“The news isn’t good,” our realtor said. We had just received the home inspection report. Our septic system was completely failing. Everything – including the pipe that ran from the house to the far end of the septic field – was in bad shape.
Real estate, when it goes wrong, can be a total nightmare. Our home was built on permanently frozen ground in Alaska, and the only solution would be to replace it with a custom-designed above-ground septic system. The price tag would be $35,000.
The situation was already horrible enough, and this had been going on for years. We had been driven into debt, depression, and desperation over this house. This was simply the straw that broke the camel’s back.
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How We Ended up Here
The truth is, we no longer want our home. We moved out of Alaska to another part of the country in 2014 so that my husband could go to school.
The old house was a money pit when we lived there, and it became a money Grand Canyon after we left.
We ended up in this spot due to a combination of a cheap (read: bad) home inspection, lack of preparation, and a lot of bad luck. When we bought the house, we had tried to save a buck by having our realtor’s friend come out to inspect the home. He declared it in perfect condition, despite several pipes coming out of the ground at 45-degree angles. We tried to sell our house before we left.
When we couldn’t sell it, we rented it out to cover the cost of our mortgage during the slow winter months when the Alaskan real estate market virtually stops. Expense after expense cropped up – a few hundred dollars here, a few thousand there. This went on for two years. During those two years, we struggled to make ends meet. I couldn’t find a well-paying job, so I brought home only $500 per week as the primary breadwinner in the house.
Any gains we were able to make by painstakingly budgeting, saving money, and reducing our lifestyle were quickly wiped out by the ever-increasing home repairs.
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We had to take on more and more debt to pay for them. We started working more – a lot more. I learned how to do freelance writing, and my husband took on two part-time jobs in addition to going to school full-time. Even with all of this work, we were just running in place.
Bad Home-Repair News
Finally, the gods seemed to be smiling on us: We received an offer on our house just as we’d tapped out all of our potential to take on more debt. And then, we got the bad news. The home needed a $35,000 fix.
We couldn’t afford the repair bill. We couldn’t rent it out to cover the mortgage because the house was now uninhabitable. And we couldn’t pay the mortgage and utilities because our income will be dropping as my husband returns to school. We’d simply run out of options.
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Giving the House Back to the Bank
Now we’re going through the process of handing the house back to the bank through a deed in lieu of foreclosure. It’s our only real option to avoid an actual foreclosure on the house. Not everyone can do this. We first had to convince the bank we were going through hardship, and they’ve agreed that we’re eligible to pursue this option. Now we’re just waiting on completing the final paperwork.
It’s a bittersweet resolution: We’ll be free and clear of the mortgage, but it will have serious credit consequences that will haunt us for years.
The mortgage is in my husband’s name, and his credit score could fall drastically – almost as much as if he had actually declared foreclosure. The mark will stay on his credit report for seven years, meaning that we likely won’t be able to purchase a house again for a long, long time. We still think it’s worth the downsides, though. Who knows? Maybe now we can begin to move on and plan for our future.
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What We Learned From Our Experience With Home Repair
Frugality is a virtue, but in some cases, it can have negative consequences. If we had searched out the best home inspector – regardless of price – we would have learned the truth about our home and never have bought it in the first place. Believe me, we will not be repeating this mistake again. Finally, we learned that homeownership can be difficult, even if you play all your cards right.
Sometimes it’s waking up to a cold room when it’s negative 40 degrees outside. Sometimes it’s getting a soul-crushing phone call while you’re on a date with your husband and learning that you need to spend a few thousand dollars that you don’t have on a repair that you don’t care about.
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