We Will Wait

Today, or maybe yesterday, marked the official end of our contract on the home. The mortgage broker (RLCA) totally failed us, refusing to go to bat for us with the bogus Landsafe appraisal. We had signed a 1-week extension last week for the appraisal to be adjusted, but this is not going to happen. So now we are back to square one. I was originally thinking we would wait another year to purchase a home, but I feel confident we can still make a purchase this year, probably in late summer or early fall. This will give us time to get our finances in even better shape.

Once again, the credit cards are paid off. I get a big smile inside myself whenever we do this, though it seems we still manage to find things to spend the money on. Last time it was our dog Thunder, who got so dehydrated we had to take him to the vet. He spent the night there, got some fluids, and $700 later we got our great dog back. He is officially worth 7 times what I paid for him! But we love him.

I am the financial planner in the family, and I don't mind this job. I even find it sort of fun, in a somewhat sick way, and have taken to watching The Suze Orman show on CNBC. I can't wait to start getting into more investments in the near future, but high-interest debts need to be taken care of first. The credit cards were the worst, so that is the big thing to avoid now that they are paid off. Almost as evil as them is government.

I used to do some contract programming work back in 2003 and 2004 and failed to account for all income. It was not intentional, my records keeping back then was less than perfect. So I owe Wisconsin about $2k, the IRS about 3k and Missy still owes Maryland about $4k. So the plans for the immediate future include paying off Wisconsin in a couple weeks, and Maryland in the next month or two. The IRS will probably wait until tax refund time next year, or another economic incentive package to help take out more of that balance. As each one is paid off, we have more money each month because we no longer make payments to them, and the 18% interest stops adding up. I would even like to pay off my truck, which is entirely possible, but only if we don't buy a house. We would rather have a house.

I find myself dreaming of a debt-free day. I don't mean mortgage or auto loan free, those will almost certainly always be there. But free of credit card and tax debt, and having just one car loan instead of two. I just don't like clouds like that hanging over my head, and would much rather be making money off interest in investments than paying it. Am I getting old?

Nope, I refuse to grow up. Years of struggling with finances and many months of working very hard to pay off credit card debt, collections and other "issues" on our credit reports was rewarded today. I broke down and bought a Microsoft XBox 360 and Grand Theft Auto IV, for the family of course :) Actually, it will be used mostly to simplify our TV entertainment center, something I will blog about later. The Grand Theft Auto IV is for me, when I feel the need to lose my freakin' mind and mindlessly indulge in hookers, drugs, stealing crap, and killing people. Damn that is a good game!

And no, that purchase was NOT put on a credit card!

Drunk Driving is a Sport in Wisconsin!

From MSNBC... I wonder how much the government spent on this study? Whatever it was, I would have been more than happy to write this down for them for half the price. People in Wisconsin drink a lot? No, you're kidding me! And Minnesota too? No way! :)

It's in the 70's Now, Where is My Motorcycle?

For the first spring in recent history, except last year, I do not own a motorcycle. There is something that happens in my pea-sized brain when the snow melts, the sun comes out, and temps rise into the 70's. A love of mine that sits dormant in the winter suddenly comes back into my head and bugs me to death. I start trying to justify how owning a motorcycle could save me money (it won't), how I need a good hobby (there are less expensive ones), how much fun Missy and I would have riding it (we never get any free alone time), and how much my daughters want me to own and keep a motorcycle (well, score one for the kids). Delaney always says she wants me to keep one, that "Daddy only likes motorcycles that are broken". There is some truth to this, I tend to buy bikes that need work, fix them up and ride for a summer, then sell them.

The bike pictured above was my all-time favorite, at least that I owned. It was a 1987 Suzuki Intruder 1400 that I sold in 2005. Oh how I miss that bike. I form a strange love affair with these machines. The Intruder was my favorite to ride and look at.
My 1979 Yamaha 750 Triple was my favorite for the "old school" factor. These were dubbed "Triples" because they were unique in having 3 cylinders. To the best of my knowledge, only the Yamaha XS bikes and the Kawasaki Sceptre ever had 3 cyclinders.

While living and working in Florida in 2004, I bought this 2001 Kawasaki ZX6e Ninja as a theft-recovery bike. It needed a lot of work, which was fine, I had a lot of free time and needed a good hobby. I restored it to almost perfect condition and rode it to work almost every day. It was probably the fastest and best handling bike I ever owned, but only kept it for about 4 months. Because I was so cramped on the bike, I could only ride it about 10-15 miles at a time.

I have owned many other bikes over the years, including a 2001 Harley-Davidson Sportster, Suzuki Katana, another Ninja that I never rode, a Suzuki XS1100, Yamaha Virago. My first bike was a 1987 Suzuki GS450 that I bought new after graduating from high school. I learned to ride on a friends Kawasaki KZ400 when I was 16.

I could go on forever about motorcycles, but would probably drive my wife nuts if I rekindle this hobby. She is not real big on bikes, but hey, opposites attract, right?...

Rough Day?

I have realized that my blog has become way too serious and somewhat of a downer lately. This is not my intent. Sometimes you gotta remind yourself what is really important in life. Everyone is healthy, happy and enjoying the great Wisconsin weather that has finally turned from winter to spring. Birds are chirping, the snow is gone, the grass is turning green, the skies are blue.

And of course, dogs and cats sleep harmoniously on our couch after a hard day of... well, doing absolutely nothing. Life is good.

WTF Landsafe?

So just when everything is moving nicely on our home... I get a copy of the appraisal this morning, $268k! That is $17k less than our offer price, and $2k less than the couple living there for 4 years paid for the house! Now I realize that home prices in this area are flat, but they have not gone down, and for at least the first 2 years the home value should have gone up. Not to mention they finished the basement, adding a bedroom and another full bath.

So I start looking at the appraisal closely. 2 of the comps seem pretty fair, 1 seems totally bogus, a much older, smaller, ugly home on the wrong side of main street. Then I read further. The appraiser listed the home as a 3 bedroom 2 bath. It isn't, it's a 4 bedroom 3 full bath home. She only included the upstairs in the square footage measurements, even took a lot of pictures, but none downstairs. Did she even go down there? There is no downstairs living-area square footage included in the appraisal, even though there is over 1000 square feet of beautifully finished living area.

The appraisers name is Lynette Richter with Landsafe Appraisals. According to our lender, our only recourse is to have the real estate agent (who is also a licensed appraiser), contact her with a dispute showing better comps and try to get her to alter the appraisal. That, or we can come up with the difference between the offer price and $268k between now and closing. We are not going to be able to do that. The seller could lower the price, but I don't see that happening. We are probably out $350 and a lot of plans for the near future.

See why I am somewhat cynical of the entire process? I am normally a very upbeat and positive person, but I am finding it increasingly hard when dealing with banks, appraisers and real estate in general.

Appraisal Done, Still Waiting...

I received a bunch of legal documents in the mail today from the title company, nothing unusual there. It was written in "lawyer talk" so I scanned it and promptly filed it away. I talked to our Realtor (and friend), Lee Mayrack, and he informed me the FHA appraisal had actually happened yesterday. We have not yet received the results of the appraisal, but most likely will know something by Friday. Based on information in the title search documents, I am not really concerned any longer about the appraisal, since the home must have sold for at least $270k 4 years ago, and that was before the basement was finished. But I guess in this lovely Bush economy, anything could happen. Keeping our fingers crossed...

On a somewhat related note. I cannot say enough good things about Ford Motor Credit. We are saving as much as we can, and are really in no danger of not making the closing (financially at least), but I know there will be a lot of miscellaneous money spent following the move, buying a lawn mower, trimmer, etc. We will do the move ourselves, using my truck and Mark Shelton's (owner of Shelton's Bar and Restaurant) trailer. Having recently paid off our credit cards, I am not in the mood to charge these things.

So I called Ford yesterday and asked them if we could skip the May payment, tacking it on at the end of the loan. Not only did they immediately say YES, they even offered to let us do the same in June if we so desire. The customer service person that I spoke to was a real, live American, with no accent at all, and was very professional and friendly. She was in Michigan. Imagine that (Dell, Microsoft, Capital One, HSBC), a customer service person that is in America, speaks fluent English, and is nice. Ford just went up a notch in my book.

Home Virtual Tour

We found that the home we are trying to buy has a virtual tour, which is much better than pictures! Try it out here.

Offer Accepted! On to the Next Stage...

We are very excited, and it is hard to temper that excitement, but the reality of it is FHA home appraisals are historically very harsh. Don't get me wrong, we are thrilled that the sellers accepted our latest offer yesterday, but are scared to death of the next step.

Now we have all of the loan documents in our hands and they are going out tomorrow. With them is the $350 check for the appraisal, $350 we don't get back if the home does not appraise for what we offered. It should, but in the current economy with home prices going down, it is something we are afraid of. The Realtor is not afraid, he is quite certain it will appraise for at least our offer price. That offers a little relief, but not much.

This is also my first "full-doc" mortgage, but I guess that is the way these days. I have never scanned and printed so much documentation in my life. I have no doubt there is a blood sample and DNA request form in there somewhere. Oh, 1999 was a good year. Fill out an online form, get a date set for closing, show up. End of story. Can we elect Bill Clinton again? Damn the constitution!

So we probably won't know any more about the house for 2 weeks or so, whenever the FHA appraiser can get around to looking at it. So will all chill out in limbo, start saving even more cash than before, and wait. And wait. And wait. :)

Here are some pictures of what we hope will soon be our new home:

Offer Three, See Offer One

We made a fresh offer on the first home again. We just have not found a home we like as much as this one. Our realtor is more confident that this offer is sweet enough to make the seller move on it. We are hopeful and should hear something by Monday. They do have an open house scheduled for tomorrow, but it is supposed to be stormy here, let it rain! If they accept the offer, we will have to save about $8000 in the next 8 weeks. That is doable, but we will have to tighten down the purse-strings to pull it off. Hopeful once again.

Offer 2 Countered, Rejected

As I somewhat expected, though was hoping would not happen, the sellers of the home we placed our second offer on countered our offer with a poor one. We briefly considered revising it, then decided to flat out reject it. I just don't think they are actually trying to sell their home. They have had it listed several times since 2005, usually for short periods of time. In fact, just last year they had it listed for $259k, which means that even after Realtor fee's, they would have walked away from our offer with more money than they listed the house for last year! I just don't think their home appreciated $10,000 in the last year while everyone else's home went down in value. They can keep it forever for all I care.

There are officially no other homes on the market right now that we are interested in. So will will keep saving our money and hoping more come on the market between now and summer.

Offer Number Two

After looking again at a home we previously viewed, we decided to go ahead and make an offer on it. The big drawback was the backyard, which appeared to be very small. We drove by the house Saturday and started wondering where the property lines really were. Our realtor emailed us aerial photo's of the lot with the lines marked and we were very happy to see that the lot is MUCH larger than we originally thought. This makes a huge difference.

Again, we are a long way from home ownership, and while hopeful the current owner will accept our offer, we are doubtful that they will. I will write more in the blog very soon if they do in fact accept the offer, or counter with a reasonable deal. We still have to get past FHA appraisal, which from what we understand can be very difficult.

Offer Countered, Then Rejected

As I suspected, the owner of the home we made an offer for submitted a counter offer to us. They only took $5,000 of the price, which leaves $10,000 up in the air. We just don't think the house will appraise (FHA) for that value and decided to cancel our offer. Oh well, we will keep looking, keep saving, and keep those credit scores climbing!

We Made an Offer!

Tonight, Missy and I made an offer on a home I previously blogged about. We met with our realtor, Lee Mayrack, after work to look at one final home before making our choice. It was a nice home, and $50,000 cheaper, but just does not compare with the home we are hoping to get. They have until Sunday to accept, reject, or counter our offer. We are excited, but reserved, and I have to keep reminding everyone that we are FAR from done with this process, and this home, nice as it is, may not be the one we ultimately purchase.

Could It Be? A Mortgage? Just Maybe...

While I am/was on the verge of giving up on getting a mortgage in this day and age, a letter arrived today from RLCA congratulating Missy and me on our mortgage approval. I had contacted them last week, and called my broker today to verify what the letter said. He needed additional information, which I quickly gathered and sent via email to him. It appears that all is well, we really have been pre-approved for a mortgage, and it is enough money to purchase any of the homes we have looked at so far! I am trying to temper my excitement and hope with the reality that this is not yet a done deal, but I am excited.

Holy Shit, What a Ride!

My dad just forwarded me an email that reminded me of one of my favorite sayings. How true it is!

"Life's journey is not to arrive at the grave safely in a well preserved body, but rather to skid in sideways, totally worn out, shouting 'Holy Shit... What a Ride!'"

FICO Scores Are The Only One's That Matter

In some of my previous posts I mentioned that I pay for FreeCreditReport.com credit monitoring and scoring. I called yesterday to cancel our membership, it just isn't worth it. The credit scores they calculate are not even close to the Fair Isaac FICO scores, and when only pulling information from Experian (not TransUnion or EquiFax), you just are not getting the correct information.

The credit bureaus are damn slow at updating information, TransUnion and EquiFax are the worst, Experian somewhat faster. Nothing will happen quickly with these companies, even after you prove your case. Daily credit monitoring is a waste of time and money. Rather than using a service like FreeCreditReport.com, save your money and pull full reports quarterly using MyFico.com. FICO is the only score that matters, scores provided by the credit bureaus themselves are meaningless.

In case your are curious as to why the credit scores you see when you pull your own report are different from what lenders see when they pull the same report from the same agency, I will tell you. When a lender pulls your report, the information in it is passed through the Fair Isaac scoring software, which generates a real FICO score. FICO licenses their software to the credit bureaus, and receives money each time a FICO score is generated. Because the credit bureaus don't want to pay FICO when you request your own score, they invent their own scoring software, which is supposed to emulate FICO, but falls well short.

Yes, I think this should be illegal. You should have access to the exact same information and score that a lender can get on you, but you cannot, unless you use MyFico. FICO allows you to make "soft inquiries" into your credit report, which does not count against your score. I think they should have "soft scoring" too, which would allow a credit bureau to give you a FICO score without incurring charges from FICO. That would be fair.

Hell, the credit bureaus should be fighting for this as well, as it would make their scoring accurate and they could quit spending all the money the do on the programmers that generate scoring models that don't work. Now that is the first time I have ever advocated firing computer programmers!

You know what? I am a computer programmer, and a damn good one. FICO thinks their algorithm cannot be reverse-engineered. I disagree, in fact it does not look that difficult. Maybe someday if I have some free time on my hands (which won't be anytime soon), I will write a program that lets you scan your report and generate a FICO score for you for free. Then I will charge a lot of money for it and pay cash for my house, Cessna, Harley and Corvette. Yeah, that's the ticket.

The Perfect Home?

Tonight we looked at what we all agreed was the nicest home we have seen so far, one that we all really liked. Of course it was also the most expensive at nearly $300,000. It is a 4 bedroom ranch with a ton of small things that really makes it a great house. The basement is newly finished and was one the standout features. They built the 4th bedroom down there, a small office that would be perfect for me, a large family room, and a bar. A real nice bar. There is a storage/workshop area as well, all nicely done.

The only problem is the paint. I have never seen such a bad paint job in my life. The homeowners did it themselves, and I really have no idea why they were in such a hurry. We would have to repaint everything upstairs, but the downstairs looked a bit nicer. They also have the same POS Frigidaire dishwasher that we have now, which is so loud we only run it when we are not in the room, or even in the house.

The backyard is fairly large and backs up to another of Cross Plains' ridges, this time with huge rocks placed there by glaciers thousands of years ago. We could easily live in this house, it was great, after several weekends spent repainting. Their dog had torn some holes in the carpet upstairs, this would have to be replaced.

The biggest problem right now is getting financed. I got a nice 57 point boost in my credit score today, but apparently only with Experian. I talked to one of Century 21's mortgage guys and he pulled the credit himself. The score he got was lower than any of the scores we get through FreeCreditReport.com, much lower. Makes me wonder what I am paying for if the scores other people get are so much lower than what I get. I have a meeting with him tomorrow to discuss this, and am going armed with tons of documentation to prove that there is still a lot of incorrect information in our credit records. I am afraid I will have to get an attorney involved to clear some of this stuff up, I am at wits end.

The other problem is they are having an open house this weekend. As much as we loved this home, it is not likely to happen. Even our trip next week to visit family for Easter is in jeapordy, and probably will not happen (sorry dad). We are so focused on getting a home that we are just not allowing ourselves to spend the extra money. I am close to saying "Screw It" and just putting an end to the house hunt until next year. Between George Bush, the economy, credit crisis and God knows what else, the perfect time to buy a house may not be an option because the damn banks won't loan any money, unless you don't need it.

Looking at Our First FSBO

After work tonight we looked at our first FSBO (For Sale By Owner) home, just a couple of blocks from where we currently rent. We met a very nice younger couple with a young son and newborn daughter. They have lived in the home about a year, but are relocating back to their native Michigan. It was somewhat odd having the homeowner show the home instead of a realtor, but they were a real nice couple.

The house is a very nice 3 bedroom, 2.5 bath ranch with a huge unfinished basement. The builder did not cut corners here either, the woodwork and nickel fixtures are very nice, as are the cabinets in the kitchen. The home has new stainless steel appliances and a gas fireplace, and a family room that would be perfect for us, including a great place for a LCD TV. The 2 smaller bedrooms are small, but have a unique way of sharing a very nice bathroom between them. The master is medium size, but large enough, and has a great bathroom with a large jacuzzi, separate shower and double sink. A walk-in closet is accessed from the bathroom, which I like.

The basement is unfinished and huge, with rough-in plumbing for a bathroom and over sized hot water heater, to help support the jacuzzi tub in the master bedroom. I really like the quality of construction in this home, and this extended to the basement. A lot of thought was put into eventually finishing the basement, and it would be a great slate to work from.

Despite only having 3 bedrooms upstairs (the girls would really like 4), this was my favorite house so far. Ranch homes always appeal more to me than 2-stories, and this one was very nice. They are asking $278,000 and said the taxes are about $4500 per year, which means the appraised tax value must be around $225,000. I wish I knew how much they are really hoping to get for it. If this home could realistically be had for $250,000 it would be hard to turn down. Missy liked the home, but not as much as me, so this will likely be a battle not worth waging.

I'd love to know where our kids get their sense of entitlement, especially when it comes to everyone having their own room on the same floor as the master, and every room meeting some size criteria. Growing up, my room was about half the size of these and I never minded, hell, I never noticed. Don't worry, Missy doesn't read this blog anyway :)

More on FICO Credit Scores (Government)

While looking for something totally different, I stumbled upon this Acrobat file on a US government web site. It has some real good information.

http://www.pueblo.gsa.gov/cic_text/money/creditscores/your.pdf

Follow Up to News Reports About Michael Gullickson

On February 20, 2008 my step-daughter's father was killed in a head-on snowmobile accident near Mount Horeb, WI. He was a great guy, everyone that ever met him loved him, including me. I won't rehash old news, his sister Heidi has an excellent blog and is much better with words and emotions that I am.

The only thing that I want to add is a refutiation of some of the information that has been circulating in the news, and with friends of Mike's. Alchohol or drugs was not a factor in the accident. The coroner has finished his report, and the police are wrapping up their investigation. Neither rider was drunk or stoned, so despite the original news media reports, alcohol was NOT a factor in this accident.

Despite the good intentions of Mike's friends, NOBODY saw the accident happen. Other riders were in the area, and one of Mike's friends came upon the scene very soon after the accident, but nobody actually saw the accident happen.

Speed does not appear to be a factor either. Original stories that we heard was that the other rider was driving in excess of 70-80 MPH. This is wrong. The police reconstruction team estimates his speed between 40-43 MPH, well under the night snowmobile speed limit set by the Wisconsin DNR. Mike was either completely stopped, or very close to stopped when the accident happened.

Mike died within "seconds" according the coroner report, due to severe head and chest injuries. Both riders were wearing helmets.

We are still awaiting the final police report. At this time, it does not appear the district attorney is preparing a case against the other rider, which indicates even further that this was an accident. A horrible, possibly avoidable, accident, but an accident nonetheless.