When Mike and I decided we wanted to purchase a home in time for the tax credit we knew there would be some bumps along the way. For one, we'd be buying at a peak of interest in the housing market. Secondly, we decided we wanted in on it the last month before it would be over, so it was crunch time. And finally, we had never done it before...which I guess is implied since we're eligible for the first time home buyers tax credit.
So we made our list of things we wanted in a home and how much we thought we could afford. Then we went to JP Morgan Chase bank to get pre-approved. This part of the process is deceptively easy. We were in there less than 5 minutes and were approved for a decent amount - an amount we had already decided we couldn't afford. That is why my first recommendation to anyone considering buying a home is: Decide between you and your sweetheart (Or if it's just you, then you and your finances) what you can afford BEFORE you go into the bank and ask them. Of course they want to convince you you can take on a bigger loan, that's how they get money.
Anyway, we simply asked Ron Riedell, our mortgage loan officer, to reduce the price on the approval letter to where we were comfortable. He complied. This is also something I'd recommend: your loan officer can state whatever price you want on the approval letter as long as it's at or under what you're approved of. If you make it lower, then when you go to a home that's slightly above, you have purchasing power to sway them down, because you're already approved. That's what Mike and I did, and are so glad for, because if we hadn't, the home would have gone over appraisal value (we found out later) and the whole deal would be off.
So far so good, right?
So we start off on our home quest, and I have to say this is the most fun, most time consuming, and most frustrating part of the whole ordeal. Here's how it went: We'd check dozens of online databases for homes we liked that were in our price range, using www.hompath.com , www.sawbucks.com, bw home team and others. I know a lot of people will just look for a realtor they like and have them show them homes from then on. We tried that at first, looking up who was the best around and such but we didn't find anyone we really liked that way. Instead, we looked for houses we wanted, met whatever realtor was showing it and decided if we liked the realtor and/or the house. This is how we found the realtor we do really like, Trish Cloud. I think she works with BW Home Team now...though I'm not sure, she just switched. Anyway, we sent her a question about a home on her site, and she replied promptly - not only the same day, but within 15 min! - and was really nice, so we decided to go with her.
Trish has been really great. She showed us tons of homes, and wasn't skimpy with her time just because we weren't in a higher price bracket. She's done a great job. That's not to say we weren't still looking up homes on our own, because we were, and I strongly encourage everyone to do that too. Once you find a realtor you like, keep looking for homes you like, even if they're looking too. The sooner you find an awesome steal that goes up and act on it, the better chance you have of getting it.
So we finally found the home we wanted, it fit nearly every point on our list of things we wanted, which was rather comprehensive, and was in our price range (keynote: OUR price range, not the bank's). We were the first ones to go see this home, which was newly renovated and pretty cheap, and decided to hop on it. We sent everything in, including an offer below the asking price and asked for closing costs.
This is when negotiations start. The owner turned back our proposal and asked for higher than the asking price, because we wanted closing costs. We said no, we'll only pay slightly higher than we first offered. He said no, he wouldn't take less than 2 thousand over what he asked. This is when we used our pre-approval letter trick. To be honest, our letter still said higher than what we wanted to pay, so I asked Ron to write us another for lower. He complied. We then took this to the seller and said, Hey look! We can't pay higher than this, BUT we are pre-approved and ready to go. The buyer huffed a little and took the offer. YAY.
So now we've entered the most frustrating part of the whole process. Turning everything over to the lender and waiting. Blah!
All we had left to do was our appraisal, which we did, and it turned out very well. No foundation problems (a miracle in Texas, especially for an older home), and since everything had been replaced by the investor we were buying from, it was appraised highly. The appraisal was done during our 5 day option period (usually it's at least 7, but our seller wanted only 5 since he was going with our lower price). An option period is a period of time where the seller can't back out of the contract for other offers because you're saying your in, but you don't have to lose your earnest money yet. We paid 75$ for our option period. This means that for any reason, we could back out of the contract for only the 75 $ without a penalty. This is nice, and not allowed in all states, because earnest money can cost $500-1000! Earnest money shows the buyer that you're sincere and that if he takes the house off the market and starts the fees of ordering the new title (which custom has the seller pay), he has some guarantee he won't lose everything if we pull out after the option period and before the clsoing date. So our appraisal done and option period over, there's literally nothing to do but hunt insurance (which I posted on earlier).
The waiting period is already very frustrating, because you just want word if everything you put on the line is going to go through. It's ten times worse when you work with someone like Ron Riedell. Once he has the paperwork saying he will, he's no longer amicable and helpful. He doesn't answer phone calls or emails and doesn't update us on anything. The only we've been able to get a hold of him is by calling the branch he's at that particular day and having them not only switch us to his line, but walk over and tell him there's a phone call to answer. OI. For someone who's making a NICE commission off of what we're giving him, you think he'd be more helpful. So the days ticked by and here we are, 2 days before the contracts stated closing and we're still just waiting.
What does the lender have to do in this time? Ask for a bank approved Appraisal so they know their not investing in a home that's worth less than the price they're helping us pay. And make sure we check out (most of which they already did when they approved us: credit checks, address checks, etc.). The buyer pays for the appraisal and is refunded the cost at closing if they don't back out. We were charged for the appraisal 1 1/2 weeks after the paperwork went to Ron. It was done this past Friday. That's not usual. Usually when the money goes out, the appraisal is ordered and it happens very promptly afterward.
So everything's good, right!? NO! bah. Now underwriting has to look it over and see if they do, in fact, think it accurate (what do they higher the appraiser for then anyway?? They should go look at the home themselves). Lucky for us, at least the appraisal came back higher than what we're paying, yay! So now, again 2 days before we're supposed to close at the latest (!), we're still just waiting for underwriting to dittle around before they approve what has already been approved.
There's no way to get a hold of underwriting, we've tried, and Ron's still playing the disappearing act.
In short, I'd like to say:
Dear Ron Riedell, Chase, and Whoever Chase Contacts for Underwriting,
FINISH what you started, and FINISH it NOW.
Yours Truly,
Carolyn
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