The blue brick row house with leaded-glass windows and carved pine mantels was like red meat dropped into a pen of starving lions. Potential buyers rushed the heavy wooden door at 1 p.m. as the open house began. Seventy-five people trooped through in two hours. The next day, two offers were submitted and more were being prepared.
Now it's Monday night. Tough luck for those who dared ruminate for more than a day about the largest investment most people will make in their lives. At 7:45 p.m., the owners of 414 Fourth St. NE on Capitol Hill formally receive the first two offers.
Around the corner, on E Street NE, a man, a woman and a golden retriever are strolling in the balmy twilight. They can't help themselves: They walk past the blue place--twice--peering up with furtive longing. The second time is right at the moment the offers are supposed to be presented. "Oh boy, it's beginning!" squeals the woman.
They both just got promoted to challenging new jobs in Washington, and their bungalow in Newport News, Va., was recently sold. Now they and their golden retriever and two gregarious cockatiels are squeezed into temporary quarters, a one-bedroom basement apartment with low ceilings.
By day they strive to excel at those new jobs, while by night and on weekends they search for a place to live. Unfortunately for them, they have left the sane acres of Tidewater and plunged into the wildest real estate market Washington has seen in a decade.
Any minute now, the chirping of their cell phone may signal salvation. Their real estate agent is supposed to call with news that--fingers crossed--their offer for the blue house has prevailed.
"This may be premature," says the woman, "but do we have anything to celebrate with?"
The story of Lance Bush's and Shelley Canright's five-month search for a dream house in the city is not the most horrific Washington real estate adventure you could find these days, nor is it the smoothest. But it's pretty typical in a sizzling market where, basically, sellers are masters of the universe and buyers are defenseless blinking prairie mammals.
The District of Columbia, that much-maligned chewed-off diamond between Maryland and Virginia, is all the rage, along with some of the suburbs closest to it. Home buyers are engaging in all-out bidding wars for the right to pay breathtaking prices to live in neighborhoods that only a few years ago drew sneers from people hastening farther out. Now some more are asking whether it's worth driving featureless distances to one of those swollen postmodern McMansions being swallowed by its own garage. A 90-year-old D.C. row house has more character in its toe-molding. And guess what--being just blocks away from an excellent restaurant, a gourmet market or one of the greatest museums in the world is kind of special.
Earlier, Lance and Shelley looked at another house on the Hill. Hideous. It listed around $350,000 and sold for about $400,000. "We wouldn't pay $250,000 for it," says Lance. "People are losing their heads in the market."
That was one thing they promised themselves.
"Even though it's a crazy market, we're not losing our heads."
Now it's an hour later and the cell phone rests like a holy relic on the glass patio table behind the apartment, which is also on Capitol Hill.
The phone is very quiet.
Lance, 35, and Shelley, 41, are tense but cheerful. Shelley is the eternal optimist. She believes in the power of positive thinking. Today at work, she kept the image of the blue house in her mind. The real estate agent's one-page sales pitch had said:
Welcome to Perfection. . . . Stunning 3 BR Victorian with 1 BR rental unit. . . . Original wood detail and hardwood floors, high ceilings . . . accentuated by the exceptional light.
Lance is an optimist, too, but he sometimes camouflages this behind a relentless attention to stubborn facts. He thinks he loves the place, but he's wary: The open house had been a rush; there had been other listings to see. By the time they realized they felt passionate about the blue house, it was too late to go back for a longer look.
"We saw the home all of 15 minutes," Lance points out. "And you're investing $300,000. It takes me longer to pick out a tie."
Still, they don't lose sight of how lucky they feel to be here at all. The reason they are sitting on the rented patio as the stars come out above Capitol Hill is that they are both interested in outer space. When they met 10 years ago, Lance was a space vehicle designer at a NASA research center in Hampton and Shelley was a former sixth-grade science teacher who had applied for NASA's teacher-in-space program. Shelley didn't get to fly, but she did land a position supporting the agency's education initiatives.
Now Lance has been picked to manage its efforts to spur commercial interest in the International Space Station, and Shelley has been named to coordinate NASA's education technology programs. Their house search is charged with that fresh, fleeting feeling that many D.C. transplants experience, that sense of being elevated to The Show.
The blue house is approximately the 40th they have considered, the second one they have offered to buy. Their offer is strong: $295,000 (the asking price plus $100), a loan qualification letter and a willingness to close the deal at the sellers' convenience.
The phone chirps.
Lance snatches it, listens for a moment, rolls his eyes and says: "Oh, geez."
Shelley is trying to decipher his face, a mask with a slight smile. "He's so controlled!" she says.
Lance hangs up and says, "The offers were identical."
The next day, a third offer will come in--identical to the first two.
Now they will have to dig deeper, come up with another "best offer" while even more potential buyers tour the home.
"Some of these decisions are easy," says Lance, "because we don't have all the money in the world."
Shelley is slightly more adventurous than Lance about spending. She had been willing to offer a few thousand more in the first place--and then the blue house would be theirs. She reminds him of this.
Shelley: "I feel like I've already invested something emotionally in this home."
Lance: "Even though we've only been in it 15 minutes?"
The last time the blue house was up for sale, in 1992, it lingered awhile before selling for $240,000. Two years later, there was a carjacking right outside. Similar homes nearby dropped to $180,000. Now the market is forcing Lance and Shelley to uncharted highs.
They sold their bungalow in Newport News for $89,000, and Lance accepted an offer of $90,000 for his pre-Shelley condominium on the beach. They knew they would have to pay more in Washington--they figured double the price of the bungalow. They set an initial spending cap of $180,000.
The Hill had the diversity and historic urban architecture they loved. Then there was the magic of living amid the movie-set images of monumental Washington, turning a corner and seeing the Capitol.
Their first open house on the Hill was in an old row house. The $240,000 asking price was out of their range, but they found an agent, Judi Seiden of Prudential Carruthers, one of the top agents on the Hill.
Seiden instructed them in her little ritual for enforcing decisiveness. She would hand them fact sheets on each house. Lance and Shelley were allowed to hang on to only one at a time. After seeing another house, Seiden would force them to choose which they liked most, and rip up the loser's fact sheet. At the end of the day, they'd be left holding one sheet, and Seiden could say, "If you like it so much, why don't you buy it?"
She had other sayings for Lance and Shelley, enunciated in her patrician Boston accent: "Remember the mantra--if not this house, then something better." And: "Don't worry, whatever you buy, I'm only going to sell it for you in three years."
By seeing to it that Lance and Shelley got a feel for what was available on the Hill, Seiden also prodded their price education. They now understood that their cap had been unrealistic. They increased it to $250,000.
The first house Lance and Shelley felt passionate about was on F Street NE. It wasn't even on the market yet. That's one of the best ways to get a house these days. The catch was, the owners hadn't come up with a price. They asked Lance and Shelley to make an offer.
Lance put pencil to paper. He had a list of six comparable house sales, all on E or F streets NE. By relating their features to their prices, he realized he could produce a series of algebraic equations.
Be + .5Ba + G = $30,000
Be + 1.5Ba = $25,000
Be + .5Ba + G + FE = $64,000.
And so on, where Be means bedroom, Ba means bathroom, G means garage, and FE stands for the axiom that being closer in, on E Street, is more expensive than being farther out, on F Street.
Then he solved the equations. This is not easy when there are four variables, but if you work for NASA, you can do it. His equations told him the cost of an additional bathroom is $3,500, a bedroom is $19,750, a garage is $8,500 and being one block closer in is $34,000. He used these values to calculate the market value of the house for sale: $270,000. QED.
Lance typed up his analysis. It ran to six pages, including three appendixes. He faxed it to Seiden. She called back.
"I just picked myself up off the floor," she said.
Still, she thought it was a reasonable offer.
The seller countered with $300,000.
Lance and Shelley liked the place enough to propose $280,000--raising their spending cap another $30,000.
It wasn't enough. The seller put the house on the market. It recently sold for $317,000.
So much for algebra.
They up their maximum to $300,000. They tell themselves this is the absolute final spending cap.
And they go back to places they have already seen and not been totally thrilled by, like a house on Third Street NE that seemed gloomy and cramped. It lists for $289,000.
"There's no closet on this floor," says Lance, downstairs. "I don't have a closet on my first floor," counters Seiden, who also lives on Capitol Hill. "It's very common."
"Where do you put your coats?" asks Lance.
But with market fatigue setting in, they flirt with compromise. "I think this has more potential than I originally thought," Shelley says.
Two days later they attend the open house for the blue house, whispering to avoid being overheard in the crowd of potential rivals. They decide not to fool around. Seeing the algebra house go for so much taught them a lesson. They offer the asking price. And it only buys them another chance to offer more.
"It kills me we're not negotiating," Lance says.
The pot now stands at $295,000. What's the smart raise to make?
They talk buyer psychology with Seiden. Going to $300,000 is too obvious.
How about $301,000?
But if you were the other guys, and you were trying to psych out what Lance and Shelley were going to do, you'd say, "They'll go to $300,000. So we must go to $301,000."
Lance and Shelley decide to offer $301,500, busting their absolute final cap.
They agonize over whether they can afford it. They sit in a red upholstered breakfast nook at NASA headquarters and Lance punches numbers into his calculator. If they apply the extra salary from their promotions to mortgage payments, and they rent out the blue house's basement apartment, they should be all right. But there won't be much left over.
Later that day Shelley has to go to a conference in College Park. As a talisman, she is carrying with her the house's description, Welcome to Perfection, which she glances at periodically.
Lance is already home in the basement with the birds and the puppy when Shelley returns.
"We got the house," he blurts.
Shelley rushes to embrace him.
Lance was going to buy some champagne to celebrate. He even walked the aisles of a liquor store after work. But something stuck in his mind.
"Judi's reserving her champagne until after the inspection," he says. "I'm kind of thinking she knows how these things work."
Hamilton Humes and Marianna Knight have loved living in the blue house.
Hamilton, 36, is acting customer service director for the Federal Emergency Management Agency, and Marianna, 36, is VP for operations of a market analysis firm.
Hamilton bought the place in 1992, before he and Marianna had met. After they got married, they wanted a place that was "theirs" rather than "his."
They found a house with a back yard they liked in north Arlington, where many of their friends had settled. Then they spruced up the blue house to attract buyers. From 10 p.m. to 2 a.m. on weeknights, they repainted the inside. They know Welcome to Perfection isn't perfect, but at that price, in this market, they feel they are in a position to leave other improvements to the buyers.
The couple that submitted the identical offer Monday night decided not to go higher, and the offer that came in the next day was too late to be invited into the second round, according to listing agent John Plank of Long & Foster. Lance and Shelley's exquisitely reasoned $301,500 won without any competition. So much for psychology.
The second time Lance and Shelley see the inside of the house they have just agreed to buy for almost a third of a million dollars, they are in the company of inspector Joe Sherman, a man being paid $350 to find everything wrong.
Hamilton and Marianna are there when they arrive. Hamilton has made coffee. Nice. But Lance and Shelley feel a little awkward having them around. Shelley goes on a tour with Hamilton, who is clearly house-proud, a fact she files away as possibly useful intelligence.
Lance trails after Sherman. It's a brutal four hours. He expects to find things wrong with a 90-year-old house, but as the problems Sherman uncovers pile up, Lance begins to think of how many weekends and how much money it's going to take to fix them. At one point Sherman sees a stricken look on his face, and the inspector stops and says, "Are you okay?"
Sherman deems the house's condition about average for the Hill. In his report, he writes: "I found a number of problems with all aspects of the house." He lists 13 things that he recommends be taken care of before Lance and Shelley buy, plus some less pressing concerns.
Under the terms of the contract, Hamilton and Marianna must have electrical, plumbing and other systems in working order. Beyond that, Lance and Shelley can ask for more repairs. Hamilton and Marianna can agree or not. If not, then Lance and Shelley must take it or leave it.
Seiden also tells them that the third offer from the first round stands as a backup if theirs falls through.
"It almost makes us feel we can't be very particular about what we want fixed," Lance says, "because these people will say, 'Forget it, we got this other offer.' "
Things could be worse. At least Lance and Shelley have not been forced to follow the example of some desperate buyers who waive the inspection. Nothing appeals to a seller considering multiple offers so much as buyers willing to take a place as is.
Sherman says he's getting a lot of calls from buyers asking how risky it would be not to fix the problems he finds, or how much it would cost to do the repairs themselves. Heaven forfend that sellers be asked to do anything.
This is where Lance and Shelley are going to make a small stand against the madness. They are sitting under the skylights in Seiden's office across from the Eastern Market, deciding what repairs to request.
"You're buying a house that is 100 years old," Seiden reminds them. "We're not going to come back and give a laundry list of repairs."
She adds, "Also we're aware this is a seller's market, and there is a backup offer."
There is a silence. Seiden beams her best have-courage smile.
Lance isn't swayed by the this-old-house argument.
"Some of the major things wrong have nothing to do with the age of the house," he says. "Somebody put a cheap roof on the garage. Somebody closed in the washer and dryer. Somebody closed in the attic."
He figures the house needs $15,000 worth of work. He wants to list everything, and then, to show they are reasonable, ask for a credit against the sales price for only part of that. But how much?
As Shelley watches her husband make his case with increasing vehemence, she can't say she entirely agrees with him. And even as he is listing the faults in the house, Lance knows what she is thinking. He feels forced to be the hard guy in such negotiations, because he thinks Shelley may play it too nice. He doesn't relish this role. He can feel her thinking that he's blowing the deal.
"They can say no to any of these things," Lance says of his list of repairs.
"Come up with a number, Lance," Seiden says.
They are drinking water out of paper cups. Lance is figuring on a piece of paper.
"Six thousand dollars."
Seiden can see this deal dying before her eyes.
"You asked me what I want, Judi."
"My mistake," she enunciates through that smile. "Yes, but let's be reasonable."
"All they have to say is, 'We're not going to pay for it.' "
"The strategy," Seiden says, "should be not to turn the sellers off before they've had a chance to look at the whole message. . . . If you come back with $6,000, the answer is going to be no."
"What's the point of having an inspection if you can't give a list?" Lance wants to know.
Seiden has an idea.
"Why don't you make this warm and fuzzy?"
Write a nice letter to the sellers. Tell them how much Lance and Shelley admire the place. Then, in the nicest way possible, slide in the problems and ask for the credit.
Lance and Shelley leap at the idea. Still, Seiden is pessimistic. She doesn't tell them what she's really thinking: "I hope this has a happy ending. I'm not so sure about it."
The top of the two-page typed letter is pure syrup. Lance and Shelley recall the happy encounter with the sellers at the inspection.
"The coffee was just to Shelley's liking and this simple gesture clearly demonstrated your warmth as a couple, as well as the warmth of the home."
"The home inspection is an interesting process."
Prefacing with "we all hope we can age as gracefully" as the blue house, Lance and Shelley list the problems.
"Having just gone through the procedure of selling our homes," they write, "we are sensitive to the strain of addressing all of the home inspection issues."
Then they ask for $6,000.
They are drained. This has all been exhausting. They've had to deal with selling their places in Virginia. People at work are asking how the house search is going. There's no escape. They just want it to be over.
The sellers have 48 hours to respond. The next day, a message comes to Seiden at her office. The sellers have a question about Lance's and Shelley's letter. It's like a note from the jury room.
Seiden is delighted. This is a good sign. The sellers haven't rejected Lance and Shelley's wish list out of hand.
Hamilton and Marianna want a clarification about problems with the boiler. Once they have the answer, the verdict is swift.
Seiden calls with the news, but she is mysterious on the telephone. She doesn't say what the sellers' response actually is. She wants to discuss it over supper. She tells Lance, "Maybe we'll have a reason to celebrate."
Lance and Shelley can guess what this means: The sellers haven't agreed to the $6,000, and Seiden wants to soften the blow.
"Any guesses what they came back with?" Shelley asks on the way to the restaurant. She predicts $4,500.
"I say half," says Lance.
"We're really in the home stretch now," Shelley says.
"We're just exhausted," Lance says.
Seiden meets them at La Brasserie on Massachusetts Avenue. They select an outdoor table. A bottle of Moet & Chandon arrives with appetizer plates of escargot, asparagus and cheese.
"I need to congratulate you, and give you good news and bad news," Seiden says. "The good news is we're here today and these people didn't say go fly a kite, which was quite frankly my concern."
The sellers have answered Lance and Shelley's letter with a one-page letter of their own, which Seiden now passes around.
It begins: "We're glad that you like our home and are sure you will enjoy living there as much as we did." Later: "By the way, we think that the improvements that you are planning on making to the house are great."
They offer a credit of only $1,000, in addition to the minimum repairs required under the contract.
There is a long silence as Lance and Shelley read. Then Lance says in a low voice, "May I have a pen?"
There is another silence as he marks up the letter.
"This is a better response than you could have expected," Seiden says.
Lance doesn't know what she's talking about. He feels the way you do when you take a risk in a social setting, let your guard down with a personal confession, say, and people laugh at you. As calculating as the warm and fuzzy letter was, Lance really meant it. It seems to Lance as though the sellers are brushing off the reasonable concerns of sincere people. And they sure aren't meeting them half way.
"I don't like being taken advantage of," Lance says heatedly. "I don't like being belittled. I don't like being patronized. . . . If someone says, look, we're in a good position, we don't have to negotiate, I'd rather they say that than be patronized."
"I don't see patronizing" in the sellers' letter, Seiden says.
Lance: "Patronizing is taking you for a buffoon. . . . All the terms throughout this process have been dictated to us."
Seiden: "Seller's market."
From the restaurant patio they can see the sun setting in orange splendor on the row houses of Capitol Hill.
The day before, when Hamilton and Marianna received the letter, their reaction had mirrored Lance and Shelley's. They felt like the fools. Here they had stayed up until 2 a.m. painting. They had set a lower price than they could have.
"We felt we bent over backwards, and they were trying to pull a fast one," Marianna said.
"We felt we were being nickel-and-dimed," Hamilton said.
Marianna advocated taking a hard line: "Not one penny more. . . . Take it or leave it."
But Hamilton felt the $1,000 credit might be in the right spirit, sending the message: "We're not trying to screw them, just don't screw us."
Now at the restaurant, Lance is trying to step back from his emotions. How much money is he talking about?
"If they gave another $1,500," he says, "I wouldn't be very happy about it, but I'd be able to accept it."
Then he realizes what he is saying. "We're talking about a $300,000 deal and we're $1,500 apart. It's less than 1 percent."
Seiden tries to keep the atmosphere light, refilling glasses.
"We celebrate the good fortune that we are alive, and we're together and you have a choice: to be homeless or not."
"Judi," says Lance, "I got to tell you something that's going to freak you out."
Seiden clutches her head. "You're becoming renters!"
Lance smiles. He's joking! "Don't worry," he says, "I have more stamina than that."
Shelley says to Lance, "So how shall we respond? I'm looking to you."
"And I'm not responding," Lance says. "I'm working through my emotions to this response. I'm disgusted by it, frankly."
Seiden reminds them: "The option we haven't talked about is to just say no. The mantra is 'This, or someplace better.' "
The next morning, Lance takes Tali, the puppy, for a rather somber walk, and they pass by the blue house. He is reexamining his emotions of the night before. He realizes what he's really reacting to is the nature of the whole house-buying process, rather than to this particular deal, these individual sellers. He's frustrated at having so little leverage.
But the blue house is sweet. He's beginning to feel confident that $301,500 is a pretty good deal. He's beginning to think the sellers were sincere when they said if they had made all the fixes Lance and Shelley wanted to make, then they would have charged a higher price.
Is this an objective reaction--or is this just a rationalization? What is the blue house really worth?
But that's not the question, is it. The question is, can you be happy paying what you're paying?
He and Shelley have until 5 p.m. to respond.
They decide to try one more tactic: If they could just explain their heartfelt concerns in more detail, maybe the sellers would consider a higher credit. The risk is that if they make a written counteroffer, the sellers have the right to kill the deal and sell to the couple waiting in the wings. So this message must be verbal, informal.
It is a crazy day. Flurries of phone calls. At one point the cell phone rings just as Lance is speaking to one of his superiors. He walks away in mid-conversation to take the call from Seiden, and explains later.
During a free minute Shelley realizes she's almost out of checks and decides to think positively. She orders new checks with a new address: 414 Fourth St. NW. The blue house.
By 4:30 there has been no response from the sellers' camp. "We're running out of time," Seiden says. "We're risking everything."
With minutes to spare, they sign the deal as it stands. In handwriting, they give the sellers the "option" of granting another $1,500 credit rather than performing the minimal repairs. Chances of the sellers choosing the option seem remote--the repairs don't even add up to $1,500. But somehow, to go down negotiating to the bitter end feels better.
"I guess we bought a house," Lance says a few minutes later. "It's weird. It's supposed to be a big celebration. You just kind of wipe your brow. . . . I guess we should be very happy."
Shelley strikes the celebratory note: "We are homeowners!"
Lance and Shelley go visit the blue house to take measurements. With the deal behind them, everyone is in a good mood. Hamilton offers Shelley coffee in a mug that says "Peace Begins at Home."
He also has typed up a list titled "Things to Know about 414 4th Street," to which he adds: Let the lady down the block know what car you drive because otherwise if you park in front of her house, she'll put bread crumbs on it so the pigeons will use the roof for a toilet.
"It's certainly very hard to leave," Marianna says, her move to the suburbs now only days away.
At the closing, amid the whirl of paper-signing, Hamilton takes the keys off his key ring and explains each one to Lance, who tags them with Post-it Notes. Shelley hands a "Thank You" card to Hamilton.
And who would have believed it: In the rush to pack, Hamilton and Marianna didn't get to all the repairs required by the contract. So they kick in the extra $1,500 after all.
Earlier this month, Lance, Shelley, Tali and the cockatiels, Apollo and Tycho, moved in. They have big plans. Central air. A new kitchen. And, they're going to paint the blue house white.
Seiden jokes that they shouldn't get too comfortable, because she's going to sell it for them in three years.
If you're interested, they figure that with the improvements, it'll be worth about $350,000.