I must apologize for the immense delay in blog posts. I've gotten so caught up in the all things house related that I forgot to keep everyone updated of our experiences!! Let me go back a couple of months to after our inspection ...
I wanted to schedule our inspection for as soon as humanly possible after we got out of attorney review. It just makes sense - gives you plenty of time to review the report and see what you're going to ask them to fix and it also gives the sellers time to fix it! Our attorney told us that since we had such a short closing period that if the sellers agreed to fix something but isn't able to get a contractor out in time to do the work they'll open an escrow account for us. The seller will deposit the money it would be to fix the issues in the escrow account and then we can find a contractor and use that account to pay for his services. While that is a good fall back option it would just be way easier to have anything ready to go when you buy the house. You're already going to have the stress of moving, picking paint colors and decorating, buying furniture, etc. You won't want to deal with fixing the joists in the sun room or whatever issues your inspections turn up.
Another thing to keep in mind is while the sellers may think fixing the joists in the sun room or spraying for termites isn't a lot to ask for and has no problem fixing it, they'll still need to get someone out to the house and get an estimate before they give you an answer. A week after our inspection when we still hadn't heard (which took us to about 10 days before the closing date) I was starting to get antsy. We hadn't asked them to fix much and I couldn't understand why saying Yes or No was taking so long. It wasn't until after we closed when we saw the dates on the work documents they provided that it hit me. So just because it's taking a while to get back to you with an answer don't assume it's automatically a no.
I'll tell you now that the time between the inspection and your actual closing date will probably be one of the most stressful times in your lives, especially if you have a quick closing period. For us it was just one craziness after the next. First our attorney decided to go on vacation the week before we closed and not tell us. I only found out because I got an 'out of office' auto-reply to an email I sent that Monday. I wanted to cry and scream and throw up simultaneously. Her paralegal reassured us that she was on top of everything and we would be good to close on April 10th ... wait April 10th? Our closing date was set for April 9th? ... and here's craziness #2. Both attorneys had agreed to move the closing date to April 10th but had failed to tell anyone else. Not even the seller or their realtor knew (which did make me feel a little better). Yes in the grand scheme of things it's only one day, and yes it actually worked out better for us because my husband was off that day, but that's not the point!! Who changes a closing date and doesn't tell the main parties involved?!
Moving on to craziness #3 through 157 - all of which deals with the mortgage company leading up to our closing. We opted to go with Wells Fargo for our mortgage as they were recommended to us by our realtor. Since this is the first (and hopefully last) house I've ever bought I'm not sure how much of this is the "norm" and how much is because of Wells Fargo. The first and biggest issue I had during the entire closing process is - I've never done this before and you do this for a living, so maybe keep that in mind when I ask questions and don't treat me like a moron or an inconvience. Had someone explained to us what the general (as I'm sure every house buying situation is unique) step by step process would be I wouldn't have had to ask so many questions!! So for your benefit I'm going to run through how it was for us so you have a better understand of what will be asked of you after your inspection is done and you've decided to move forward.
Step 1 - After you've decided to move forward with the house you sign a bunch of documents that gives your mortgage company permission to look into any and all personal and financial files they can get their hands on.
Step 2 - Setting up the bank appraisal - basically the only thing you need to do during this step is give your mortgage company a CC# for the $390 fee for the bank to do the appraisal. Your realtor will be there with the appraiser so you're not involved in that. You will need to decide if you want to waive your right to receive a copy of the appraisal 3 days before the closing date. You will see the report eventually, this is just to waive your right to see it no later then 3 days prior to closing. I know when you hear anything related to "waiving your right" it's scary but really think about what will work best for you in this situation. For us it made sense to waive our right. Since we only had a couple of weeks after the inspection they scheduled the appraisal for as quickly as possible but if we wanted to see the report 3 days prior to closing we were afraid it might delay our closing date. Now it's important to remember that the bank will not give you a mortgage on the house if the appraisal comes in lower then what you're buying it for. So if there was an issue with the appraisal the bank will be the first ones to come to you and say there's a problem. They aren't going to lend you money on a property that's not worth it! And by law you will receive a copy of the appraisal at the time of closing. It all depends on what you're more comfortable with. In the end we received a copy of the appraisal way before the closing anyway.
NOTE: Now before we get to step 3 it's important to remember that up to this point you are not actually approved for a mortgage. You gotten a pre-approval that simple says with a quick background check and factoring in the money you make and the down payment you have you could in theory buy this house. It's not a firm approval.
Step 3 - A few days after you've given your mortgage company permission to delve into your backgrounds you're loan processor will get in touch with you. The loan processor will be your main contact from this point out. They'll tell you what you need to get them to help move the process along. I cannot say enough great things from our processor, Kim. She was such a delight to work with. A real breath of fresh air during this entire process. My advice to you is to get friendly with your processor from the beginning, it'll make your life much easier in the long run!! Ok so Kim got in touch with us about 10 days prior to our closing date. She said our loan was in review and she would let us know once a decision comes in if they need anything else from us. This is why I added the note before this step. When Kim said that to me my heart sank. I didn't understand what she meant - we had gotten pre-approved - what did she mean waiting on a decision? She explained it to me but had I known from the beginning this was the process I would have been a lot calmer!
Step 4 - After a few days your processor will get in touch with you again with your decision. Most likely you'll be approved with conditions, as we were. The "conditions" are usually just paper work and some explanations. For us it was:
1. Canceled rent checks from the past year
2. Home owners insurance declaration
3. Explanations of past addresses that showed up on our files.
Whatever it is that they ask for try to take some time and celebrate the fact that you were approved! Woohoo!!! = D
Step 5 - Home Owners insurance! As you can see from the above step this is something that the mortgage company will make sure you have before you close. Its extremely easy and painless to get. We started with Gieco since we had car insurance with them. Then we tried a few of the other big named companies - All State, State Farm, etc. Your best bet is to always combine your car insurance with your home owners as that'll give you the biggest discount. We ended up switching to State Farm for car insurance and getting home owners from them as their price was the best for the coverage we wanted. A good thing to note about Home Owners insurance is you'll need to pay the first year up front prior to closing. Going forward the mortgage company will take money out of your monthly mortgage payments and put it in an escrow account for you and at the end of your first year will use that money to pay for next years Home Owners insurance but for this first year you need to shell out that money now.
Step 6 - After you've given all your docs to your mortgage company expect them to come back a few more times and ask for other stuff. Our issue ended up being solely with my employer. They had filled out the form incorrectly and it needed to be redone. Then it needed to be redone again as white out was used the first time it was corrected. Then it needed to be redone again because when it was redone the second time a section was missed! Wells Fargo was calling my employer up to the day we closed asking for information! If you expect there to be some little issues here and there that pop up towards the end you'll be a lot better prepared to handle them. Pray for smooth sailing but expect a hail storm.
Step 7 - Money needed for closing. The money needed for closing was another major source of frustration. The money you have to bring with you to cover the balance of your closing costs and the rest of your down payment needs to be in the form of a bank check. So one would think they'd want to give you this information enough in advance so that you have time to get to the bank and get the check. Yeah, apparently not. They could careless about making things easier for you. The day before we were scheduled to close I'm begging the paralegal to give me the total. Finally she says to me just bring a check for X amount - that should be more then enough and then we'll give you a check back for whatever the balance is. I thought that was absolutely ridiculous but what choice did we have?! My advice to you would be to prepare yourself for that. Calculate what you think the closing costs will be in your mind, add 1000 to it to be on the safe side and round up to the nearest 1000. This way you'll have that cushion in case they pull something like this with you!
This takes us right up to the day of closing. This is a loooooot of information to take in so go back through and familiarize yourself with it a little more. Knowledge is power and the more you understand about the house buying process the easier your life will be!!
Wednesday, June 6, 2012
Tuesday, March 27, 2012
Inspector gadget to the rescue
So now that we are out of attorney review the next big step is the inspection!! I was pretty nervous about our inspection. As I've mentioned in an earlier blog there had been an offer on the house and those buyers backed out after they conducted their inspection. Our realtor said that she got the impression from the seller's realtor that these previous buyers had just started looking - put in an offer - and decided they weren't actually ready to move forward with the house and backed out on the first legal part they could. I really tried to hold on to that thought but I was still really worried that something major was wrong with the house and we would need to walk away, leaving behind this house we were falling in love with ... and the $495 for the inspection and $350 for legal costs!
We scheduled our inspection for this past Tuesday morning at 9:30am. If you are buying a house with someone I highly suggest you both be at the inspection. I know it's a pain to take off work but in the long run it will be sooo much better. This way you both hear everything that the inspector says first hand and can ask any questions that pop into your head. I know in other aspects of our house buying experience I'll get some info from our realtor or attorney, go back and share it with my husband, and he comes up with 5 questions - 3 I had asked myself and 2 I didn't think to ask. Also you are both able to talk with your realtor after and get her opinions on some of the items that popped up on the inspection and what things she thinks you should ask the seller to handle. I would also suggest that you schedule your inspection as soon as humanly possibly once you get out of attorney review. In almost all housing contracts you'll be given 14 days to do an inspection after you get out of attorney review. You'd think 2 weeks was a long time but you'd be surprised how quickly that flies by!
A great suggestion that I got from one of my friends before our inspection (Thanks Sam!!) was to bring a camera with you and take pictures and maybe a video or two of the inside of the house. I know a lot of you out there have already been thinking about how you want to decorate your new house (cause that's exactly what I've been doing) so documenting each room will help you to visualize the space better. For us, the listing for our house only had about 9 or 10 pictures posted - it only showed part of the basement, 3 out of 4 of the bedrooms, and left off the sun room and the 1/2 bath. When we did our inspection I took about 50 more pictures of the house, making sure to get multiple angels of each room. This will help us think about which bedroom we want to be our room, how we want to set-up the living room, and what color to paint the kitchen! Bonus: Now you can show all your friends and relatives your awesome new house on the go! = )
Another good inspection suggestion I have for you guys is - don't try to write down everything your inspector says. If you're like me you are a note taking freak! I carry my house-buying notebook with me everywhere and documented as much as I could about each house we saw. I was figuring on doing the same during our inspection, HOWEVER, as it turns out, it's much more beneficial to pay attention and soak in what your inspector is saying at that moment. I did write down a few "how to maintain" tips our guy gave us but for the most part I followed along with my eyes and ears open and pen down. Trust me if anything major comes up in your inspection you won't need to write it down to remember it. Now, I can only attest to what our inspector did but, we received our report 24 hours after the inspection was over with everything he said the day before along with all the helpful pictures he took. Knowing we were getting this within 24 hrs of the inspection definitely helped squash my no note taking phobia. Everything was still fresh in my mind from the day before and now I had a detailed list of things that was waaaaay more organized and to the point than anything I could have written down.
During your inspection do not hesitate to stop your Mr. Gadget and ask questions. Remember he does this for a living - this is routine to him - he'll try his best to go slow for your benefit and point things out to you as he goes along but for the most part he knows what he's looking for and will be taking his own notes and pictures for his report. If he skips past something you would have liked him to check, chances are he did check it out and it was nothing worth mentioning. I'm sure he'll be happy to go over it with you and this way you won't be wondering what that crack in the ceiling really meant. I have to say I loved our inspector. He was thorough and super polite and understanding. He pointed out to us all of the things he would be marking on his report. This way when we got the report the next day we weren't surprised with anything he had listed. He also didn't make us feel like an idiot when we asked questions. He took the time to go over anything we wanted to know and made us feel really comfortable about the items that did come up on the inspection.
When the inspection was over we got the chance to talk with our realtor for a few minutes about the repairs she thought we should ask for just based on the more important issues that arose. We were actually pretty lucky and our list contained more nit-picky items rather then major issues. For example the conductor pole that received the electrical wires from the street was not bolted into the siding - when the previous owners replaced the siding X# of years ago the contractor didn't reattach the brackets for the pole. Our inspector has to note that because it is something we should be aware of and have fixed but will take two seconds worth of work to handle. All in all our report sited 52 items. Had I not been at the inspection and just received the report I think I would have starting crying. Luckily I knew a lot of what was listed was general items to address at some point, like the pole. Out of the 52 items he sited we only found 3 things pressing enough to go back to the sellers to ask them to fix. These were: evidence of termites in the garage, a leaky (although super tiny at this point) water main pipe coming into the house, and the joists under the sun room needed to be braced better.
Our inspector also tested for radon and I'm hoping to get the results of that test back today. For those of you that aren't familiar with what radon is (like me) I'll fill you in. The condensed version is radon is a gas that comes from the ground and can seep into your house through cracks in the foundation. It does contain radioactive isotopes (not the fun superhero building kind) so it is important to test for, especially if your buying a house with a basement. The test is pretty cool - the inspector has a round piece of charcoal in a container and leaves the container in the basement for 48 hours. He picks it up after the 48 hr mark and sends it to the lab. The lab does its thing and if the results are 4 or higher you, or the seller, need to remedy the situation. The remedy isn't that complicated but you would need to hire a contractor to come in and vent property so any gases that do come in to the house are being pushed back out. There are 3 different tiers you could fall into when it comes to radon. Tier 1 is 25% or more of the homes in your general area has had a radon test report a 4 or higher result, Tier 2 is 5%-24% of homes test positive, and Tier 3 is less then 5% tested positive. My husband and I are buying a house in Middlesex County, NJ. Middlesex is listed as a Tier 2 with 15% of the houses tests showing results of a 4 or higher. If you felt ambitious and had nothing else to do you can go online and Google radon test results in your area. That's how I found out what the Middlesex county number was.
Since we haven't gotten the results of the radon test yet our list of repairs were sent to the sellers attorney with a note basically saying stay tuned for the radon test results. This way we could at least get the process started on the repairs we know need to be made. Our attorney just sent the list to the sellers attorney today so I don't know how the sellers will respond yet. Our realtor thinks given the sellers situation (it's an estate sale) and the fact that they had someone back out after the inspection already that we have a pretty good shot at them agreeing to do the repairs we've asked for. After you complete your inspection I definitely recommend sitting down with your inspector and realtor for a few minutes and get their opinion on what they think you should ask to be fixed. Use their expertise to your advantage. Your realtor should have a good idea of the seller based on his/her calls to their realtor and should be able to make a pretty good guess at what they'll agree to fix. In the end its up to you what you ask for but it's best to get as much info as possible to provide you with the best and least stressful outcome!
*******************UPDATE*******************
We got our radon test results and ... drum roll please ... it came back as a .4!! Less then 1! Wooohoo!! We're so relieved! I'm really hoping that not having to ask the home owners to take care of a radon issue will make it easier for them to say Yes to our repair list. Keep those fingers crossed everyone! ; )
We scheduled our inspection for this past Tuesday morning at 9:30am. If you are buying a house with someone I highly suggest you both be at the inspection. I know it's a pain to take off work but in the long run it will be sooo much better. This way you both hear everything that the inspector says first hand and can ask any questions that pop into your head. I know in other aspects of our house buying experience I'll get some info from our realtor or attorney, go back and share it with my husband, and he comes up with 5 questions - 3 I had asked myself and 2 I didn't think to ask. Also you are both able to talk with your realtor after and get her opinions on some of the items that popped up on the inspection and what things she thinks you should ask the seller to handle. I would also suggest that you schedule your inspection as soon as humanly possibly once you get out of attorney review. In almost all housing contracts you'll be given 14 days to do an inspection after you get out of attorney review. You'd think 2 weeks was a long time but you'd be surprised how quickly that flies by!
A great suggestion that I got from one of my friends before our inspection (Thanks Sam!!) was to bring a camera with you and take pictures and maybe a video or two of the inside of the house. I know a lot of you out there have already been thinking about how you want to decorate your new house (cause that's exactly what I've been doing) so documenting each room will help you to visualize the space better. For us, the listing for our house only had about 9 or 10 pictures posted - it only showed part of the basement, 3 out of 4 of the bedrooms, and left off the sun room and the 1/2 bath. When we did our inspection I took about 50 more pictures of the house, making sure to get multiple angels of each room. This will help us think about which bedroom we want to be our room, how we want to set-up the living room, and what color to paint the kitchen! Bonus: Now you can show all your friends and relatives your awesome new house on the go! = )
Another good inspection suggestion I have for you guys is - don't try to write down everything your inspector says. If you're like me you are a note taking freak! I carry my house-buying notebook with me everywhere and documented as much as I could about each house we saw. I was figuring on doing the same during our inspection, HOWEVER, as it turns out, it's much more beneficial to pay attention and soak in what your inspector is saying at that moment. I did write down a few "how to maintain" tips our guy gave us but for the most part I followed along with my eyes and ears open and pen down. Trust me if anything major comes up in your inspection you won't need to write it down to remember it. Now, I can only attest to what our inspector did but, we received our report 24 hours after the inspection was over with everything he said the day before along with all the helpful pictures he took. Knowing we were getting this within 24 hrs of the inspection definitely helped squash my no note taking phobia. Everything was still fresh in my mind from the day before and now I had a detailed list of things that was waaaaay more organized and to the point than anything I could have written down.
During your inspection do not hesitate to stop your Mr. Gadget and ask questions. Remember he does this for a living - this is routine to him - he'll try his best to go slow for your benefit and point things out to you as he goes along but for the most part he knows what he's looking for and will be taking his own notes and pictures for his report. If he skips past something you would have liked him to check, chances are he did check it out and it was nothing worth mentioning. I'm sure he'll be happy to go over it with you and this way you won't be wondering what that crack in the ceiling really meant. I have to say I loved our inspector. He was thorough and super polite and understanding. He pointed out to us all of the things he would be marking on his report. This way when we got the report the next day we weren't surprised with anything he had listed. He also didn't make us feel like an idiot when we asked questions. He took the time to go over anything we wanted to know and made us feel really comfortable about the items that did come up on the inspection.
When the inspection was over we got the chance to talk with our realtor for a few minutes about the repairs she thought we should ask for just based on the more important issues that arose. We were actually pretty lucky and our list contained more nit-picky items rather then major issues. For example the conductor pole that received the electrical wires from the street was not bolted into the siding - when the previous owners replaced the siding X# of years ago the contractor didn't reattach the brackets for the pole. Our inspector has to note that because it is something we should be aware of and have fixed but will take two seconds worth of work to handle. All in all our report sited 52 items. Had I not been at the inspection and just received the report I think I would have starting crying. Luckily I knew a lot of what was listed was general items to address at some point, like the pole. Out of the 52 items he sited we only found 3 things pressing enough to go back to the sellers to ask them to fix. These were: evidence of termites in the garage, a leaky (although super tiny at this point) water main pipe coming into the house, and the joists under the sun room needed to be braced better.
Our inspector also tested for radon and I'm hoping to get the results of that test back today. For those of you that aren't familiar with what radon is (like me) I'll fill you in. The condensed version is radon is a gas that comes from the ground and can seep into your house through cracks in the foundation. It does contain radioactive isotopes (not the fun superhero building kind) so it is important to test for, especially if your buying a house with a basement. The test is pretty cool - the inspector has a round piece of charcoal in a container and leaves the container in the basement for 48 hours. He picks it up after the 48 hr mark and sends it to the lab. The lab does its thing and if the results are 4 or higher you, or the seller, need to remedy the situation. The remedy isn't that complicated but you would need to hire a contractor to come in and vent property so any gases that do come in to the house are being pushed back out. There are 3 different tiers you could fall into when it comes to radon. Tier 1 is 25% or more of the homes in your general area has had a radon test report a 4 or higher result, Tier 2 is 5%-24% of homes test positive, and Tier 3 is less then 5% tested positive. My husband and I are buying a house in Middlesex County, NJ. Middlesex is listed as a Tier 2 with 15% of the houses tests showing results of a 4 or higher. If you felt ambitious and had nothing else to do you can go online and Google radon test results in your area. That's how I found out what the Middlesex county number was.
Since we haven't gotten the results of the radon test yet our list of repairs were sent to the sellers attorney with a note basically saying stay tuned for the radon test results. This way we could at least get the process started on the repairs we know need to be made. Our attorney just sent the list to the sellers attorney today so I don't know how the sellers will respond yet. Our realtor thinks given the sellers situation (it's an estate sale) and the fact that they had someone back out after the inspection already that we have a pretty good shot at them agreeing to do the repairs we've asked for. After you complete your inspection I definitely recommend sitting down with your inspector and realtor for a few minutes and get their opinion on what they think you should ask to be fixed. Use their expertise to your advantage. Your realtor should have a good idea of the seller based on his/her calls to their realtor and should be able to make a pretty good guess at what they'll agree to fix. In the end its up to you what you ask for but it's best to get as much info as possible to provide you with the best and least stressful outcome!
*******************UPDATE*******************
We got our radon test results and ... drum roll please ... it came back as a .4!! Less then 1! Wooohoo!! We're so relieved! I'm really hoping that not having to ask the home owners to take care of a radon issue will make it easier for them to say Yes to our repair list. Keep those fingers crossed everyone! ; )
Thursday, March 15, 2012
First comes love, then comes attorney review
So as you know we've found a house we love, we submitted our offer, and the seller accepted!! Well now what? Now you go into attorney review. But what's the first and most important thing you'll need before that - an attorney!! Hopefully you're realtor will be able to suggest a few names for you, which is what ours did. I'm a big fan of getting referrals from people so if your realtor doesn't give you any names (possibility although very unlikely) ask around - find out who your friends and neighbors used and if they liked them.
The things we were looking for in an attorney were:
#1 Do they have time for us right now?
#2 Do they have good communications skills?
*Normally I'd list price somewhere on there but I've found that all attorneys charge about the same in fees (plus or minus $200) and it's more important that you go with quality over cost at this stage of things.
My husband and I have a very fast closing time (30 days from when we submitted the offer) so we needed an attorney to be able to put our case first so we could get in and out of attorney review asap (we'll go over why this is so important a little later). I also wanted someone who would keep me in the loop as much as possible during this process. While this trait is harder to spot upon first impression you'll be able to get a good idea from your initial conversation with the attorney how well they communicate; did they answer your call on your first attempt, if not how long did it take to call you back, how much time did they spent on the phone with you, etc. Our realtor gave us the names of two attorneys she's worked with during past closings. I called both - I had to leave two messages for the first suggestion, while the second one was there when I called. We had a nice conversation about the house, her rates, her credentials, etc. By the end of our conversation I felt extremely comfortable with her and made the decision then to move forward with her and not wait for suggestion #1 to call me back (which he did later that day).
So far I've been very happy with our attorney - she's kept me in the loop as much as she can and since she's worked with our realtor multiple times in the past they have a great rapport with each other. I was extremely worried about this stage of things as my involvement in it is almost nonexistent. I've gone from having my hands in the pot to not even being allowed in the kitchen! Seeing as my OCD has kicked it up a notch since we've started house hunting I knew I wasn't going to do well. Which is why a communicative attorney is key! I've limited my interaction with her to one check-in email a day and she's been so great with getting right back to me and being honest about our time line. We submitted our draft letter to the sellers attorney yesterday and if all goes well we should be out of review sometime today. A draft letter basically states the points you want to be listed in the contract. For example: 10 days to do an inspection after attorney review, the option to back out if something crazy is found during inspection, the sellers are the ones who own the property and are not selling for someone else, etc.
Now on to the reasons why it's so important to get in and out of attorney review asap! The first and most important reason is that while in review if the seller receives a higher offer they can back out of your offer and go with the higher offer. Scary but true! However once you are out of review, the contract will be set and the seller will be locked into this deal and then you are the only ones who can walk away during that 10 day inspection window. The second reason you want to get in and get out is that nothing can move forward until you are out of review. You have to wait until you're out of review to schedule the inspection. If anything shows up in the inspection that you want the seller to fix or give you money towards fixing then another negotiation session begins, new docs need to be drawn up adding in the new stipulations, and everything will need to be resigned. We haven't gotten to that point yet so I can't even beginning to guess how long that will take but any delays might push back your initial closing date. You also won't be able to schedule the bank appraisal until after your out of review, and until after the inspection is done (no sense paying for the bank appraisal if your going to walk away after the inspection). A bank appraisal is very important as it will tell the bank how much the house is actually worth and lets them make the final decision on whether or not they are going to give you a loan to purchase the house. If the bank appraisal comes in to low you'll need time to fight the appraisal or find a new bank.
The best advice I can give you during this stage is to be comfortable with your attorney and stay busy. Work on getting all your docs to your mortgage company, start bringing boxes home for when you move, do your taxes ... anything to help keep your mind off the fact that you have no idea whats going on. I did all three of these suggestions and it's gotten me through 3 days of our attorney review. Feel free to share some suggestions of how you stayed busy during this time and how long your attorney review lasted!
The things we were looking for in an attorney were:
#1 Do they have time for us right now?
#2 Do they have good communications skills?
*Normally I'd list price somewhere on there but I've found that all attorneys charge about the same in fees (plus or minus $200) and it's more important that you go with quality over cost at this stage of things.
My husband and I have a very fast closing time (30 days from when we submitted the offer) so we needed an attorney to be able to put our case first so we could get in and out of attorney review asap (we'll go over why this is so important a little later). I also wanted someone who would keep me in the loop as much as possible during this process. While this trait is harder to spot upon first impression you'll be able to get a good idea from your initial conversation with the attorney how well they communicate; did they answer your call on your first attempt, if not how long did it take to call you back, how much time did they spent on the phone with you, etc. Our realtor gave us the names of two attorneys she's worked with during past closings. I called both - I had to leave two messages for the first suggestion, while the second one was there when I called. We had a nice conversation about the house, her rates, her credentials, etc. By the end of our conversation I felt extremely comfortable with her and made the decision then to move forward with her and not wait for suggestion #1 to call me back (which he did later that day).
So far I've been very happy with our attorney - she's kept me in the loop as much as she can and since she's worked with our realtor multiple times in the past they have a great rapport with each other. I was extremely worried about this stage of things as my involvement in it is almost nonexistent. I've gone from having my hands in the pot to not even being allowed in the kitchen! Seeing as my OCD has kicked it up a notch since we've started house hunting I knew I wasn't going to do well. Which is why a communicative attorney is key! I've limited my interaction with her to one check-in email a day and she's been so great with getting right back to me and being honest about our time line. We submitted our draft letter to the sellers attorney yesterday and if all goes well we should be out of review sometime today. A draft letter basically states the points you want to be listed in the contract. For example: 10 days to do an inspection after attorney review, the option to back out if something crazy is found during inspection, the sellers are the ones who own the property and are not selling for someone else, etc.
Now on to the reasons why it's so important to get in and out of attorney review asap! The first and most important reason is that while in review if the seller receives a higher offer they can back out of your offer and go with the higher offer. Scary but true! However once you are out of review, the contract will be set and the seller will be locked into this deal and then you are the only ones who can walk away during that 10 day inspection window. The second reason you want to get in and get out is that nothing can move forward until you are out of review. You have to wait until you're out of review to schedule the inspection. If anything shows up in the inspection that you want the seller to fix or give you money towards fixing then another negotiation session begins, new docs need to be drawn up adding in the new stipulations, and everything will need to be resigned. We haven't gotten to that point yet so I can't even beginning to guess how long that will take but any delays might push back your initial closing date. You also won't be able to schedule the bank appraisal until after your out of review, and until after the inspection is done (no sense paying for the bank appraisal if your going to walk away after the inspection). A bank appraisal is very important as it will tell the bank how much the house is actually worth and lets them make the final decision on whether or not they are going to give you a loan to purchase the house. If the bank appraisal comes in to low you'll need time to fight the appraisal or find a new bank.
The best advice I can give you during this stage is to be comfortable with your attorney and stay busy. Work on getting all your docs to your mortgage company, start bringing boxes home for when you move, do your taxes ... anything to help keep your mind off the fact that you have no idea whats going on. I did all three of these suggestions and it's gotten me through 3 days of our attorney review. Feel free to share some suggestions of how you stayed busy during this time and how long your attorney review lasted!
Tuesday, March 13, 2012
We finally found the one, that knocks us off our feet. We finally found the one, that makes us feel complete ...
I know you are all waiting with bated breathe for an update from when we saw the house last Thursday. Well we fell in love with it all over again! I was worried that maybe we had built it up in our minds so much as the "house that got away" but it was just as awesome as I remembered it. And now that we had the chance to see 25+ houses in between our 1st and 2nd visits we had a pretty good idea of what was out there and that just made me even more confident that this was the one!! So we put in an offer ...
Putting in an offer is super nerve wracking and requires a good sit down with your realtor first, then a private sit down between you and your house buying partner after. Don't feel like you have to make a decision right there in front of your realtor. This is a huge decision and you should take the time to talk with each other openly about it. After our 2nd visit we talked with our realtor about how aggressively the house was priced (the sellers had come down a lot since it was first listed and were finally at that "priced-to-sell" mark), what the comparables were (what houses in the area with similar features have sold for within the last 6 months), and her opinion on what we should offer. I'm not going to go into the exact numbers of our specific transaction but I will tell you the comparables showed that houses in the area sold for about $5000-$9000 less then what the sellers were asking for and our realtor wanted to go in around that mark. She knew we really loved the house (and I'm sure was tired of showing us house after house) and didn't want to run the risk of losing it again so she wanted to go in as aggressively as possible. However, seeing as I am my grandfather's granddaughter there was something in me that wanted to offer way less and take my chances with the wheel of negotiating (side note - you don't actually get to spin a wheel)! So my husband and I discussed it, we came up with a number that we were comfortable with and added on a 5000 credit back from the seller towards our closing costs (which I totally recommend you do). We met with our realtor the next day and drew up the paperwork. I could tell she wasn't thrilled with the number we had come up with but she was supportive and went over her strategy on selling them on this price. Here's a picture of my hubby and I before the signing process started! hehe! Can you tell we were a little nervous ...
The next 24 hours were excruciating. Every time my phone beeped I freaked out. Thankfully I only had to suffer for 24 hours because this past Saturday afternoon the text came in ... THEY ACCEPTED!!!! = D We were so thrilled. No negotiating at all ... they accepted as is and signed the offer! Our strategy had paid off, literally! If you take anything away from my blog I hope it's the lesson to follow your instincts and do what you are comfortable with. People will offer you advice on how much to pay and what to offer and 99% of the time it'll all be great advice but in the end it's your decision and you have to live with it!
Well our first two steps to home ownership are complete!! Now on to step three ...
Putting in an offer is super nerve wracking and requires a good sit down with your realtor first, then a private sit down between you and your house buying partner after. Don't feel like you have to make a decision right there in front of your realtor. This is a huge decision and you should take the time to talk with each other openly about it. After our 2nd visit we talked with our realtor about how aggressively the house was priced (the sellers had come down a lot since it was first listed and were finally at that "priced-to-sell" mark), what the comparables were (what houses in the area with similar features have sold for within the last 6 months), and her opinion on what we should offer. I'm not going to go into the exact numbers of our specific transaction but I will tell you the comparables showed that houses in the area sold for about $5000-$9000 less then what the sellers were asking for and our realtor wanted to go in around that mark. She knew we really loved the house (and I'm sure was tired of showing us house after house) and didn't want to run the risk of losing it again so she wanted to go in as aggressively as possible. However, seeing as I am my grandfather's granddaughter there was something in me that wanted to offer way less and take my chances with the wheel of negotiating (side note - you don't actually get to spin a wheel)! So my husband and I discussed it, we came up with a number that we were comfortable with and added on a 5000 credit back from the seller towards our closing costs (which I totally recommend you do). We met with our realtor the next day and drew up the paperwork. I could tell she wasn't thrilled with the number we had come up with but she was supportive and went over her strategy on selling them on this price. Here's a picture of my hubby and I before the signing process started! hehe! Can you tell we were a little nervous ...
The next 24 hours were excruciating. Every time my phone beeped I freaked out. Thankfully I only had to suffer for 24 hours because this past Saturday afternoon the text came in ... THEY ACCEPTED!!!! = D We were so thrilled. No negotiating at all ... they accepted as is and signed the offer! Our strategy had paid off, literally! If you take anything away from my blog I hope it's the lesson to follow your instincts and do what you are comfortable with. People will offer you advice on how much to pay and what to offer and 99% of the time it'll all be great advice but in the end it's your decision and you have to live with it!
Well our first two steps to home ownership are complete!! Now on to step three ...
Thursday, March 8, 2012
Never give up on a house until the fat lady sings (or signs that contract)
Well my house buying cohorts, my husband and I learned a very valuable lesson this week ...
Never give up on a house that you like until it's an absolute done deal!!
So you've been out house hunting and you come across this pretty cool house. It seems to have everything you want, but something holds you back ... maybe it's one of the first houses you've looked at and want to see what else is out there, or maybe it's just a little out of our price range. So you keep looking. A few weeks go by and that house is still on your mind. You contact your realtor about setting up a second visit when low and behold someone's already put an offer on it and it's in attorney review.
Well that's what happened to us a few months ago. My husband and I had been going to open houses and made some appointments with listing agents to see some houses we found online back in November. When we had finally gotten our finances in order and picked a realtor we liked, we went out for the first time with her on Feb 2nd (I know that because I've kept a pretty detailed notebook with the dates of when we go out). It was house #4 of 5 we would see that day. The house was pretty great. It had everything we were looking for, the price was within our range, and we loved the neighborhood ... but it was still only the 4th house we had seen with our realtor and we wanted to see what else was out there. We had been to some pretty crappy houses before this one in previous outings and didn't want the first pretty awesome house we saw to sway us into a decision we weren't ready to make. So we moved on ...
13 houses later we were ready to go back for a 2nd look! My husband and I discussed things the night before - we would go out one more weekend and if we still hadn't seen anything we liked better then that first house we would ask our realtor to set up a 2nd visit. The next day the house was in attorney review. Needless to say we were crushed. When the tears started to come I knew I liked that house more then I was letting on. But what could we do; someone has beaten us to it. So I wiped my eyes and blew my nose and got back to the grind. I would still check on that house from time to time to see when it moved out of attorney review, and just to tourture myself, to see how much they got that house for.
We went out with our realtor two more times and saw 15 more houses. This past Sunday was a pretty disappointing house hunting day for us. We only got to see 4 houses with our realtor and 2 open houses that we drove past on our way home. I went to sleep that night feeling defeated and all day Monday I was in the worst mood. I made an appointment to see a house Monday night that for all intensive purposes was pretty awesome; the area wasn't as nice as that first house and it was on the pricier side of things but everything else was good. I just couldn't shake off my bad mood.
Tuesday morning I was feeling a little better about things. One of the new listings I had found the night before looked promising and I was trying to stay positive. As I was scrolling through the listings I passed by that first house. I clicked in to check the progress and ... what the?! ... the status was back to active!! ... no attorney review in sight!?!? I almost had a head attack and quickly called the listing agent (trying to stay as calm as possible) and asked about the listing. She said she had just re-listed it 3 hours ago!!! My stomach was doing flips. I thanked her and told her we would be in touched. I emailed our realtor freaking out! When she wrote back 15 minutes later she had already called the listing agent and set up a 2nd visit for Thursday (today) at 1pm.
She said that the previous buyers went into and out of attorney review and did their inspection. After they completed their inspection they walked away. Now any normal person at this time would probably be thinking that's not a good sign, but our realtor said the house does need updating (which we knew - kitchen applicances, etc.) and maybe as they were going through this process they found another house that they liked better and walked away at the first legal point they could. The listing agent said the buyers didn't offer them a copy of the inspection report, give any reason for walking away, or ask them to make any repairs before canceling their offer ... all of which lead her to believe that perhaps the buyers jumped the gun on the offer and found another house in the mean time.
So before I leave to go see this house for the 2nd time I wish this posting leaves you with some hope! If you have a house that you love that goes into attorney review before you get a chance to throw your hat into the ring don't give up! Leave it on your saved houses list and check up on it every now and then. You never know what might happen!
Never give up on a house that you like until it's an absolute done deal!!
So you've been out house hunting and you come across this pretty cool house. It seems to have everything you want, but something holds you back ... maybe it's one of the first houses you've looked at and want to see what else is out there, or maybe it's just a little out of our price range. So you keep looking. A few weeks go by and that house is still on your mind. You contact your realtor about setting up a second visit when low and behold someone's already put an offer on it and it's in attorney review.
Well that's what happened to us a few months ago. My husband and I had been going to open houses and made some appointments with listing agents to see some houses we found online back in November. When we had finally gotten our finances in order and picked a realtor we liked, we went out for the first time with her on Feb 2nd (I know that because I've kept a pretty detailed notebook with the dates of when we go out). It was house #4 of 5 we would see that day. The house was pretty great. It had everything we were looking for, the price was within our range, and we loved the neighborhood ... but it was still only the 4th house we had seen with our realtor and we wanted to see what else was out there. We had been to some pretty crappy houses before this one in previous outings and didn't want the first pretty awesome house we saw to sway us into a decision we weren't ready to make. So we moved on ...
13 houses later we were ready to go back for a 2nd look! My husband and I discussed things the night before - we would go out one more weekend and if we still hadn't seen anything we liked better then that first house we would ask our realtor to set up a 2nd visit. The next day the house was in attorney review. Needless to say we were crushed. When the tears started to come I knew I liked that house more then I was letting on. But what could we do; someone has beaten us to it. So I wiped my eyes and blew my nose and got back to the grind. I would still check on that house from time to time to see when it moved out of attorney review, and just to tourture myself, to see how much they got that house for.
We went out with our realtor two more times and saw 15 more houses. This past Sunday was a pretty disappointing house hunting day for us. We only got to see 4 houses with our realtor and 2 open houses that we drove past on our way home. I went to sleep that night feeling defeated and all day Monday I was in the worst mood. I made an appointment to see a house Monday night that for all intensive purposes was pretty awesome; the area wasn't as nice as that first house and it was on the pricier side of things but everything else was good. I just couldn't shake off my bad mood.
Tuesday morning I was feeling a little better about things. One of the new listings I had found the night before looked promising and I was trying to stay positive. As I was scrolling through the listings I passed by that first house. I clicked in to check the progress and ... what the?! ... the status was back to active!! ... no attorney review in sight!?!? I almost had a head attack and quickly called the listing agent (trying to stay as calm as possible) and asked about the listing. She said she had just re-listed it 3 hours ago!!! My stomach was doing flips. I thanked her and told her we would be in touched. I emailed our realtor freaking out! When she wrote back 15 minutes later she had already called the listing agent and set up a 2nd visit for Thursday (today) at 1pm.
She said that the previous buyers went into and out of attorney review and did their inspection. After they completed their inspection they walked away. Now any normal person at this time would probably be thinking that's not a good sign, but our realtor said the house does need updating (which we knew - kitchen applicances, etc.) and maybe as they were going through this process they found another house that they liked better and walked away at the first legal point they could. The listing agent said the buyers didn't offer them a copy of the inspection report, give any reason for walking away, or ask them to make any repairs before canceling their offer ... all of which lead her to believe that perhaps the buyers jumped the gun on the offer and found another house in the mean time.
So before I leave to go see this house for the 2nd time I wish this posting leaves you with some hope! If you have a house that you love that goes into attorney review before you get a chance to throw your hat into the ring don't give up! Leave it on your saved houses list and check up on it every now and then. You never know what might happen!
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