How I did it: I found a house I LOVED on realtor.com, in the area we wanted to buy, but it was very much out of our price range. I showed it to my husband and said, "This is the sort of place I'm looking for." Even though I knew I couldn't get it, I bookmarked the page and checked back occasionally to look at the photos.

One day when I looked at the page, I saw that the price had been reduced by $30,000, making it much closer to our budget. I also saw that there was an upcoming open house. Armed with a camcorder (since my husband couldn't go) I headed over that Sunday to take a look. It was even better than the pictures, and I fell in love. I called my loan officer (who we had worked with the last time we tried, unsuccessfully, to buy a house),  and made an appointment. When we met with him, we showed him the specs on the house, and all our finances, and got the preapproval for the loan. He recommended an agent, and I had her arrange for us to go look at the house again. This time my husband went along. He was really pleased as well, so we made an offer.

Then began over 8 months of waiting. See, the house was a short sale, which means that the seller is marketing the house for less than he owes on it (usually because of some financial emergency, which makes it impossible to wait for the market to improve). The lending bank must then agree to take less money for the home, and be "shorted" the rest. In this case, the owner had taken out a second mortgage, and then had an unfortunate divorce, and could no longer afford the home.

It took about 4 months to get an answer from Bank of America on whether they'd accept our offer. Finally they agreed. It took a few more weeks to actually get the paperwork from them. We set a closing date just after Christmas. It looked like we were all set.

Then I lost my job. The business where I'd been working for nearly four years closed down. I had to scramble to find new employment so that we would not lose our loan. In addition, the appraisers came in and the house appraised for $14,000 less than our offer.

We canceled the closing and tried to figure out what to do next.

On all fronts things looked bad. I was pretty sure Bank of America would reject the lower amount (you cannot get a loan for more than the home is worth, so the sale price had to be lowered to the appraisers' total). We appealed the appraisal to no avail.

I got a new job (not a great one, but a job) and with some determination and finagling, got my lending bank to approve our loan.

Incredibly, Bank of America responded within less than two weeks to accept the lower offer. (Why did it take so long the first time, I wondered?) We set a new closing in mid-February and got everything in order.

The closing itself was probably the easiest part of the whole ordeal. I'd been prepared for it to be a nightmare, based on other people's horror stories. But I knew it would go well when the seller's agent pulled out half a dozen mini Jack Daniels bottles and passed them around, saying "I think we all deserve this."

My husband and the seller actually got to be good friends. Turns out they have a lot of interests in common. We could hardly get them to stop talking long enough to sign the paperwork.

I am really proud of myself. I stuck by this when it looked impossible. My husband and I worked really hard, and lived lean, and managed to save $11,000 in less than a year, more than was needed to close. My patience and determination paid off, and we got a wonderful home at nearly $75,000 less than the original asking price, with mortgage payments only $250 more than we were paying in rent at our last house (and we own this one - equity, no landlord, I can decorate, and we have MUCH nicer neighbors [last place had an auto shop and motorcyclists]).

It wasn't always easy. There were tears, arguments, and times when I was ready to throw in the towel. But we didn't give up, and we couldn't be more pleased with the results. Now there is room for a baby. :)

Lessons & tips: I wouldn't recommend a short sale (or foreclosure) unless you ADORE the home and are prepared for the headaches and heartache that the purchase may entail.

Always have more money in savings than you think you'll need. The more you have, the easier it is to get a loan as well.

Find a good loan officer and real estate agent. They are invaluable. Word of mouth is best. If you live in Maryland, I will recommend my people. I couldn't have been happier. You know you have a good loan officer when you call him crying because something is not working out, and he takes the time to reassure you and figure out a solution. (I feel bad for the guy. I was not an easy customer.) We were also fortunate to have an experienced agent working for the seller, who was tireless in her efforts to get the paperwork to go through.

For buying homes in general, research the area, see as many homes as you can to get a good idea of what various homes are worth. This helps you to know if you've gotten a good deal on your chosen property. My husband had lived in the area, and we'd done extensive research the first time we tried to buy there, seeing everything that was for sale. This time 'round, I only looked at this one home. But that's because I knew I'd found a gem.

Get a good inspector, and listen to what he has to say, even if it's heartbreaking. We had to withdraw an offer on a home once because the foundation was faulty. You don't want to have problems that are beyond your resources to deal with, and will make the home hard to resell. Fortunately with our current home, there was very little that needed attention, and nothing at all major.

Resources: realtor.com is a great place to start to get an idea of what is available in your price-range. Always go above your budget a bit in your search. You can often negotiate down to what you can afford.

Ask friends and family for recommendations on realtors, loan officers, inspectors, insurance companies, etc. Word of mouth from someone who is happy with a service is the best way to find what you need. Many thanks to my sister-in-law who recommended our loan officer, who in turn recommended our agent, who then recommended our title company. It's like a chain reaction.

Jul 08, 2011, 09:49AM PDT | 0 comments | 10 cheers