The Chosen - The Sweet and Sour Deal

I took over checks to the realtor for the Option Money and Earnest Money today at lunchtime. Throughout the day, I received emails with copies of our offer, sellers disclosure of house condition etc...


The realtor called me shortly after lunch to tell us that there were offers higher than ours and wanted to know if we wanted to raise our offer. I gave her a big NO! She said she was glad that I stayed firm on our offer as she knows increasing will only make appraising even more difficult.


Then, the lender called me to tell me that there is pending disputes on my credit history against a zero balance that I opened a few months ago (see previous blog entry.) She basically needed me to sign a form allowing her to go in and have the dispute removed. I complied.


I got a call from the realtor later in the evening. She told us that the seller has chosen us. The higher offers would not appraise. We came in just under the threshold.


All is not so sweet and we have much to sort out before we can come to agreement.


The seller wants us to pay all closing costs in 3 weeks, which is a bunch of crap in my opinion. We will do it if it means making the deal happen but I'm not happy about it. The reason it pisses me off is that the seller still wants to stay in the house through March 5, well over a month after we have paid closing costs. It forces us into a situation where we may get stuck paying rent on our apartment and a mortgage payment.


So, tomorrow we have to put the ball back in their court and put the pressure back on the seller. If we can't agree, we'll pull the plug without another thought.

House Hunting - Day 2

I left work an hour early today so that we could go look at two houses before it got dark. We never made it to the last house because we liked the first one so much. Here is a video and some photos.

We decided to drive back to the realtor office to make an offer. It turns out that there were a couple of offers on it already more than the asking price.

This house has almost everything upgraded already which makes it attractive visually and monetarily. What it will appraise for is a separate issue.

We decided on our top dollar offer based on what we've been researching with the area, the upgrades, and everything else. We have offered $4k over the list price, buyer pays closing costs and allowing the seller plenty of time to pack it up after closing.

I made some video walking through the house to look at again later. When we got home neither of us wanted to watch it for fear of getting emotionally attached.

Now we have to get a $100 check over to the owner for our option payment (get out of the deal money). We also have to get $1500 earnest to the title company for the deposit.

The realtor has vouched for us so that we can get the deal on the table as serious shoppers.

Realtor Interview #2

It's been about a month since we first started our journey toward buying a house. I had met with the realtor initially on September 17. That was the seller half of the realtor.


My family met his wife, the buyer half, today. There was quite a bit covered in that meeting this afternoon. I will post my meeting notes in the next entry.


UPDATE
I had meant to add my notes from this interview previously. See below.


Lender will give itemization of fees in the closing costs.

Process:

1. Up front cost (earnest money $1000 up to 1% of house sale). Option fee $100 paid to the seller for unconditional right to cancel contract 7-14 days, pay for home inspection during the 7-14 days


2. Promptly after entering into a contract to buy a property and before any option period expires, contact your insurance agent to determine the availability and affordability of insurance for the property


3. Once you have a contract on the property, realtor takes contract to lender


4. Home needs to be inspected before appraisal - Home inspection #1 and termite report #2 $350-400 (this is not the home value appraisal)


5. Lender processes contract and orders appraisal which takes a few weeks - Appraisal runs about $450 usually paid to the lender up front after finding a house (but may only be due at closing)

Execute Rapid Rescore Process

I received a faxed confirmation of a zero balance from a creditor that was giving me problems.

The confirmation letter was sent to the mortgage lender.

She said, she can get the blemish removed from my history and do a rapid rescore. Rapid Rescore is not commonly available to all lenders.

In about 5 days, we should be able to see an increased score. I would be interested to know how this lender's rate compares to other lenders if they were to evaluate me?

Time will tell.

I'm thinking it would be better to wave for another 6-9 months. I think the time would go by fast.

Milestones:
Halloween
Thanksgiving
Wife's birthday
My birthday (3 months Major Milestone)

Christmas
New Years
4 year wedding anniversary
Tax Season
Lunar New Year
Valentine's Day
1 year anniversary at new job (6 months Major Milestone)

Vietnam trip
4 year anniversary at our current apartment
Easter
Our son's birthday (9 months Major Milestone)

Request for Evidence of Income

The mortgage lender requested the following documents today:

• W-2 forms for the previous 2 years
• Federal Tax Returns and Business Tax Returns (all pages) for the previous 2 years
• Pay stubs for the passed 30 days
• Passed 2 months bank statements
• Driver's License
• Social Security Card

I had everything together except my most recent W-2. I contacted HR and they sent me a form which I filled out requesting a reissue of the most recent W-2. I'll forward that to the lender as soon as I get it.

Another thing they are doing is verification of employment and salary which is kind of mixed together with the documents requested above. Fortunate for me, my company already has a good reputation with this lender and have a portal set up solely for this purpose.

There were some other things they requested if applicable. Not applicable in my case. But those items are listed below.

• Current mortgage statement and insurance declaration page
• Retirement statements (most current)
• Award letters for social security/retirement income
• Bankruptcy schedules/Discharge docs
• Divorce decree (all pages)
• VA: DD214/Disability Awards Letter

Realtor Interview

Today I had a 20-30 minute interview with a Re/Max agent. He was very professional, experienced, warm, friendly and eager to share his knowledge freely.

He was quick to answer my questions and interpret what I was asking and even explain to me what I was asking and why it was or was not a factor to be considered. I felt a little guilty grilling him with so many questions but it was important that I asked the hard questions.

I can tell you that without a doubt, I've already found the right person. I may interview a few more, but this guy was really good.

This agency is run by a husband/wife. He helps sell, she helps buy. We are expecting a call for a follow up interview with her since she was not in the office when I stopped by.

Finding a Realtor

I only know one realtor and I don't really know her at all. I decided to look at familiar names like, Century 21, Ebby Halliday, Re/Max, etc...

I have many questions. In order to find someone I feel comfortable with, I came up with a page of questions to ask during the agent interviews.

I got the questions as suggestions from various online sources. To be quite honest, I don't even understand what I'm asking on a few of them.

Anyway, here are the questions I have for the realtor agents.

1) How many years experience do you have?

2) How many homes in the area have you sold in the passed 60 days?

3) Can you give references from recent buyers? get 3 (are they related to the agent) May I call them with additional questions?

4) How do you earn your commission, through the seller or from the buyer?

5) When should I call the and how often?

6) What is your best marketing plan or strategy for my needs?
A. How will you search for my new home?
B. How many homes will I likely see before I find a home I want to buy?
C. Will I be competing against other buyers? (Agent should solely represent you and not represent other buyers who are competing for the same inventory.)
D. How do you handle multiple offers?
E. Do you present offers yourself?

7) What are the top 3 things that separate you from the competition?

8) May I review documents beforehand that I will be asked to sign? Ask to see a sample purchase agreement and ask agent to point out your cancellation rights in the document (if they hesitate, find another agent)

9) How will you help me find other professionals (i.e. mortgage brokers, home inspectors, title companies)?
A. Are there affiliations with these related professionals?
B. Is the agent's company receiving compensation for referrals? This is against the law. If they receive kickbacks, find another agent.

10) What kind of guarantee do you offer?
A. Has anyone ever canceled and agreement with you before?
B. If we are unhappy, can we be released from the agreement before the expiration? If not find another agent.

12) What haven't I asked you that I need to know?

Finally, have the agent reiterate your goals and objectives to you to verify that they listen and have a clear understanding of your desires.

We are sick of renting.

After a few weeks of getting everyone healthy again, the a/c stopped cooling. Wife and child had both been to the doctor a few times with ear infection, fever, coughing, etc. The weather went from hot to a nice cool over the weekend. At least it wasn't triple digit heat with no a/c.

Then, Sunday night the bathtub clogged up. This was followed by no hot water this morning.

The apartments, oh sorry, "condos" we live in suck. The management/owners are non existent and never answer or return calls. If something breaks, it seldom gets repaired.

We are currently in a 700 square foot 1 bed/1 bath shoebox. It's no wonder everyone stays sick, what with the black mold and suit coming from the a/c vents.

We have been on the fence now for a long time about moving out. There have been too many things to hinder us until now. I was going to try to find a job in Florida closer to my retired parents but no jobs there for me in the area my folks live. My brother thinks I could get a job in Washington state but I haven't been motivated about doing that. We wanted to save 20% for a house first. We have to make a trip to Vietnam next year to visit wife's family.

Last week I looked at an apartment but they only have carpet and no washer and dryer connections. I won't live on carpet again. So, we have just continued to live with the headaches of this apartment and saved money.

After all of the problems, we have come to the decision that it is time to move.

I spent the better part of the morning looking at apartments online but still got the feeling that we are just throwing money away. The rent would be almost double what we pay now. For that kind of money, we are spending the 20% down on a house every month in rent.

I decided after lunch with Fiona that we need to consider buying.

So, I spent the remainder of the day making notes on the process involved in buying a house.

This blog will serve as a recording of our experience through the home buying process.