UrbanTurf Puts Money Where Mouth Is, Part II

by Mark Wellborn

Two weeks ago, I posted that I recently took the plunge and purchased a two-bedroom condo in Logan Circle. That post outlined the specifics of the unit and my reasoning for buying. This second and final installment will cover everything from finding the unit to signing at the settlement table. If you have questions, post them in the comments section.

Front door of building

The Search

The properties that we feature on UrbanTurf are usually the result of hours of combing through homes on the DC area’s Multiple Listing Service (MLS). In early June, we came across a two-bedroom condo that we deemed worthy of our Deal of the Week feature.

I dropped by the unit toward the end of the first open house. The listing agent noted that 50 groups had come by in the first two hours, which based on the price and the scarcity of similar units on the market was probably pretty accurate.

It took two more trips back to the unit, a good deal of research about its value relative to condos of similar size in the neighborhood, and a long time pondering whether we wanted to put down the money that would be needed in order to make it happen.

To the last point, I won’t go into a great amount of detail about coming up with the down payment, but I will say that it came from wise investments made over the last ten years, contributions to a Roth IRA (that can be taken out without penalty) and other savings built up over the past few years.

Living Room

The Offer, The Negotiations and The Home Inspection

Our initial offer was $10,000 below the list price with a 3 percent credit to cover our closing costs. The counter offer was $5,000 below the list price and no credit to cover closing costs. We felt that another counter was pointless given that the unit was priced to sell, so after roughly 24 hours, both sides agreed to ratify the contract for $5,000 below the list price.

Knowing that we had agreed to the seller’s counter without any debate, our goal was to try to get a credit through the home inspection negotiations. The two-hour inspection revealed several items including a cracked back door, a non-functioning intercom, and a number of smaller issues that we felt should be fixed by the seller. The biggest issue was that none of the windows in the unit had “purchase”, i.e. a place to hold in order to open them.

The position we took with the seller regarding these repairs was to emphasize that they were unexpected costs. Rather than using the standard real estate form to present our case, we drafted a long narrative explaining the issues and asked the seller for a $7,000 credit, knowing that we would likely get half that amount. Five days and many emails later, the seller signed off on a $3,500 credit and also promised to make a number of smaller repairs worth about $750.


The Loan Approval

In the midst of all of this activity, we were collecting documentation for our loan approval. This was probably the most time consuming part of the process. It required collecting past W-2s, 1099s, federal tax returns, recent pay stubs and bank statements, and documentation of a homeowner’s insurance policy.

Because some of the funds for the down payment were coming from investment accounts, documentation was needed to show that the money had been transferred from the investment account to a checking account where all the money would be collected before it was wired to the title company. This part of the process made us realize how careful banks are being when approving loans. To make sure that the money was indeed coming from an investment account, and that we weren’t getting another loan to cover the down payment, the bank required an official letter stating the funds had been transferred. Even a copy of recent activity in the checking account showing that the money had been transferred from another account would not suffice. Our loan was eventually approved and a couple days before settlement, the bank issued cashier checks that looked like A-Rod’s per game salary.

The Big Day

On the day of settlement, we headed out to the title company in Bethesda and were soon seated across from the seller and listing agent. As a newbie, I found the proceedings a little awkward. I wanted to chat it up with the seller, talk about how excited I was to be buying the condo, etc. However, after a couple attempts, it became clear that she wanted to keep it all business, which was probably for the best in the end.

The closing proceedings are basically a chance to be reminded about everything from the interest rate you secured to how much you will be paying in condo fees. Also, it is a great chance to practice signing your name and initials.

The closing lasted around an hour and a half, and then we were officially homeowners.

I will happily answer questions about this process if readers have them, but reserve the right to keep certain information private. Just post them in the comments section and I will do my best to answer quickly.

See other articles related to: urbanturf, dclofts

This article originally published at http://dc.urbanturf.com/articles/blog/urbanturf_puts_money_where_mouth_is_part_ii/2397


  1. LEM said at 2:25 pm on Friday August 20, 2010:

    Funny a rod line. Did the negotiations with the seller get very tense?

  1. Nikki said at 2:34 pm on Friday August 20, 2010:

    Congrats! I was looking forward to the second installment!

    Two questions: First…did you agent encourage/discourage your strategy about adjusting the price after inspection?

    Are you going to open the kitchen to the rest of the space?

  1. Mark Wellborn said at 2:36 pm on Friday August 20, 2010:

    @ LEM—No, they didn’t get tense. I think that the seller felt the unit had been priced to sell and was unwilling to give much more than a $5K discount, but negotiations never got ugly.

  1. Mark Wellborn said at 2:55 pm on Friday August 20, 2010:

    @ Nikki—Thanks!

    Did you mean to ask if my agent encouraged me to ask for the $7K credit based on the repairs needed? The answer to that is yes, she recommended $7K, thinking that we would get about half that.

    As for the kitchen, we haven’t decided whether we will fully open it to the rest of the living area or just renovate the kitchen itself and keep the window opening the way it is.

  1. cyan said at 3:56 pm on Friday August 20, 2010:

    Congrats!  Nice space. Headed to my own first purchase closing in four weeks.  Now that the inspection hurdle has been cleared, I’m nervous.  I’m confident on financing and appraisal working, but I’m wondering if there are any other unknown and significant threats that could be managed. (I really want to give notice on my rental and move on!)

  1. Mark Wellborn said at 4:26 pm on Friday August 20, 2010:

    @ cyan—If the home inspection, appraisal contingency and financing are squared away, I think you are in good shape. It is hard to identify what issues might come up that would threaten the success of the deal, as those last-minute issues vary from transaction to transaction.

  1. Janson said at 4:57 pm on Friday August 20, 2010:

    At my closing, the seller “discovered” that they had pledged title of the condo toward another investment and that since the sale price was for less than the mortgage that they would have to write a $60,000 check at closing. That’s not something the buyer can really anticipate (I didn’t see the results of the title search until the closing).

    After four hours, the seller was able to find some money and borrow other funds, but I was basically sure that after two months of negotiation and inspection that the deal would fall through. To my relief, my agent had suggested that the seller and I not meet, so we signed papers separately, so I was only there for 45 minutes. The lawyer handling the transaction said the seller was among the most abusive he had encountered in his long career, so I’m sure this is an exception.

    Mark, thanks for sharing the details of what can be a mysterious process for a first-time buyer.

  1. Richko said at 8:42 pm on Friday August 20, 2010:

    >soon seated across from the seller and listing agent

    Wow, that’s never how it happens on HGTV!!! wink

    What a good read, Mark. Thanks for the great info about the Roth IRA, too.

  1. Sharyn said at 10:42 pm on Friday August 20, 2010:

    Congrats! We close next Friday and have also been jumping through hoops regarding documenting the source of our down payment. It is still TOUGH to get financing. That truly has been the most time-consuming aspect of the process.

    Glad to have an idea of how long closing will take. I expected that it would take far longer.

    Even though we’ve purchased a place, I’ll still be checking out UrbanTurf regularly. Love this site!

  1. roots said at 12:01 am on Saturday August 21, 2010:

    Congrats Mark and others closing on their home(s)!.

    Sharyn—I feel your pain on the financing process. It was insane. I understand underwriters have to be thorough but some of the stuff they ask for is ridiculous. For example, my wife and I sent in our letters of employment from our employers but they were a couple of months old by the time the financing process was over so they asked for a more recent letter! It was crazy. Worked out in the end I suppose.

    But for those in the process, proving your finances is no picnic in the park. Probably the most frustrating, time-consuming process of the entire deal.

  1. Diane said at 9:23 am on Saturday August 21, 2010:

    We used Roth IRA money for our downpayment as well.  If you’re counting on Roth money toward a first home, putting some of it in a safe investment (e.g., a Roth CD) is a good idea.  Also, we ended up taking more out of our Roth accounts than we actually needed and regret doing that—after all, the primary purpose is retirement. But, overall, it’s a very helpful provision for folks who started saving for a first home at least 5-10 years before buying (given the prices here, quite normal). There are a bunch of rules and a maximum withdrawal limit for penalty free withdrawals -you can find more info if you do a search. 

    You’re not alone with bank problems.  I ended up having to make a chart of all of our accounts to show where we had moved money from into our checking for closing and also giving them information on the withdrawal terms for the Roth, etc.

  1. Debbie said at 12:55 pm on Monday September 6, 2010:

    First-time visitor to your blog, but I just HAD to comment - your new home once belonged to my husband, and is where we lived when our first son was born. We sold the place in 2001 for more space for our growing family, but these photos sure do bring back memories! I have to say I’m sad to see all the beautiful painting we did covered up with white paint, but I guess that’s something fun for you to work on now! smile

Join the discussion

UrbanTurf now requires registration in order to post comments. Register here, or login below if you are already registered.

Click here if you forgot your password.

DC Real Estate Guides

Short guides to navigating the DC-area real estate market

We've collected all our helpful guides for buying, selling and renting in and around Washington, DC in one place. Visit guides.urbanturf.com or start browsing below!

Northern Virginia

Profiles of 14 neighborhoods across Northern Virginia

Looking to Give People A Reason to Stay Past 6pm
Happily Straddling the Line Between City and Suburb
Columbia Pike
Arlington’s Neglected Stepchild is Getting a Makeover
Crystal City
Turning Lemons into Lemonade
Lyon Village
Developing An Air of Exclusivity?
Hitting Its Growth Spurt
An Urban Village Hitting Its Stride
Del Ray
Virginia’s Small Town Near the Big City
Eisenhower Avenue
The Vibrancy Might Take a Few Years
The Quiet Neighborhood By the Beltway
Old Town
Mayberry By The Potomac
132 Commerical-Free Acres
Downtown Falls Church
Staying the Same in the Midst of Change
Tysons Corner
Radical Change Could Be On The Way

See more Northern Virginia »


Profiles of 14 neighborhoods in suburban Maryland

Small-Town Living in the State Capital
Bedroom Community Gets Buzzing Cache
Cabin John
In With The New While Maintaining the Old
Chevy Chase
Affluence, Green Lawns and Pricey Homes
Downtown Silver Spring
Experiencing a Resurgence After a Bumpy History
A Suburb on Steroids
Rockville Town Square
Despite the Dynamism, Still Somewhat Generic
Takoma Park
More Than a Little Bit Quirky
A Foodie Magnet on the Verge of Change
Capitol Heights
Kudzu, Front Porches and Crime
Glass Half Full or Half Empty?
Mount Rainier
Artists, Affordable Homes and A Silo Full of Corn
National Harbor
A Development Rises Next to the Potomac
Riverdale Park
A Town Looking For Its Identity

See more Maryland »

Northwest DC

30+ neighborhood profiles for the city's biggest quadrant

16th Street Heights
DC's Sleeper Neighborhood
Where (Almost) Everyone Knows Your Name
AU Park
One of DC’s Last Frontiers Before the Suburbs
DC’s Northern Neighborhood on the Cusp
DC’s 535 House Neighborhood
Cathedral Heights
Do You Know Where That Is?
Chevy Chase DC
Not to Be Confused With the Other Chevy Chase
Cleveland Park
Coming Back After A Rough Year
Columbia Heights
DC’s Most Diverse Neighborhood, But For How Long?
An Island of Serenity East of the Park
Dupont Circle
The Best of DC (For a Price)
Foggy Bottom & West End
Where the Institutional Meets the International
Forest Hills
Ambassadors and Adventurous Architecture
Fort Totten
Five Years Could Make a Big Difference
Foxhall Village
350 Homes Just West of Georgetown
Friendship Heights
A Shopping Mecca With a Few Places to Live
History, Hoyas and H&M
Glover Park
One of DC’s Preppier and More Family-Friendly Neighborhoods
A Posh View From Embassy Row
LeDroit Park
A Quiet Enclave in the Middle of the City
Logan Circle
Trendy Now, But Not By Accident
Mount Pleasant
Sought-After Homes Surround Main Street in Transition
Mount Vernon Triangle
From Seedy to Sought-After
The Long, Skinny Neighborhood at the City’s Northwest Edge
Park View
It’s Not Petworth
Penn Quarter/Chinatown
DC’s Go-Go-Go Neighborhood
Getting a Vibrancy of Its Own
The Duke’s Former Stomping Ground
Shepherd Park
DC’s Garden of Diversity
Spring Valley
A Suburb With a DC Zip Code
Not To Be Confused With Takoma Park
Not Quite Like Its Neighbors
U Street Corridor
The Difference a Decade Makes
Woodley Park
Deceptively Residential
Adams Morgan
No Longer DC’s Hippest Neighborhood, But Still Loved by Residents

See more Northwest DC »

Southwest DC

The little quadrant that could

Southwest Waterfront
A Neighborhood Where A Change Is Gonna Come

See more Southwest DC »

Northeast DC

Profiles of 10 neighborhoods in NE

New Development Could Shake Up Pastoral Peace
A Little Bit of Country Just Inside the District’s Borders
Not to Be Confused With Bloomingdale
H Street
A Place To Party, and To Settle Down
The Northeast Neighborhood That Few Know About
Michigan Park
A Newsletter-On-Your-Doorstep Community
Evolving from a Brand to a Neighborhood
Ripe for Investment Right About Now
The Difference 5 Years Makes
Big Houses, A Dusty Commercial Strip and Potential

See more Northeast DC »

Southeast DC

6 neighborhoods from Capitol Hill to East of the River

Capitol Riverfront
Still Growing
Hill East
Capitol Hill’s Lesser Known Neighbor
Congress Heights
Gradually Rising
Notable for Its Neighborliness
Historic Anacostia
Future Promise Breeds Cautious Optimism
Eastern Market
A More European Way of Living

See more Southeast DC »

Upcoming Seminars ▾