The house that got away

Flickr photo by hans.gerwitz.

Q: My wife and I were house hunting for months, and finally found a place we liked. Amazingly, since we had been outbid so many times before, we were able to get into contract on it. We had all the normal inspections in our area -- termite, home inspection and a roof inspection -- and they did find some things that needed to be worked on, but there were also some really great upgrades and improvements that checked out OK.

Right before we were going to remove our inspection contingency, I asked my friend, who is a contractor, to come out and inspect the house, too. He didn't even walk inside -- he said he didn't like the way some of the things he could see on the home's exterior were done, and that the inside work was probably "no good" either.

He said he wouldn't pay anymore than $200,000 for it -- and we were in contract at over $250,000! I immediately called our real estate agent and canceled the purchase. Now, months later, we still have no house, and we can see the tax credit about to pass us by. I still think about that house all the time and wonder if it was the one that got away.

A: Well, the fact that the tax credit deadline is looming is really of no significance, except that it might have been the spark to your regret. It's a great incentive to be out looking, but certainly not enough to warrant buying a home you wouldn't otherwise.

I have worked first-hand with more than one set of clients through fact patterns extremely similar to yours. So, I have lots of thoughts about how you can meaningfully reflect on, analyze and gain lessons from your experience.

My first observation derives from a rule of mine: If your contractor friend is your ultimate decision-maker, then he should have seen the place before you wrote an offer on it. Now, it might sound extreme to your ears to hear me call him your "ultimate decision-maker," but think about it -- that is precisely the power and position you put your contractor friend in.

You said the home had passed the muster of you, your wife and at least three inspectors (who, by the way, make a living advising homebuyers on property condition for the precise purpose of informing their decision whether to buy), but that your friend's word -- without even entering the home -- was enough to make you cancel the deal.

From this -- the fact that your friend was your ultimate decision-maker -- I derive two lessons for you, and pieces of advice going forward. If he's going to be your ultimate decision-maker, he should be seeing properties with you or, at the very latest, before you write an offer.

In every event, he should be the first to see a place before you spend money on professional inspectors. OK, that was the first piece of advice.

The second piece is that I recommend you spend some time deciding whether you are comfortable with him making your decision for you. If so, fabulous. If that makes you at all uncomfortable, though, I would like to offer you some thoughts. ...CONTINUED

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