In Which I Discuss Our House Hunting Trip to Omaha: Day Five

Today was the home inspection. Other than that, we really didn’t have anything else to do besides miss our son.

There was a lot of down time today, because the home inspection wasn’t until 5:30.

They have this huge mega center called “Nebraska Furniture Mart.” I swear I think it covers five or more blocks and has everything that you could possibly want. Furniture, flooring, appliances, electronics … everything! We hung out there for a while checking out all of the things that we would eventually do to our house. Then, we went to the bank so that we could talk to our loan guy in person and get our cost distrubution.

It looks like we are going to be able to pay a fee for our PMI up front and it will eliminate the 60 bucks a month that we would have to pay in PMI. (Private Mortgage Insurance) It’s for people that have good credit, are putting ten percent down, and are low risk. Ours will be 1,600 dollars. So, we’re needing to bring roughly 16,000 dollars to the closing table.

We were also worried about the 8,000 tax credit that we were going to have to pay back. We just bought our house in October and received the credit. The stipulations were that we were going to have to stay in our house for 3 years. However, when we talked to a tax person they told us that as long as we don’t make a gain on our house … we shouldn’t have to pay anything back. If we DO make a gain on the house then we’d only have to pay back that portion.

So, we had to lower the price on the sell of our house from 162,000 to 155,000. It was appraised for 147,000 and to receive the 4% commision if we sell it within 60 days, we had to lower it to 106% of the appraisal value. Originally, we were going to continue to lower the price of the house so that we could sell it within 60 days and get the commision. That would allow us to use the money that we made on the house to offset the 8,000.

Now that we found out that if we don’t make any money off the sale of our house, then we won’t have to pay back the tax credit, we’ve decided that we aren’t going to lower our cost at all. Then, if we do sell the house at 155,000, we’ll make 7,000 on the price of the sell + 6,000 commision. So, we’ll pay back the 8,000 dollars and then keep 5,000. However, if we don’t end up selling it within the 60 days … we’re just going to let them buy the house from us for 147,000. Our originally paid 148,990 … but we only OWE 144,000-ish. So, we’ll make a little bit of money off of the buy-out as it is … but we won’t have to pay anything back but still make about 2,000 since the 147,000 is still lower than what we paid for the house we haven’t made a gain on the house!

So, today was  a great day overall! Now, on to the inspection.

The inspector didn’t find any major defects with the house at all. Which is awesome! We were really worried about that. We were thinking that she wasn’t going to pay any kind of big ticket repairs on the house and we’d end up not being able to get the house at all.

So, the main things that we focused on were the Safety Hazards:

  1. The steps on the front porch are uneven in some areas and it causes a tripping hazard. We figured that we wouldn’t be able to get her to fix this because she would say that she’s lived there for six years and no one has tripped, blah blah blah.
  2. There needs to be a GFCI outlet on the outside. Right now it’s not grounded correctly. (We’ve asked her to fix this)
  3. In the basement, there is exposed electrical wires. (We’ve asked her to fix this)
  4. There is no smoke detector in the basement. You’re supposed to have a detector on all floors. It’s not very much to install this, so we’re taking care of it.
  5. On the fireplace, there is an open gap between the front of the metal insert and the brick facing the top of the fire box. This can be a fire hazard. It’s not just a small little gap. (We’re asking her to fix this)
  6. In both bathrooms, the toilets are loose. This can cause water or sewer leaks. (We’re asking her to fix this)
  7. The diswasher drain does not extend up to the underside of the countertop. This can cause the sink water to run into the dishwasher which could contaminate it. Aaron says that he can fix this really easily, we’re not bothering her with it.
  8. One of the garage doors  does not have an electric eye safety reversal thing. Meaning that if something was under it, it wouldn’t know it and would continue to close. (We’re asking her to fix this)
  9. There is drywall damage in the garage from a prior leak. We’re already planning on drywalling the basement, so we’ll just use our extra drywall to patch these holes.
  10. There is an outlet in the garage that is wired incorrectly. (We’re asking her to fix this)
  11. There is a gas leak at the bends in the pipes. (We’re asking her to fix this)

We’re also asking her to fix two minor problems: The second garage door won’t open, so we need that replaced and there is a ceramic tile in the master shower that is protruding and water damage can get back there and cause leaking or other problems, so we’re asking her to fix this as well.

Other than that … we have a couple of things that we can fix ourself … but overall, it was a good inspection!

Tomorrow we leave this hell hole of a hotel, hop on a plane, and see our sweet little boy! He’s been a great little boy for Nana this week and I can’t WAIT to get home and cuddle with him!

    • Tracy
    • June 17th, 2010

    Hey– I don’t want to give bad news, but you should double check on the tax credit thing. I’m a litigator, not a tax lawyer, but I think your math is slightly off– because you got the tax credit, your “basis” in the house (the price by which the IRS measures whether you had a gain or loss) is actually $140,990 (148,990-8,000). So if you sell for $147,000, the IRS will consider that a gain of $6,010, which you would have to pay back to the government (unless you have to pay a real estate commission or something).

    I might be wrong, but I’m pretty sure this is how the tax credit works.

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