Preliminary Documents, Contract and the Sales Rep from Hell

I spoke with the new lender early this morning. He said everything is looking awesome.

My wife and the realtor met me over at the builder's model home/office to go over the contract and all of that preliminary stuff you have to go through. I asked a couple of questions that really fired up the sales rep.

I don't know what her damn problem was. She was very short and it was escalating so I snapped her back into line with a simple statement, "Look, we're just asking some questions." We hadn't seen a model of our house yet, and wouldn't for a few more days. In fact all we had seen was the office we were in with her and a few brochures that she had emailed to me. With a sample question of would we be able to add things like an extra plug outlet, she snapped "NO!". She was very defensive, abrupt and just right out rude.

I figured out some of it later on. She was upset that we had brought the realtor with us, she was using a PC, and her printer was giving her fits. I didn't care what her reasons were but she didn't have to be so rude.

Anyway, she was super fussy and in a hurry for us to sign. I had to get assurances from her that I would have more than the time in her office to read everything in the contract. She was sort of resistant with comments like take it or leave it. The realtor was able to intervene and get an answer that the contract would not be submitted to corporate until next week.

I pulled my wife and realtor aside so we could talk in private about the sales rep's overall attitude and the bad impression that she was giving us. We were encouraged to look passed the attitude she was displaying.

The realtor had to leave early to honor an appointment and my wife needed to get our son home for lunch. I stayed to finish the paperwork and try to warm that old lady up. In the end she had lightened up quite a bit.

The sales rep gave me a sold sign to stick in the yard. Here's a photo of that.

Enough on that! We have to go to decide on all of our color options by February 1. I booked an appointment with the place that provides that service for January 27.

I spent the late evening going through every document to read all of the applicable fine print. Everything seems to be ok. I have a question about a couple of small things. I just have to wonder if my questions will bring out the fangs again. Time will tell. Time will tell.

This deal's getting worse all the time - We're out

We agreed to meet with the realtor this morning at her office to discuss details for the contract to put forward to the seller.

Before going over there, the lender called me to get a copy of our most recent bank statement. I got it all together and sent it over. Upon looking at everything she said it was looking lighter than we had told her. I explained the balance would be where we said at the end of this month when it comes time to pay the closing costs. She explained to me that it needs to be at the target balance a few weeks prior in order to get everything approved. I told her I could deposit some additional savings in cash. She said that would not benefit us in this case at this time.

Confused, I looked around online and found out that we were about to make a huge mistake adding cash to our account. It must be verified and bunch of legal stuff like that. I found this article. Check it out here.

I took this new information to the realtor. She said she would see if the seller could delay the closing cost a few extra weeks. The response came about a half hour later that the seller will not budge.

The seller is completely inflexible on all accounts. First, we offered over $4k more than the listed price. Second, they wanted to cut our option period in half. Third, they wanted to have all closing costs paid for in full 3 weeks. Fourth, they don't want to move out of the house for another 2 months from now. Last, they don't want to give us a solid date in which they would move out and don't agree to pay for lease back.

As Lando says, "This deal's getting worse all the time."

Maybe they have good reasons. But enough of this. We're out and moving on.


Additionally, we are looking for a new realtor. One who is more aggressive in helping us find something. But now after learning all of this, I kind of want to wait another month before getting into another one of these multi-offer scenarios.

UPDATE:

My supervisor recommended a realtor. I called her tonight and she has already sent a list of houses to browse.

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.

First Proper Lender Meeting with the Family

Today, my family had a proper meeting with the Senior Loan Originator. A lot was covered. (See notes below)



In short, we have a bit of homework to do, some time needs to pass and we'll meet again perhaps in a few weeks. I have to write a 'Letter of Explanation' why I was out of work for a few months back in 2012, provide some of my wife's ID to move the paperwork along.



Additionally, I have to take additional steps to get something removed from my credit history. It's a paid off account that needs to be deleted. The original owner will not delete it. I will document that process as well.


NOTES

Let the realtor locate a house

The lender does a conventional loan with a minimum of 5% down.

The lender will ask seller to pay 3% toward closing costs and negotiate that into the lender's price (we would have to pick up the remaining balance)

Get into a house sooner than later because the after tax benefit of owning a home outweighs waiting and saving more money.

Any additional funds that you have after putting 5% down that you want to apply toward the mortgage, do that until you can get to 80% of the original sales price then the mortgage insurance piece will fall off and then your payment will even be lower. Then, take the portion that you were paying towards PMI and start paying down on the ‘principle’ (the snowball effect). The sooner you get to a balance of 80% of the original sales price, the sooner you can start applying the PMI fee toward the ‘principle’.

Establish accounts with Equifax, Experian, and TransUnion if anything needs to be disputed on all three bureaus.

Future Process:

1) Lender will get us a Pre-Approval Letter

2) We will locate a property

3) Negotiate contract/negotiate terms

            a) negotiate seller willing to pay closing cost

4) Give Lender a copy of negotiated contracts

5) Lender will work up the numbers and determine if they want to lock in an interest rate

6) Property Inspection, and condition of property is acceptable by your terms

7) Lender will order the appraisal

8) Once appraisal is completed, it will be sent to underwriting (72 hour process)

9) After underwriting approves, lender draws the closing documents and send them to the title company here in town

10) Title company will prepare the settlement statement and all of the numbers

11) Seller and buyer will sign papers

12) Lender will send a wire to fund the loan

13) Exchange of keys

**Lender guarantees a 25 day closing from the time you have your contract

 

Lender needs to have a credit card on file for appraisal $400 fee is charged at closing or upon cancelation

Winter months are historically better rates (research online if you want)

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)

An Old Score Settled

Today, I took on an old dragon that I thought would never wake. I didn't want to wait any longer to find out if he would.

I negotiated an old debt down to a 55% of the original. I got it and used a portion of my intended downpayment to pay it off in one lump sum. I was given the confirmation number. But the confirmation letter showing a full payoff with $0 balance will not come until the next business day.

I tried to get them down to 30% but they said they could only do %60. I was a little pushy and got the manager to lower it another %5. I'm happy.

I asked them if they do deletions but they do not. The mortgage lender volunteered to handle the details after I get the confirmation letter. They told me it should take about 2 weeks to clear everything up.

I guess the question on my mind is, shouldn't I wait for a while and let my credit score improve so that I can get a better interest rate?

My wife and I are prepared to continue to save, let our score improve and take our time with all of this. The management coming down and fixing the a/c today has helped our patience.

In the end, it is a nice feeling knowing the dragon has been slain if nothing else just for the peace of mind.

By the way, I found the missing W-2 form I was looking for during lunch yesterday.

Credit Check Speedbump

Well, we have hit a snag. Which is a big reason we are looking at financial backing first. ...to head off any troubles before getting excited about a house.

I have an old bruise on my credit that has never been resolved. It's a 5 year old bruise. The damage was done, I took the hit on my credit score. I've just been waiting for that old dragon to fall asleep for good.

Well, according to the lender, the particular debt buyer currently holding me hostage has a very tricky way of maneuvering around the law to keep the debt looking fresh. So it doesn't look like a 5 year old debt.

It has been suggested that the creditor and I come to an agreement and settle.

Additionally, the lender is talking about going after a no money down type load. That would be cool but its a USDA loan, which will really restrict us from the number of homes we can see.

I don't like not having options. I have suggested that we just continue to seek what we came here for. That is to find out what we can afford. Meaning a dollar amount, not an actual property.

I made this clear to the lender that if we need to prepare more, then that is what we will do. We are not going to settle for a narrow selection. We will wait it out if neccesary.

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

Credit Check Cleared

Apparently the credit check was indicative of greatness. The lender requires some additional paperwork to complete the pre-approval process. I'm waiting to find out what paperwork they need.

Running my credit

So, I've chosen RE/MAX as my realtor. They called me and referred me to a lender. I was advised that it may be a good idea to avoid the huge banks (the untouchables). So, I have spoken with this smaller lender and they have enough of my information to find out how much house we can get.

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.