Electric Shock Therapy

A lot of the work that has been going on recently was a backlog of work that was held up by the electrician. One freaking guy with way too much power.  No pun intended.  Let's just say that our contractor had a Come to Jesus meeting with him over his attitude towards being paid in full before he was done the work. He also stated after he really looked at the house that the price would be increasing by about 20%.  Wrong.  It would not be increasing, and you will not be paid in full, especially since this is a project on a draw schedule rather then an invoice type project.  After that meeting he still decided it was okay to come and go as he pleased.  A final warning was issued and other electricians were called to be on standby.  I guess that was the final warning that he needed.  Work is progressing nicely now.

Here is a look at what our electrical panel looked like before.  You are looking as fuses on a 40 amp service (I am pretty sure it was only 40 amps, which is so not sufficient for a house of this size!) for a 3 story house and 2 car garage.  The white box on the right are the original breakers from when the addition was built in 1916.  We are keeping this disconnected panel because it is such a cool feature.  I will try to get a picture of the inside soon.  I think the funniest part of this is the meter location.  Notice it was located above the left most fuse panel inside the house.  It was a new smart meter hung right over top of an antiquated fuse box.  All this junk is being moved in the great electrical upgrade of 2012.

The meter box is being relocated to the exterior corner of the kitchen out of the way from anything.  We also converted our aerial electrical service to underground.  That is that big black cable coming up from the meter pan.  It wasn't hooked up in the first picture.  When the power company came out to disconnect the service they said it is an absolute miracle that our house had not burned to the ground.  Where the service entered the house, the wires were totally stripped bare.  If it had touched the inside of the metal conduit that ran down the side of the house...poof.  No more house for us.  But that is all disconnected now, so we have removed that one risk.   We also converted everything to gas so that we are not burning through 1000 gallons of heating oil each winter.  That meter will be below the electric meter pan.

Once everything gets run into the house from the meter pan, it goes under the kitchen floor, through the crawl space and into the basement to the new circuit breaker box.  Look at the timber beams in the basement.  Those are actual trees with bark from the 1600's.  How cool is that!

The panel that they put in is large enough to accommodate additional circuits in the house.  We went for a 40 circuit panel.  Oh yeah!

So now, everything that has been run out of that panel above has to weave it way through walls, floors, closets, plaster and lathe.  Right now there are spaghetti strings of wires hanging all over the place while we wait for the work to be completed.  

Notice the nonexistent floor in the kitchen.  Still no floor!  I am pretty sure we will not be in the house for Amelia's first Christmas and birthday :(

Going in for the Kill

Now we never thought that we would get this house for the price we wanted to pay for it.  The original asking price when the house first went on the market was around $450,000.  That was almost double our price point.  As months ticked by, however, the house was shown to hundreds of people who all loved the potential, but not the price.  They didn't want to take on the structural issues, the roof, the electrical revamp, and the lack of air conditioning.  Truthfully, neither did I.  I never wanted a project house.  I though that if I was going to stretch my budget, it would be to pay for renovations that someone else had already done for me.

BJ and I went back and forth with structural engineers, family friends, general contractors, all giving us prices of things that had to happen during the first phase of the project.  We narrowed it down to 3 lists:  Must Haves, Wish List, If We Win the Lottery.  The must haves were no glitz and glam.  My dream closet would have to wait until we won the lottery apparently.  We had to focus on getting realistic quotes from actual contractors to know exactly how much we were going to need to budget, and also, how much we could afford to offer for the house.

By this time we had already gotten involved with our mortgage guy to discuss the FHA 203k loan program.  I am not FHA expert, but essentially it is a loan that gets wrapped right into your mortgage from the bank.  The funds from the loan go towards making renovations and other major upgrades such as those we are making.  It is highly regulated by a loan supervisor and subject to a home inspection every single time the contractor submits to take his "draw", (a.k.a get paid).  The process has been pretty easy to navigate so far, but FHA does have a lot of regulations that you must adhere to in order to pass inspection.

Once all the numbers came in, this is what we had in front of us to work with:

• Roof fixes -anywhere from $3,000-$30,000.  Thank you for that narrow range.
• Structural - Approx. $10,000.  I asked you for real numbers here, people.
• Install central air and convert from oil to natural gas-$25,000
• Electrical overhaul-$20,000
• Remove plaster on 3rd floor, insulate and replace with drywall-$8000
• New windows (as many as we can with budget) -$10,000
• Kitchen-$10,000
• Bathrooms-$5,000 x2
• FHA requirements for asbestos and lead paint abatement: $2,000

GULP.  So with that I could offer the sellers $100,000 for the house.  No, just kidding.  But that is what I wanted to offer them.

We had conference call after conference call with our mortgage guy to go over numbers.  He gave us monthly estimated payments based on different offer prices and interest rates.  He calculated PMI and all kinds of other acronyms that I cannot remember.  But in the end I looked at my husband who was drooling over this house and I said, "We can do this."

We devised a strategy for our low ball offer that we were going to throw at the sellers.  It consisted of predicting what they would counter with, and then what we would finally end up buying the house for.  Our initial offer was $35,000 under asking price.  Yeah, we went that low.  The intention was that we would eventually negotiate to about $10,000 under asking price.  We put in contentions for the sale or rental of our existing home and for settlement to be 90 days from the date of the offer.

On March 4, 2012, we submitted our offer.  We would later find out that another person who had not been working with a specific agent was also feverishly trying to submit an offer that day.  Unfortunately for him, by the time he got in touch with someone to write up the offer, the seller had already negotiated a counter offer to us.  Sucks to be him.

When we got the counter back we thought they forgot to make changes.  Our offer price was accepted.  The only counter was that settlement happen in 60 days and we remove the contingency to sell or rent our house.  Holy crap!  They accepted our offer price!