It always seems that something drives to me write about issues that come up! And here is another one that happened to two of my clients. We looked at 10 – 12 homes, choose one that they fell in love with and all the while, thought they were prequalified…and they weren’t. Lender rules have changed dramatically in the past several years and Realtors and Lenders are under stricter guidelines. When Realtors ask you for a prequalification letter from your chosen lender, we are not doing this to make you feel bad. We are protecting your time and investment in looking for a home. There is nothing more frustrating than to spend time looking, running numbers, making decisions, dreaming and then finding out you can’t buy.
If you are putting a large down-payment down or paying cash, be prepared to provide documentation that your down-payment is accessible. Cross out account numbers and provide it to your Realtor. Your Realtor Is often required to send it in with the offer and any preapproval letter you have provided. If you have cash under your mattress, you have to document where it came from. Ie: One of my clients sold a Streamline Trailer and put the cash in his bank account. It held up closing while we waited for him to find the buyer and get a receipt to prove where it came from at the last minute.
Lender rules are tougher and Realtors have to abide by them.
Your Realtor and your Lender are your team and are here to help you in any way possible. If you need a Realtor, call me. I would love to be your dream guide.
I received an article on Facebook from a friend yesterday and I decided to blog my response. I think I shared with you my moving adventure earlier this month. Now I will share with you that I bought 2 properties in WA in 2004 and 2 properties in 2005. All from the proceeds of the sale of my condo in Channel Islands, CA. One of my friends was a lender with Countrywide. And again I was not in real estate and was depending on my lender and my agent to see me thru all this. What I learned from this is that it is not their responsibility. It is mine.
Being an agent today, I can truthfully say, my views have changed. It is my job to provide my clients with the best information available to help them make good decisions. I am not a lawyer or an accountant and I do not give legal advice. At any time, you can talk to a lawyer or accountant to get a better feeling about what you are doing. But the bottom line is, it is the buyers responsibility to do their due diligence in regards to making the biggest purchase of your life. Just because you can buy a home with very little down, doesn’t make it the right purchase for you. Read the contract and make sure you understand the terms. Get more than one good faith estimate. If they won’t give you one, something is amiss. I have had to learn the hard way…you don’t have to.
Inspecting the home.
If you are buying a home, you should plan to have a complete inspection done. I will provide 3 inspectors that my clients have used and respect. Generally, their cost is about $400, give or take. You can find them online for half of that and you are welcome to use them, but my experience is that you don’t get a complete inspection. Do they go into the attic and inspect? Do they crawl under the house and inspect? Are they certified for WA pest inspections? Do they run the appliances to see if they are working? Do they give you a written report with photos of the inspection? The most important part is that you plan to be present at the inspection. We have many unique reports and/or data that we supply to you to help you make the best decision for you.
I lucked out in that I bought two rentals in 2004 with 20 percent down and arm loans. I didn’t understand them to be honest. And I wasn’t present at the inspections because I bought them while living in CA. Big Mistake. Now that I am in real estate and have more experience, I realized what I had signed on for and was able to sell them in 2007 before I got into deeper trouble. So I am very careful when working with my clients to line them up with lenders that will take the time to explain the intricacies to them. It is a big purchase and I want you to be happy with your choices and have an awesome experience but buyers have to take responsibility for what they are signing. The biggest benefit to you will be that you will enjoy your new home and that you can learn from my experience.
I have a friend who bought their home in 2006 from a relative. So they paid top price. They have tried 10 times to refinance and their interest rate is almost 7 percent. They have always made their payments and their jobs wages have increased but were always told by their lender and other lenders that their loan to value was too high which means they owe more than the house is worth.. At one time they talked about walking away from it. Everytime a new plan would come out from the banks, I would encourage them to apply. Finally, yesterday they finally got it done after 3 years trying. Their payments on this $270,000 home dropped $600 per month. Don’Blog Postst take no for an answer.
The banks are now asking for the buyer to pay the excise tax which is normally the seller’s responsibility! They are also demanding that the buyer pay both the seller’s as well as the buyer’s title and escrow fees which can dramatically increase the downpayment needed to close a transaction. In some cases this is negotiable but as we see multiple offers more and more, the banks are taking advantage of this. And adding these costs to the price of the house can affect the appraisal. So Buyer Beware!