed.
I assumed that they had done their jobs and that all the numbers were
correct but when I put on my MBA hat and studied them, I found several
arithmetic errors that amounted to double-counting and overcharges of about
$800. When I brought it to their
attention they were happy to correct it, blamed it on the computer template
that automatically calculated the charges and had for some reason used a wrong
formula, and they cut me a check for the overcharge. Still, it should not have been my
responsibility to make sure the numbers were correct, especially when there
were so many of them. I was paying thousands
of dollars for closing fees. Wasn’t
accuracy part of what I was paying for? But, as it was, they weren’t doing
their job and so, yes, it did fall to me.
After the May 15th
meeting, it took me a good full week just to let it sink in that I was now a
home owner. In fact, now seven weeks
later, I’m still pinching myself not quite believing that it’s true; I have a
permanent home now; no one can ever make me move again. I go into the kitchen and put dishes in the
dishwasher and think – hey, I own this dishwasher now. I get food from the fridge – hey this is my
refrigerator now. In the seven weeks
that have passed, I still continue to get an occasional request for forms or
information. One nice thing was that
there was no June payment. My mortgage began on July 1st. I did not
receive any instructions for how to pay the mortgage, was only told that a
welcome package would be sent which I finally did receive about a week before
the first payment was due. I still need
to set up both the mortgage payment and the HOA to be done online. But except for that and the issue of this
bill for the property taxes, I think I may finally be done. And I now have the deed. That should be the final final.
Most of you reading this are
homeowners yourselves, most of you having been through it more than once. Now
that I have apprised you of my long and winding road, I have a question. Did any of you experience anywhere near the
same level of bureaucrat nonsense, travails, and frustrations that they put me
through?
To end on a positive note, I love
that I am now secure and am no longer under the thumbs of those two
sisters. I also must commend my original
loan officer at Comerica. Patrick was
always right there for me, always taking my calls and taking care of my issues
and confusions. I was not terribly
impressed with his partner at the other end of the bank but I was very much
impressed with him. I ended up getting a
rate of 3.25% (ironically, the pandemic and subsequent stock market crash ended
up working in my favor; being on a fixed income actually made me a desirable
customer) and my total monthly payment including property taxes and HOA is
$850, $300 less than my rent was. That’s
not bad for 1100 sq ft of hardwood floors, 2 bedrooms (the master huge), 2
baths, spacious living room, dining room, balcony, walk-in closets and an
enormous 14x17 storage bin in the basement.
(Also, any new owner would almost certainly have raised the rent by at
least $100 so I’m really saving more than $400.) I have the option of making extra payments
that would go directly against principal. If I can manage even an extra hundred
per month, that will trim a number of years off my 30 year mortgage.
So even though Renee still harps on
me for not pressing for the 95, certain that the two sisters were so anxious to
unload the property that they would have caved, I am still quite happy. I am also quite anxious to get the place
decorated and turn it into a real home. It
is a beautiful condo in a beautiful complex with a huge lovely courtyard and
what have been so far quiet and courteous neighbors. I think I can be quite comfortable here for
the rest of my life.
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