How to Renovate a House on a Budget - Without Using Credit!

Since renovations have really been in the forefront of our minds lately (and realistically, running our lives), I figured I should write a post about how to create a nice home on a thrifty budget - without borrowing!  Here's how we've been able to pull it off:

1.  Start Saving Early! - 

About a year ago, Colin and I knew that there was a possibility we would be buying a home at our next duty station.  We also knew that houses come with increase costs.  Therefore, as silly as it sounds, we started putting $25 of each pay check into our savings account.  Sure, it's only $50 a month, but after a year, it magically turns into $600 that you didn't even miss from your checking account!  This is even easier if your online banking allows you to set up a direct withdrawal like ours did.  We didn't even notice the $25 being shifted after a while! 

In addition to this, we also started putting any checks we received into our savings.  This includes holiday money (yay for still getting money from your grandma on your birthday!), refund checks from rebates, closing accounts (like cable/electric), etc. etc.  Now, I understand that sometimes these checks are worth a lot, or you need a deposit from one thing to pay for the next.  Those checks can definitely be exceptions.

2.  Comparison Shopping - 

I am a huge believer in comparison shopping.  Now, I will admit that it takes a serious amount of extra time, but in the end I promise it pays off!  Every time we had something we knew we were going to need, I would look around online to see what the going rate was, and how I could beat it.  A lot of times a company you may never have heard of has a great deal on some wholesale product.  That's how we found our flooring!  I was determined to find someone who would sell us high quality flooring for under $2/ sq ft, and in the end I found it!

Something important to remember is that people have a lot of negative feelings about big box stores (Lowe's, Home Depot, etc.), and rightfully so.  BUT if you cash in on sales and study the store policies, you can get some great deals there too!  For instance, Home Depot has a really great program where if you find an add where someone else sells something for cheaper, they'll match that price and then beat it by 10%.  I'm pretty sure they bank on no one taking the time to read newspaper circulars, so prove them wrong!


3.  Waiting for Sales - 

When you move into a new house and the inspector hands you a list a mile long of things that "should" be fixed, it can be seriously overwhelming.  I know I personally had a miniature heart attack during the inspection, and definitely started to get the "in over my head" feeling.  However, once I broke the list down and put it into categories, and realized that not everything was going to get done right away, it wasn't nearly as scary.

The first thing I did was write down exactly how much each thing would cost at two different places.  Then, I mercilessly scanned the weekly newspaper circulars in our FREE Friday newspaper for what was on sale that coming week.  So yes, our dryer went without a vent hood for an extra week, but we saved money in the long run.

Holiday weekends are especially great for this.  However, if it's something that has a rebate, make sure you don't forget to send it in.  We bought all of our paint for the whole house over 4th of July weekend because Home Depot was running a special where for each 5 gallon you bought, they gave you $20 back, and for each 1 gallon you bought, they gave you $5.  So we bought what we needed for every room (even though we haven't even painted them all yet!), and went home to put in the rebate!  Then, Home Depot sent us visa cards in the mail for $75 that we can now use anywhere! So yes, we may have bought more than we needed right then, but it saved us almost $100 in the end!

Now, I just have to note here that this can also go the other way.  Something that drives Colin nuts is when a sale is going on, I feel like I should cash in on it because I know we'll be paying more for it later - even if we don't have the storage for whatever it is, or the money in the budget.  Sometimes it's definitely worth it to go for it, but if it overextends the budget, remember that sales usually do come back around.  For instance, the 4th of July paint sale that I mentioned earlier came back for Labor Day.

4.  Prioritizing -

Colin is a huge believer in this one.  Prioritizing can be difficult, especially when you feel like everything needs to be done and it all feels important.  We took one day after we actually moved into the house to sit down and look at what needed to be done, then we made a list of things that needed to be done due to safety concerns, and those immediately moved to the head of the line.  After that, we made a list that was dependent on when things typically go on sale.  For instance, getting chimney's swept is cheaper in the summer because people aren't thinking about lighting fires, so have someone come out in July, and yard stuff is nearly always on clearance at the end of the summer/early fall, so work on the yard projects then.  We also planned all of our big projects around holiday weekends.  That way we could buy the supplies on sale.  Once we were done we had a whole years worth of projects prioritized by season and necessity. 


5. Do the Work Yourself (or with friends!) -

 We have been so fortunate to have lots of great people come and help us with the dirty work of renovating a house (pulling up carpet, breaking up tile, chopping down trees).  Not only is it a great way to spend time with friends and family, but it's also much cheaper than hiring someone!  When we started this reno we were beyond beginners when it came to any household projects, but thanks to youtube and some parental direction we figured it out!  We have spent hours on end watching youtube about anything you can imagine (installing moulding, tiling entryways, installing new light fixtures where there wasn't one before) and it really has paid off.  Lowes.com also has great DIY videos with supply lists that I would recommend. 

The biggest obstacle that comes with doing the work yourself is buying the tools.  Now, borrowing is also an option, and one that we use frequently, but some tools are worth the investment.  We searched craigslist, garage sales, and pawn shops, but had a hard time finding inexpensive, used alternatives.  I'm pretty sure this is just a product of living in such a small area, but the end result was lots of tools that we had to buy new.  I had a hard time with this at first, but really once you buy a tool, chances are you keep it for life, so next time you work on a project the labor will truly be free!

6.  Get to Know Your Local Hardware Store - 

This one is so important!  I would recommend taking a trip to your local hardware store and just look around at everything.  Ask where they keep clearance items, and what their policy is on special orders.  For instance, our Home Depot (we don't have much else up here) has a clearance section for random items at the end of the isle by the light fixtures, but they also put all of the big clearance items (tools, cabinets, bathroom vanities), in the front of the store next to the contractor counter.  Knowing where these items are and checking them every time you visit can really help your budget.  We bought nearly all of our indoor and outdoor light fixtures from the clearance section and saved a bundle!

One important tip I learned from a Home Depot associate was that they tend to stock middle of the road products, and special ordering isn't always more expensive.  Therefore, if you have a price point in mind, ask someone about what they can do to help you meet it, instead of settling for something that costs more, or something that you don't really like.  When we were trying to find inexpensive door moulding, I asked someone about their special orders, and ended up finding something that I loved for only .51/ linear foot, when everything in the store that wasn't just a plain white line was over $1.  They set up the order, shipped it to the store for free in 1 week, and we got moulding for the entire house for less than $150. 





Now, obviously every case is going to be different, but these tips have worked for us (so far!) and we've learned an invaluable lesson about not buying what you can't afford, and the importance of saving for those good deals!  Not everything in your house has to be expensive, just look like it is :)  If you have any questions about our renovations, or would like referrals about products used, feel free to email me directly or leave it in the comments!

Update!

Let me start off by apologizing for the lack of posting in the last few days.  However, rest assured that it was for good reason!  Around 5pm EST on Thursday I got a call from our escrow agent letting me know that our paperwork was ready, and we could be contacted by a mobile notary ready to have everything signed as soon as the next morning.  By 8pm that same day I was contacted by a notary, and packing for the almost 4 hour drive the next morning!

I made the drive out to Connecticut, picked up Colin, and we headed to the seediest little restaurant to meet with a mobile notary and sign closing documents!  We are officially home owners!!!  Sure she may have been a little sketchy awkward, and made copies of our id's in the back of her car with an hp printer hooked up to a generator, but until I get the call that Kristin and Colin Podelnyk are robbing banks and stealing cars all over the north east, the relief of having this process done and over with is indescribable.  Colin says he wont believe it until we're there and he has the keys in his hands, but I say we singed papers saying we owe a lot of money to a bank, and that's as real as it gets!

Where the signing took place

On the down side, I woke up with a horrible sore throat, and I'm officially down for the count.  I'm going to take the rest of the weekend off to settle in and recoup but - I promise to be back in full force on Monday!  In the meantime, HAPPY EASTER!!!

2.5 weeks and counting until the movers get here!

Buying a Short Sale House

For the past few months my husband and I have been going through one of the most stressful processes known to man: trying to buy a short sale house.  Today, we got the great news that we'll be closing by the end of the month, so I figured I would write a little bit about our home buying experience so far.

First off, I want to clarify that buying a short sale can be a great deal.  However, it's also not for the faint of heart, or those in a hurry to move in.  We initially chose a short sale because we had finally gotten orders to WA, and had about three months to find a home.  Little did we know that three months isn't near enough time.  The name is so deceptive! :)

Here is the definition of a short sale from wikipedia: A short sale is a sale of real estate in which the sale proceeds fall short of the balance owed on the property's loan.  It often occurs when a borrower cannot pay the mortgage loan on their property, but the lender decides that selling the property at a moderate loss is better than pressing the borrower. Both parties consent to the short sale process, because it allows them to avoid foreclosure, which involves hefty fees for the bank and poorer credit report outcomes for the borrowers. This agreement, however, does not necessarily release the borrower from the obligation to pay the remaining balance of the loan, known as the deficiency.

After reading that, you'd think that a bank would be quick to sell these properties, in hopes of keeping them out of foreclosure.  However, it was a foreclosure notice that finally got the bank rolling on our offer (nearly four months after we initially presented it).

Here are the top things we wish someone would have told us, before we entered into a short sale contract:

1.  Be ready to offer full price.
This isn't like a regular sale where the seller is ready to bargain with you.  Whatever the list price is, is usually the price agreed upon between the bank and the seller to minimize loss.  In our case, it was almost $45,000 below the appraised value of the home - so you are still getting a good deal!

2.  Make sure you have at least 6 months of wiggle room before you need to move in, but the flexibility to move in earlier if need be.
Since you're dealing with a bank, you never know what the timeline is going to look like.  Even with the best realtor and mortgage broker it's tough to guess what a bank is thinking and what their time lines are.  They're in charge, and can pretty much do whatever they want.  The bank we were dealing with broke deadlines written in contracts multiple times, but this also allowed us to threaten to walk away or change what we were asking for, so it could work in your favor.

3.  Nominate one person to be the point of contact for the realtor and the mortgage broker, but use speaker or conference for those important phone calls.
Having everyone contact me instead of trying to get a hold of either Colin or I, made things so much easier and also facilitated a relationship between all of us that allowed me to be frank with them when I needed to be, and provided consistency for them when looking to get a hold of someone.  However, after multiple conversations where I would try and reiterate exactly what they had said to me back to Colin, we decided to let our realtor know that if it was really important, we would like a call in the evening so we could speaker phone and both be part of the conversation.  This was essential in our cross country dealings.

4.  If you aren't within driving distance, plan for at least two visits.
We had to make two visits across country throughout this process, one to find the house, and another when I thought I was going to have to look for a new one, but ended up doing an inspection instead!  I would say that because the process is so lengthy, it's good to see the house again closer to closing not only to remind yourself of what you're buying, but also to check in on how it's doing.  Since it will more than likely be vacant, it's nice to know if things have gone down hill since you were last there.  For instance, when I went back a second time I found out that part of the back fence had fallen down.  It's now something I can plan for/save money to fix once we get there.  It was also nice to be there for the inspection so he could show me exactly what he was talking about, but I think the report was good enough that it would have been fine to have the realtor there for us if we couldn't make it.

5.  Find a realtor you can really trust, be honest with, and who has your best interest in mind.
Since this is a long, drawn out process that you have little control over, it is so important to have someone who understands your needs representing you throughout the process. We had a realtor who represented both the buyers and the sellers, which we initially thought would make her more driven to seal the deal, but it actually left her more conflicted about who she was fighting for with the bank.  *Aside:  If you're in the military, it's important to have a realtor who understands that our schedules are super unpredictable and can change at the drop of a hat.  Having no control over the house you're buying and the military doubles the stress.

6.  When it comes time to sign the papers, be ready to move at the drop of a hat!
When the bank decides it wants to close, there's nothing you can do to slow it down, and it could be longer or shorter than you had planned.  Be sure you have access to a computer, fax machine, notary, and fed ex so that you can send and receive documents at any time.
*Aside:  For military buyers, keep in mind that if your husband is deployed or out of town, the bank will only accept a POA for either opening or closing documents, so make sure you are both available for one or the other.  If you need to get documents noterized, navy legal will do it for free.

That's it!  I know this is one of my longer posts, but there is a lot of information that goes into buying a short sale.

Our new home!

Feel free to ask any questions in the comments and I'll do my best to answer them!  I'll also update on the closing process once we move into our new home!