Lessons on Buying a House: The Big Day–It’s Mine!

The funny thing is last night I slept better than I have in a long time.  I’m not sure why exactly; I guess I expected that it would all work out OK.  Yesterday, I had the final walk-through with my agent, and I thought that I would have the closing papers in my hand, or at least in an email attachment, and also the actual amount that I would have to take to closing.  That was what I had been told by the title company.

However, the flurries of activity by my agent, their agent, the lender, the people from HUD approving all my paperwork, and the title company all seemed to continue–or maybe not.  I don’t really know.  I felt like I was in the dark.  I waited patiently–I’ve been a patient waiter in all of this, having done what I could do myself, letting all those other people, do their jobs.  Then about two hours before the supposed closing time, with still no word from any of them, I made one call to my agent, and within about 20 minutes I had a call from the lender with the amount of the check I had to take for my closing costs.  But just to show how loose ends everything was at that point, during our phone call the amount changed.

I hurried from work, went and got my cashier’s check, and headed to the title company.  The seller’s agent was there, as was my agent.  The sellers weren’t, because they now live overseas, which just led to more complications because another agent was there who had Power of Attorney for the sellers, or shall we say, got Power of Attorney via long distance to the title company officer.

There were several other loose ends to be tied up, a lot of signing to be done mostly by me, but also by the sellers’ agent and the agent with Power of Attorney.

Then the signed papers had to be faxed or emailed (I didn’t see that) back to my lender’s office for approval, and, of course, some of the paperwork had to be redone.

It was almost a 3-hour session, but I totally enjoyed the experience, the culmination of all the driving to look at neighborhoods, all the worry about whether I would get the loan, all the weirdness of looking at houses filled with the stuff of people I didn’t know.

Though I’m back in my snug apartment tonight, with a cold rain blowing from the north outside, I’m happy with myself for having pushed myself to get my own house.  It’s going to be a big change, but I like the house a lot and I know that I’ve moved myself into another stage of my life, not something that I had to do, but something that I needed to do.

Lessons on Buying a House: The Final Countdown to Closing

“Scurrying” and “a tiff” might be how I’d describe some of the goings-on today related to the final steps before closing.

The corrections asked for by the VA-approved appraiser appeared to have been made. My agent had talked to the appraiser and then made arrangements for the contractor (small-time, not big-time) to get everything remedied. All of the items which had appeared in the appraiser’s report that needed attention had been taken care of. I went out myself and checked it all, and everything looked OK. Even the removal of the spacers between the patio and foundation had been pulled out. (This has to be one of the weirdest rules I’ve heard of. Even though this long board was between the concrete of the foundation and the concrete of the patio, because this piece of wood was touching the foundation, which is part of the house, it was considered “conducive for termites”. Now there is an inch-and-a-half gap between the house and the patio that I will have to fill, probably with a spacer board; somebody has recommended redwood.)

Anyway, it seemed as if the house should pass on all the corrections, but when the VA-approved appraiser went back yesterday, did it? Oh, no. There were still a couple of corrections that had to be made, ones he said were obvious in his photos on his report. Obvious to whom, I don’t know.

It almost looks as if there might have been some sabotage involved. Between the time the contractor made the first asked-for repairs, some holes had been made in the siding on the garage very near the repairs. I know that Saturday when I looked at the completed repairs I didn’t notice any holes. Could this have been done by the appraiser when he came back to re-inspect? At $75 a pop for each re-visit to the property for just a couple minutes of inspection, maybe that’s what happened. I’ve heard that in these days of a slower real estate market, appraisers and inspectors aren’t getting so much work.

Therefore, a good deal of scurrying took place. My real estate agent went out to confer with the contractor. The contractor did some corrective repairs. My agent informed the finance company that the repairs had been made. Apparently, the finance company got the appraiser back out for the re-re-inspection (yep, that’s my new word).  All of this happened with in the expanse of a few hours.

I guess everything passed the re-re-inspection because within minutes of my asking the finance officer if the closing was still on for Friday and her telling me “yes”, my agent called me and asked if I could do the closing on Thursday afternoon instead of Friday.

There was scurrying and “a tiff” between the finance officer and my agent, both maybe anxious to get everything finished. It’s a little bit funny because when you get to this point in the buying process, most everything has been set in motion, and, unless for some reason you just decide that you don’t want to buy the house, there is not really much that the buyer has to do. You might have to provide a bit more information here and there, like your very last pay statement or an address that you didn’t know when you were filling out forms. Otherwise, all these other people are “scurrying” to get all the I’s dotted and T’s crossed.

The finance people, your agent, the seller’s agent, the title company people, the contractor–all of them are hurrying to get the whole purchase process completed.

In these last few days, I’ve felt a bit like I was watching a strange tennis match played among all these people, because now I know that in addition to the few phone calls and emails that I was party to, there were many others between these other “players” in this sale.

Why? Because when this whole deal is finished, they are all going to get a piece of the pie. And if for some reason, it all doesn’t go down, that pie is not going to get cut!

And what have I been doing? Actually, I’ve been doing a lot. Making arrangements to transfer utilities, finding someone to change the locks, checking out lawnmowers.

And to accomplish one of the first tasks that I want to complete in my new house–checking out paint strips.

Lessons on Buying a House: The Inspections and the Appraisal

It’s only one week until I close on the house.  Finally, I’m feeling that this is really going to happen and I’m getting anxious–the good kind of anxious.  The nervous kind of anxious I’ve been havin’  for so long that I can’t wait until I can sleep a whole night without waking up thinking about it all.

I’ve definitely told myself that I’m moving because today I made the arrangements to stop the utilities here and start them in the new place.

Today I also went out to the house to check on what the contractor has completed.  Because I don’t have a key yet, I could only check out the outside.

This brings me back to the inspections and appraisal.

I’m getting a VA-guaranteed loan, so I hope what I’ve experienced may help anyone in a similar situation, because no matter how much you read and how many questions you ask your agent, there seems like there are always surprises.  Here are some of the details about the inspections and appraisal that I had done ( none of which can really be done until you’ve made an offer and have a signed contract with the seller with a stated price):

The Home Inspection: This is done so you can know what problems there might be both inside and outside of the house.  Most likely, as a prospective buyer, you will have looked the house over pretty thoroughly and discovered some of the obvious problems, but a good home inspector should know a lot more and have specific equipment to get into places (such as ladders and moisture-identifying meters) that a normal buyer doesn’t have no matter if he has looked at the house several times.

On inspection day, it’s good to hang with the inspector, ask questions, and just learn about all that house contains, both good and bad, after all, you are paying the guy!  My inspector was cordial and informative, and I felt comfortable asking him anything.  His inspection took about three hours, and then he followed it up with a 38-page detailed report, which included lots of photos.  He charged $275, which I thought wasn’t bad.  The price is determined by the size and age of the house, and all of the extra features it might have to be inspected (such as a swimming pool or lawn sprinkler system).

If problems are found, this inspection allows the buyer to re-negotiate with the seller for a lower price or to ask the seller to repair things.  What I learned is to ask the seller to fix everything that needs fixed.  Although the sellers I’m dealing with initially said they wouldn’t pay for any repairs, when my agent sent them an amendment to the contract, they agreed to do everything we requested.  There were still a few things I hadn’t asked for, and now wish I had.

Although a copy of this inspection went to my finance company, surprising as it may seem, the VA doesn’t require that this inspection be done.

The Termite Inspection: Some home inspectors will also do a termite inspection, but mine didn’t but recommended another guy for this job.  I didn’t go to the house for the termite inspection, but my agent went to let the guy into the house.  It couldn’t have taken much time because the termite inspector called me to tell me he was finished about 5 minutes after their agreed-upon meeting time.  He didn’t find any evidence of termites, but he did find several problems, which he cited as being conducive to termites: some foliage too close to wood siding, a bit of rotting wood at the bottom of door frames on the garage, and wooden spacing boards that were put in when a new patio was laid.  The cost of this inspection was $80 and was required by the finance company and seemed to be required by the VA.  However, the information that I read about VA loans says that this is one of the items that “the veteran cannot pay for.”  We’ll see how that falls out at the closing, because, sure as the world, I did pay for it.

The Appraisal: After the home inspection is done and the buyer (veteran) decides that he really wants this house, that’s when all the real paperwork must be signed for the finance company.  (The buyer definitely has been approved for the loan prior to this and has already supplied the finance company a load of documents–at some point I’ll add a post about all the documents I presented to the finance company to get approved, but not now.)  Among all these papers is one document that gets the appraisal process started, and the buyer (veteran) has to pay for it; you can pay up front or even put it on a credit card.  It cost me $400; this may vary a bit state to state.

The finance company arranges for an appraiser from a VA-approved pool of appraisers.  I kept waiting for someone to contact me to say the appraiser was going out to the house to do the appraisal, but then, to my surprise and elation, my finance officer emailed me that the appraisal had been done and, basically, without any unexpected problems, I would be getting the loan and the house!

The appraisal actually has two aspects to it.  One is to determine the value of the property.  This is done to see if the house values more than the amount of the loan the buyer (veteran) is asking for.  If it doesn’t, the buyer will have to try to get the seller to come down or be willing to put in more money up front to cover the difference.

The second part of the appraisal is really another inspection.  The VA says that the house must be livable and that this inspection is for safety purposes not cosmetic problems.

My appraisal came out mostly positive.  The house appraised for more than the amount I agreed to pay for it, and as far as the inspection part, the VA appraiser noted basically the same problems that the termite inspector had.  Therefore, these have to be remedied, and then both the termite inspector and the VA appraiser have to go back out to house to give their OK.

That’s why I went out to the house today because the contractor has been working to repair what I had asked the sellers to do and also the areas that the inspectors required.  Some things look complete, but it looks like he has a bit more to do.  I’m hoping that it gets done tomorrow, as the termite guy and the appraiser are set to go back out on Monday.

Lessons on Buying a House: Another Big Day–Signing the Papers for the Finance Company

It looks like this is moving along.

Today was a big day in many ways.  First, during a break at work, I walked the three blocks down to the county tax assessor’s office to renew my car registration.  It’s gotten hot and muggy again in Houston, more like August than October.  We’re supposed to get some relief with a cold front this weekend, and most everyone is anxious for that, but today, my short jaunt was a hot one.

Another deed I got taken care of was my flu shot, not the swine flu one yet, but just the normal one.  It’s something I’ve been doing for the past several years and I think it works.  The nurse who gave me the shot commented that the flu shot is one of the best medical inventions since penicillin.  I don’t know if I’d go that far, but, like I said I think it works.

My agent sent me several emails.  One was that the sellers’ agent had remedied a couple of the electrical problems we had on inspection.  Then he said I needed to arrange for a termite inspection, so I did.  It’s set for tomorrow, and my agent is going out open up the house for the inspector.  I’m still feeling pretty positive about my agent.  He’s been on top of most things for me, even though I’m pretty sure that normally he’s involved with higher-dollar properties than my little purchase.

Then I got a whole slew of documents from the finance company.  Among the many pages was the Good Faith Estimate.  I was really pleased because the money that I will need to take to closing is less than half what I had expected.  Of course, the earnest money that has gone to the title company will help count against the closing costs, and that is my money too.  I was even more surprised because I have to pay for a survey and also a year’s homeowner’s insurance, but the finance officer said that was already included.  The big thing is that as part of the offer contract I asked the sellers to contribute to my closing costs and that does reduce the amount I will have to bring to closing.

Having the sellers pay something toward the buyer’s closing costs, in my view, is a bit of a double-edged sword.  On one hand, it does help reduce the closing costs for the buyer, but, in reality, the seller may have kept the negotiated price of the house higher, and because the price is higher, what is really happening is that the buyer is just financing the amount of money that the seller is contributing toward the seller’s closing costs.  But it can help the seller too, becaue he doesn’t have to come up with as large of chunk of money to bring to the closing.

What I finally did today was go over to the finance company and sign all the papers, rather than sign them and either scan them or fax them back.  With that many documents to be signed, it was a lot easier and quicker, not too mention, the finance officer was able to explain some of the points that I was unclear about.

The next and most like the last big step will come with the appraisal.  It seems like the big question mark because with so many foreclosures, the county tax valuations have fallen quite a bit from 2008 to 2009.  Also because my appraiser has to be VA approved, I don’t know how that will play out.  Some people have said these appraisers are more strict than others.  Because I only did all the paperwork for the finance company today, I’m not expecting that the appraisal will be done until next week–just another thing to wait for.

Yeah, that photo at the top is a teaser–it’s of the front of the house.  Keep your fingers crossed.  I am.

Lessons on Buying a House: The Latest Update, and Even Better–A Mortgage Calculator!

This is going to be short; it’s past bedtime, but here’s where everything stands.  Last Thursday, the offer contract finally got the buyers’ signatures and my final signature on one point that I finally caved in on–the number of days on the termination option.  I wanted 14, but they only would go for 10.  As one of my friends said, “Don’t sweat the small stuff.”  It really wasn’t such a big deal, anyway so far.

Fortunately, I was able to get an inspector, who had been recommended by a colleague, to do that job on Saturday.  Also, fortunately, unlike the first agent I had, who had also been recommended by a friend, the inspector turned out to be great.  I went out and pretty much stayed by his side for most of the 3-hour inspection.  He was both informative and helpful, showing me not only problem areas, but also making suggestions for various types of maintenance to keep up the house.  He had no problem answering my questions, even, I suppose, as naive as some of them probably were.

There weren’t too many surprises because most of the problem areas I or my agent had spotted on two previous visits to the house.  A number of problems relate to electrical aspects, because the current owners seemed to have done a lot of jerry-rigging of various electrical lines and connections, especially in the garage and to some “ambient” lighting outside, but there inside electrical problems as well.  There were quite a variety of other issues, maybe the biggest one being the roof, which is getting toward the end of its life.  Even so, the inspector told me it wasn’t going to leak.  That means it’s something that I won’t have to do right away.

I was pretty beat (and feeling kind of beat up too) Saturday after the inspection; there was a lot of information to take in, and I seemed to be able to think about just the problems, even though there are so many things about this house that I really like, especially, the upstairs bedrooms and the 2 and 1/2 baths.  Yeah, one guy with 2 and 1/2 baths!  What a deal!

Today my agent called and wanted to talk about the inspection.  I thought, “Oh, no, there’s some problem.”  However, when I got to his office, he told me that the sellers’ agent had been pretty amenable to some of the things that we had previously wanted, so we made a list of repairs that I want to be done, and we made an addendum to the original paperwork.  Hopefully, the owners will agree to repair or pay for the repair of some of these, and that will be just that much less I will have to worry about doing or paying someone to do.

My agent recommended also doing a termite inspection, but he is also going to ask the other agent about what has been done previously.  Then the “biggie”–the appraisal.  The finance company has to get a VA-approved appraiser to do it, and, of course, that’s something I have to pay for.  If the appraisal all works out OK–meaning the house is valued at more or at least the amount of money I am borrowing to buy the house–then basically, everything will be a go.  The last thing will be a survey, something else I have to pay for, but which is required by the title company.

Sometime soon, my finance company will give me a “good faith estimate” of what my total loan will be, what remaining closing costs I’ll have, and what my monthly payment will be.  I’ve already got a quote for the homeowner’s insurance and it’s less than I had expected, so that will make my monthly payment a bit lower than I had thought.

If you’re new to this as I am, here’s what’s included in monthly payment:  payment on the actual loan (principal and interest), taxes on the property, including any Homeowners Association fees; homeowner’s insurance, and PMI (which is a type of loan insurance that lenders require).  However, with a VA loan, there is no PMI, because that is actually what the VA is doing–insuring your loan to the lender.  On the other hand, there is a VA funding fee, which is paid to the government and now is at 2 percent.

Here’s is the mortgage calculator that I have been using.  It has really come in handy!

Sorry I haven’t been posting much on here, but there’s too much mental and emotional energy being expended in all this to have much left over for blogging.

OK, so maybe that wasn’t so short.