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So, almost three months after we put in an offer on a house, we are still without a home.  Without any home, in fact.  We moved out of our rental in late July, because there had been a flood, and since we were scheduled to close on August 15th, it seemed to make sense to simply move out and let the landlord make repairs before re-letting it. We moved into my sister's basement for a few weeks.


Oops.

The property we are supposed to buy had tenants.  Though the tenants initially said they would move out by the first of August, that proved impossible.  We moved the closing to late August.  Then to September first, because the tenants still weren't out.  It wasn't that big a deal, so we didn't think much of it--it can be hard to find a place, and while we certainly wanted to move in, we weren't in such a heroic rush that we couldn't give the tenants a little extra time to find a place.  The tenants are recent college grads who'd been living in the place for four months, not long-term tenants who might have real trouble finding a new permanent abode.  We had no reason to expect this to turn into a problem.

We moved into my mother's spare bedroom, in order to give my sister and her roommate a break.  

We were assured that the tenants would absolutely, without question, be out by the fifteenth, so we scheduled our closing for this past Friday.

Oops.

On Thursday morning, our agent, who had driven by the house, informed us of something strange:  the tenant seemed to still be living there.  We panicked.  At 2:30, the worst was confirmed:  the tenant was still there. Furthermore, the tenant, who had seemed happy to find another place, suddenly wasn't happy at all.  In DC, tenants are entitled to 90 days notice before moving.  They had been given that notice on July 1st.  That entitled her to stay until the 30th, and on Wednesday night, she suddenly informed the agent that she intended to avail herself of that right.

I'm not going to take issue with the law itself--tenants should get some notice, and while maybe 90 days makes it too difficult to sell in this market, I'm not prepared to get into an argument about the platonically ideal length of tenant notification.  Nor am I going to complain when someone makes a basic exercise of their legal rights.

However, it's a big problem for us. Our mortgage commitment expires the 27th.  Had we known that she wanted the full 90 days ahead of time, we could have planned around it--finalizing our mortgage on a date that would give us leeway to close after she moved out.  Certainly, we wouldn't have given up our old place, which is costing us a fortune in extra moving and storage fees, and has imposed a heavy burden on our relatives.  Exercising her option at literally the very last minute has left us wondering whether we're going to be able to close at all.  

We're not willing to close on the house while a tenant is still in it; we're worried that serving her notice that we intend to take occupancy will restart the clock on the notification, leaving us with nowhere to live.  I don't really want to have to evict someone.  Moreover, even if I did, eviction in DC, while possible, is extraordinarily difficult, including provisions like these:

District of Columbia Law and Superior Court Rules prohibit the execution of evictions when a 50% or greater chance of precipitation is forecasted for the next 24 hours. Additionally, if the weather forecast calls for temperatures below 32 degrees Fahrenheit over the next 24 hours, evictions other than those designated as Commercial Property will be canceled.

Official weather determinations are made daily at 8:00am., and are based on the National Weather Service Forecast for the Ronald Reagan National Airport, formerly National Airport, the official weather location for the District of Columbia.

When evictions are canceled due to weather and the Writ expires due to no fault of the U.S. Marshals Service, the Landlord will be required to re-file for an Alias Writ and a new filing fee will be required. All Writs identified as Alias Writs and those that are about to expire, will be considered for priority scheduling.

As you can see, if this drags out even a little, we could conceivably be forced to wait until spring to take possession; there aren't a lot of guaranteed warm, sunny days in DC in January.  We're not eager to make a mortgage payment on a place we're not living in.

If we can't close, we'll be in a bit of a pickle.  While I haven't compiled scientific data to back me up, my experience in going through the listings is that the housing tax credit grossly distorted the market.  Almost anyone who wanted to buy, or sell, in the next twelve months, hastened to put their property on the market before April 30th.  The market still clears--the few houses that are priced where the market wants to buy get snapped up immediately.  But there are precious few of these.  Most of the market, at least in the neighborhoods where we can afford to live, is the stuff that's hard to sell-- beautiful fixer-uppers that require more capital than we have, and overpriced places that won't appraise for where they're listed.

The rental market seems similarly thin, so we really don't know what we're going to do if we don't buy now.  And moving in and out means added expense on top of the money we will have lost on the application process. 

Do I regret it?  Not really; you have to take some chances in life, and I did love that house.  Still love it, and hope to live in it.  We'll know in the next few days whether owner and tenant were able to come to some sort of agreement, or whether we have to start the process all over again.  Wish us luck.

I do wonder what effect things like this are having on the broader housing market--either here, or in the country as a whole.  A lot of people who needed to move and were underwater or close to it, ended up having to rent out their houses to help make the mortgage.  At least in DC, however, this makes it harder to sell.  Certainly, if we have to go back onto the market again, we'll be extremely leery of looking at any house with a tenant in it.  That has to make it harder for the markets to clear.
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Megan McArdle is a columnist at Bloomberg View and a former senior editor at The Atlantic. Her new book is The Up Side of Down.

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