Tuesday, June 23, 2015

How To Buy A House Part 3

Below is another post on our experience of buying our first home. I've written a couple previous posts about applying for a mortgage, finding a real estate agent, finding a home, and final putting in an offer. Once you are able to get an offer accepted on a house, then you begin to get into the nitty gritty details of home ownership. I'm sure everyone experiences will differ from my own, but I figured it would be good to put down how it all worked out for Dan and I in hopes that it will help you through this process.

One thing that I didn't realize is that it can take between 30 to 45 days to close on a house. For someone as impatient as I am, this will likely seem annoying/anti-climatic/frustrating, but it will fly by before you know it. During that time period, you should schedule for a third party inspector to do a general inspection of the entire house and yard. Ours was very thorough and came along with notes and pictures of the areas of concern (we used the inspector our real estate agent recommended- it was only a couple hundred bucks and totally worth it).

After you get the results back from the inspector, you and your real estate will start working on a repairs addendum to your contract. Usually you ask for all the large repairs that the inspector pointed out, and the seller will agree to some of them, and you haggle accordingly. We ended up getting our sellers to decrease the overall cost of the home and pay for closing costs (anywhere from $8-10k) in return for us buying the home as is. We decided that we would take the extra money and hire the contractors to do it ourselves. This isn't the right choice for everyone, but it worked for us.

From a bank perspective, you obviously notify them once your offer has been accepted by the seller. We had already decided on what kind of mortgage we wanted, so they drew up all the paperwork. We had to "lock our rate" at a specific time, since mortgage rates change multiple times a day. Be sure to keep on eye on the rate and lock when its at its lowest. A week or two before you close, you will get a HUD, which pretty much outlines all of the costs associated with the house. It shows how much your bank is paying, how much closing costs are, and how much you are paying. It looks pretty complicated, but in the end all you have to check is the mortgage amount and the down payment amount you will have to give up front. The escrow company goes over all the little details during the signing.

Once you get to this point, there are usually three points of contact that you will be emailing/calling: your real estate agent, the bank where you are getting your mortgage, and the escrow company. Obviously  you will know the first two, but the escrow portion was new to me. Pretty much what they do is act as a third party to receive the money from the buyer (and bank if you have a mortgage), get all the paper together, and pass the money onto the seller. Your mortgage company will tell you who is the Escrow company for the property.

Honestly, I was really unimpressed by the escrow company. It sucks that the buyer chooses the company and the seller has no say over it. However, I heard most escrow companies aren't that great, so maybe there weren't any better options. They didn't contact us with an appointment time until the day before we were signing the papers, which give us little notice to block out our calendars at work. They also sent 2 different amounts that we needed to bring a check for, which was very confusing (especially since  you have to get a cashiers check from the bank, which is an extra step).We got it all worked out in the end, but I was honestly a little annoyed with how last minute the process was.

An interesting thing that we learned during this process is that Oregon signing and closing happen on different days. You have to sign all the paperwork and bring the check to the escrow company during signing, which is before you technically close. You don't get the keys until the following business day, after it posts to the county. It was definitely a strange process, because in New Jersey you sign and close on the same day (you sign the papers, hand over the check, and get the keys all at one meeting).

Anyways, after several weeks of signing papers, negotiating, and meeting we finally got our new home!

Here are a couple of lists of things that were beneficial to me throughout the process.

Step by Step Process of Buying a House:
1. Obtain financing (mortgage, savings, etc)
2. Ask for a copy of the preapproval letter
3. Find a house and submit an offer
4. Possible counter offer/ bargaining
5. Mutual acceptance and deposit of earnest money
6. Inspection and Inspection Addendum
7. Negotiate what needs to be fixed
8. Signing with escrow company
9. Final closing, get the keys to the house

Where you need to update you address:
Banks/Credit Cards
Any retail profiles you have
Airline Reward Miles

Be sure sign up for / check the following:
Garbage Collection
Home Security if wanted

Your real estate agent should be able to tell you what companies the previous home owners used for all of these utilities. I transferred all of mine into my name online. Make sure you set these up within the first few days of moving so you won't be stuck without electricity!

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