Readers, you know that A and I have been in the process of buying a house. You (may) know that moving to a larger, forever-home in a quieter, safer, more convenient neighborhood has been a goal for about three years.
It finally happened.
I’m not sure it has hit me yet. I’m sort of dancing on a cloud. But despite my high, this whole home buying experience had a lot of lows. We got an amazing deal on the place, but as they say, you don’t get anything for free. Our amazing deal doubled the time we thought it would take to close, and there was so much uncertainty. It was an ordeal.
But I promised a post outlining the nitty-gritty, so here it is. What we went through to get our new-to-us family home, broken down week-by-week (enjoy, you real estate nerds! Everyone else, you can stop reading now).
Week 1: Browsing real estate listings, I see our future home on the market, and it’s just been reduced by a LOT. Even though A and I aren’t 100% sure we’ll be buying soon, we decide to go look. It definitely needs work, but we like it, so we put an offer in right away, fearing competition. Offer is accepted the next day. So far, everything is moving quickly and smoothly.
Week 2: The big home inspection. We know if it shows major defects, we’ll have to back out, because with two mortgages, we won’t be able to afford major repairs. Hallelujah, the home is in even better condition than we thought it would be. We remove the inspection contingency in our purchase contract and decide to go forward with the purchase.
Week 3: Our loan is in underwriting with our lender, which means they’re going over our bank statements, taxes, paystubs and other info with a fine-tooth comb. We wait nervously (especially me), second-guessing our true ability to borrow a large sum of money. Also, our sanity.
Week 4: This week started on a high note, with a conditional approval from our lender. That means our finances, employment history, etc., have all been verified and the lender likes what they see. They commit to lend us the money, on the condition that the home appraises for at least as much money as we’re paying for it and that it’s in decent condition. That’s all standard. Cue dancing.
Three days later, our hangups begin. The lender decides they will only lend us the money if we repair loose tile in the bathroom, an electrical issue that’s not to code, and have roof, plumbing and electrical inspections on the house. This was a major problem, because we are getting a conventional loan, and lenders almost never ask for repairs on something that isn’t a safety hazard for a conventional loan. The electrical issue we could sort of see, but the tiles??? And all the extra inspections?? Luckily, our realtor went to bat for us and got the inspections waived, but we were still stuck with two repairs.
We really want to tackle the repairs ourselves, or at least be the ones to hire contractors, because we know a great electrician, and the tile work would be a breeze for the right person. But unfortunately, the matter is out of our hands. We have to wait for the seller (Fannie Mae) to get contractor bids on the project, then for the contractor they choose to do the work, and then for our lender’s appraiser to come out and tell the lender that the work has been done. And one more thing to complicate the matter: Fannie Mae has allotted $500 for repairs. If the repairs we need exceed the $500, we might have to pay out of pocket, or re-construct the contract to reflect a lower price to match the repair expenses. In short: one week before closing, we suddenly have a potentially messy situation on our hands.
Week 5: We wait for Fannie Mae to bid out the repairs. All. Week. Long.
Week 6: Still waiting, with no word. Our realtor informs us that Fannie Mae has just implemented a new online communication system, which has bugs. Our purchase contract expires, and we have to get Fannie Mae to sign an extension.
Week 7: Still waiting. Nothing. Our rate lock expires with our lender, but luckily, they extend it for us for three more weeks for free. We begin panicking. Our realtor finds out who his Fannie Mae contact’s boss is, and contacts him. We sign another purchase contract extension.
Week 8: Our realtor finally starts getting answers. We find out that Fannie Mae has bid the project, and it will be $1,000 total. We have to wait to see if they will pay the difference or if we will have to. We sign another extension.
Week 9: We learn that the contractor has bid re-doing the entire shower instead of just the loose tiles. The total for the projects is $2,000, but Fannie Mae has agreed to pay it all. Yes! The work is completed, and our lender signs off on it. We had a slim chance of closing this week, but Fannie needs three days to get it done. We sign our final extension.
Week 10: I had to be at work, but A got to do a final walk-through the day before closing to see the repairs. Turns out the contractors hadn’t redone the entire shower, but the work looked really good. But, (drumroll for you electrical nerds) they replaced our fuse box with breakers! A huge upgrade that we didn’t expect to get. The next day, we close smoothly. Finally. Whew!
My advice, for anyone out there thinking about purchasing a home, is (1) to get a buyer’s agent you know will work hard for you, and (2) only buy a Fannie Mae or similar foreclosure if you’re really, truly in love with the house. What should have been a pretty routine escrow process, even with the lender repair requirement hiccup, became a nightmare when we went three weeks without answers from an uncaring government agency.
In all, I’m so glad we stuck it out for this home. Lots of before/after photos to come!