The art (and horror) of the deal
The only problem
with finding an apartment that I liked and could afford was that I found it with the wrong agent.
I had no real
issues with “Karen” other than a vague lack of confidence, but somehow it felt
wrong that one flighty agent could find me the right place within three hours
when one diligent agent couldn’t find one in eight months.
I composed an
email to Sidney thanking him for his service and letting him know I was off the market for awhile.
That was true enough. A wave mixed of relief and regret washed over me when I
clicked the send button.
Because it was already modestly priced, Karen and I decided to offer $10k less than the $249,000 asking price as a starting point for the circa 1950s co-op in Fort Greene. That went over with a thud from the seller, who would come down only $2,500.
While
I thought this was ungenerous, Karen urged me to take it or risk losing the
apartment. Knowing that I’d have to renovate the kitchen and the bathroom, I
pressed her to counter-offer. Instead she offered me reduced-price services for
her husband’s contracting business.
“We’ll set you up
with our discounts and you’ll make up the difference in those savings,” she
said. And, so in the first week of December 2011, the seller and I agreed on a
price of $246,500.
That set in
motion a process of retaining all the people who would help make it happen: my
credit union loan officer, a engineer who would inspect the unit for faults,
and an attorney to represent me during the contract period and closing.
The last time I
had to use an attorney, I put my finger down in a phone book and hoped for the
best. It was a disaster that I didn’t want to repeat.
It occurred to me to ask a friend’s husband, a real estate lawyer, to represent me. He would return my calls! He would personally oversee my case! He would take care of me! I was happy and relived when he accepted the job. He even recommended an engineer — the path to home ownership was off to a good start!
It was
short-lived joy. When I called my credit union, which was so reassuring nine
months earlier, I learned that they did not, in fact, finance co-ops. I was
irritated because the only reason I kept my credit union account—an
18-year-long inconvenience—was for this very moment. And now I had a major
fail. But since I was already pre-qualified, Angela, the loan officer, said she
would personally refer me to a mortgage broker named Bob who had worked with other credit union customers.
I bucked up and
called Bob. He seemed friendly enough—until he found out I am a freelance writer. The
jovial getting-to-know-you patter quickly dissolved into resignation—the same
dropped tone my mother gets when I’ve done something that disappoints her but
she can’t quite articulate it.
“Well, that can be a challenge
especially coming on the heels of a recession,” Bob said. “And I’m going to be
honest with you, it’s going to be hard to sell you to a bank.”
The hair raised
slightly on the back of my neck. I had years of experience at top-tier publishing companies in the city, about $100k in the bank, was
debt-free—always paid my credit cards off in full each month—and I had a credit
score of 797. The idea that I might not pass muster seemed incredulous.
Bob instructed me
to send him two years of bank statements for review. My credit union had only
one year in electronic form, so I scanned the prior year for all four bank
accounts (checking and savings for personal and business), all my other
investments, and emailed the whole impressive lot to him.
Then I waited.
And waited. After five days, Bob called and needed proof that I was, in fact,
the owner of my business account.
Again,
no electronic form for that, so I trudged into the credit union office for a
notarized letter affirming my account status. I glared at Angela when she came
to the window with the freshly inked note.
Two more days of
waiting for Bob. Then came the call that would change everything.
“I’m sorry, but
you just don’t show the income for us to give you a mortgage,” he said. The
rest of the conversation was a blur of phrases like “debt to income ratio” and
“stated income loan” and “alternative documentation.”
He explained the
maximum loan they could give me would leave me with more debt than the
recommended formula, based on my income showings. The income was, in fact, there,
but the aggressive deductions my accountant had taken left me very solidly
middle class in a city that was increasingly not so.
I couldn’t even
thank Bob, and ended the call with a choked goodbye. The great irony of my
situation set in: On paper, I could not afford to buy an apartment whose combined
mortgage and maintenance was $250 a month less than my current rent.
And still a
greater irony: out of the six kids in my family, I was the only one with all
the trappings of a successful life, yet it was all of them and not I who owned
their own home sweet home.
Next up: The bank
mill
Elle Bee is a lifelong renter currently in the process of buying a Brooklyn apartment, recounted in her bi-weekly column, Diary of a First-Time Buyer.
Related posts:
My Big Fat Board Interview column
What I learned from 150 apartments before I finally bought one
Here are 7 things your lawyer should tell you when you buy a condo or co-op in NYC (sponsored)
A single guy reveals why he took the co-op plunge -- and how he basically lives for free
Unraveling NY real estate spin--one white lie at a time
To pass your co-op board interview, read this first
16 things I wish I knew before buying this place
A NYC real estate lawyer reveals the 14 biggest surprises for first-time buyers (sponsored)
Confessions of a preconstruction buyer
The 7 worst places to live in a building
Your next place: 9 questions that separate the New Yorkers from the rookies
