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Happy Thursday!
Closing went by like a blur! For all the hassle that led up to this date, closing was a breeze. It took about 40 minutes and was full of pleasantries, jokes, and of course, us signing our life away.
One thing I did find annoying is something that Mrs. Seller did throughout the closing. She kept saying [in a slightly condescending manner], that she had to read through everything. Each document she sat and stared at for slightly longer than her husband and IMO unless she is a speed reader she couldn’t have read through the whole document that quickly, but still she kept saying she needed to read through everything and making such a big deal about it. She said it so many time it started getting on my nerves, especially the way she was saying it.
At the time we were not reading through everything because the closing agency had sent us most of the documents in advance and the lawyer was summarizing each document. But, I couldn't exactly blurt out... well, we already read through most of this and that is why we are looking irresponsible right now!!
And furthermore, let me remind you about the big taboo we had with the closing date being on July 25th. In the seller’s arguments against the 25th they referenced the original contract, which stated that the closing date was on the 31st. However, this ‘big taboo’ took place after the addendum was signed, in which it stated that the closing was on the 25th, this of course was a document that Mrs. Seller signed and perhaps did not read the whole way through…
On the way back to DE from our vacation, Matt called Mr. Seller to schedule the final walk through. This is typically done with your realtor prior to closing to make sure everything is in order. We would be doing it with Mr. and Mrs. Seller because we have no realtor AND this would be the first time we met them.
The closing was scheduled for 1:00pm so we scheduled the final walkthrough for 12:00. We just hung out all morning, thrilled about everything that was about to happen! It was a great day!
We drove up to the house and there they were, the bane of our existence [slight exaggeration]. We had decided before driving up the house that we would be the MOST gracious buyers possible, because although Mr. and Mrs. Seller had taken years off of our life due to undue stress, they were selling their house full of memories and it was certainly not an easy process for them.
To our delight Mr. and Mrs. Seller were very gracious as well. It was like we were with an entirely different couple than we had been dealing with for the past 2 months. Mrs. Seller walked me around the gardens and described the plants to me and Mr. Seller told Matt the history of the neighborhood. We met some of the neighbors who were overwhelmingly nice and went on our way to inspect the house.
We walked through the house and tested everything like it was a home inspection, as that is what ‘they’ recommend you to do. We ran the washer and all the faucets and checked all the rooms. It was good to go!
[love that carpet!]
Next step: Closing!
Mr. and Mrs. Seller never responded to our email about the earlier closing date. We were trying to enjoy our vacation, but it was impossible to do without knowing what was going to happen with closing. We wanted to close the day after we got back from our vacation [July 25th], but Mr. and Mrs. Seller didn’t want to close until the last of the month, the last day of our lease [July 31st].
We called our lawyer and asked what we should do. He was so gracious to call Mr. and Mrs. Seller and see what was going on. And you know what was going on? Mr. Seller was at the house packing up and getting everything ready for closing on the 25th! He had just failed to mention this to us!
You want to talk about making my day! I was through the roof! I just wish he had told us: WE WERE CLOSING ON THE 25th…. It was almost over!
Boy did I sleep well that night! I had dreams of all the renovations we were about to start!
[Happy Dance!]
Our vacation was just what we needed. Well, it would have been even better if we had not ran into all the problems that we did with the closing date and if it had been a little longer. But escaping town and hanging out with family was just what we needed.
Nearly every summer for as long as I can remember my family heads up north for a quick vacation before school starts up. However, as everybody gets older and cousins start having their own families, not as many people end up going. I admit, I have missed some of the past few summers because of work obligations too.
This year was one of the smallest crowds that we have had in a long time. There were only 6 of us up there and sometimes we have nearly 20! Usually, we all squeeze into the house with mattresses covering the floor. Traditionally, the ‘grownups’ get their own rooms, but us “kids” split up with the boys in one room and the girls in the other.
Don’t tell, but since there were only 6 of us this year, my husband and I shared a room!! [shhh!]
[view from the lake]
The house is close to a great lake that we go to for swimming, windsurfing, and canoeing. [I am not an ocean person, I would take a lake over salt water any day of the week!]. Two years ago I swam across this lake for the first time! It was exhausting! I think it is about a mile across [without all of the zigzagging that I did].
We are also close enough to take day trips over to the white mountains for some great hikes and this year [I am proud to say] I finally climbed Mt. Washington!
[Before the hike]
This is a hike that my cousins and brothers have done nearly every year since they could walk. I have always wimped out and spent the day at the lake or hanging out around the house. Two years ago I had my mind set that I was going to hike it, but because the weather on top of Mount Washington is so unpredictable and was calling for hail we decided not to! [smart move]
[Me up top and Sam down bottom; note the difference between the skies on the way up and the clouds at the top!]
But, this year I made it! We went up Huntington's Ravine, which has some pretty tough climbs and is said to be the most difficult trail in the White Mountains! Needless to say I was not thrilled about taking this route, but we took it because it was part of the tradition and I’m glad we did!
[Matt, me, Cousin-Jed, and “little” brother Sam]
We went down Lion’s head trail and it was incredibly boring, relatively speaking. Huntington’s was definitely harder, but at least you weren’t just hiking the whole time and we got to scale some rock too!
The hike was amazing! Although my knees were killing me after the hike back down, I’m so glad I did it! I am so excited that I can say I crossed that off my list!
My List:
24. Climb Mount Washington
Fun Fact: This is also where Matt and I celebrated our honeymoon 5 years ago :)
Matt and I rescheduled a vacation to the weekend before closing [it had previously been the weekend after/during the potential closing]. This change of date did not only changed our plans, but it was a vacation with my mother’s side of the family and therefore changed a lot of people’s plans.
Fortunately my family was very understanding and wonderful and changed their vacation to accommodate our preferred closing date. Changing the vacation was what we thought was going to be our biggest hurdle in terms of scheduling the closing.
Some background: While we were in the process of putting our offer in writing we had to set our closing date at least 30 days out from the date of the contract [this date is listed within the contract and states that the closing will be on this date unless both parties mutually agree to have it changed]. If the sellers had been satisfied with our initial contract [see more on this fiasco here] then this would have given us plenty of time to close before our lease was up, meaning 30 days from the day we signed the contract would have been perfect for us [see more on this here]. However, that did not happen.
We had to set the closing date on the last day of our lease and the lenders agreed that if everything went smoothly we would be able to close earlier. We thought everybody was in on this because throughout our closing process we emphasized that we wanted to close earlier than the date listed on our initial sales contract. We even have emails stating that a quick timely closing would be ideal for Mr. and Mrs. Seller also [I imagine paying 2 mortgages on a house they weren’t living in was not their idea of fun, which is what they were doing].
Every time a document went between the two parties that needed to be signed my husband would say something to the effect of: “A quick response would help us close early.” Unfortunately, this was typically via a voicemail so we do not have a written record of this [FSBO ADVICE: try to do as much as possible in terms of negotiations in writing].
Okay… that is a lot of background… I swear I’m getting somewhere with this.
Once the addendum was signed we left Mr. and Mrs. Seller a voice mail and sent an email stating that we had scheduled the closing for July 25th. We had incorrectly assumed that we were all still on board with the early closing.
This was the morning we were leaving for vacation.
A day or two after we arrived, we received an email from Mr. and Mrs. Seller stating that they were under the impression that the closing date was still on July 31st and since this was stated in the contract, Mr and Mrs Seller said we should reschedule the closing for the 31st. Mr. and Mrs. Seller also said that it was a surprise that we wanted to close early.
[rips out hair!]
We were livid… LIVID! We had been bending over backwards to get everything in line for closing on the 25th. We had stated several times in voicemails that we wanted to close on the 25th, but now once everything was just about signed sealed and delivered, they wanted to push the closing back to the 31st so that we had to move our entire house in less than 24 hours and there was no way that we were going to be able to refinish the floors.
We sat and stared at each other. Well, we actually didn’t sit and stair at each other because at the time we were out on a bike ride and had just happened to stop so that our hearts didn’t beat out of our chests to catch our breath. [We were biking up a 15% grade hill when we were supposed to be on a nice flat ride… whoops] Matt took a look at his phone and saw the email… the news did not help us me make it up the hill, however it gave my husband a little extra kick.
At the top of Mount Everest the hill we remembered that Mr. and Mrs. Seller had signed an addendum that stated the closing was on the 25th. They could not throw the contract in our face that said the 31st, since the addendum noted the changed closing date [sigh of relief].
We biked back to the house and drafted an email. We edited and rewrote that email probably 15 times to make sure that we didn’t say anything that we would regret. We wanted to keep the relationship cordial and didn’t want to express how frustrated we were with their email, but we wanted to get our point across. Essentially the email stated that 1. we had been hoping to close on the 25th since day one, 2. that we had said it several times [this was nothing new] and 3. that they signed an addendum stating the closing was on the 25th.
We shared the email with my brother and cousin, they helped make it sound less aggressive and sent it.
Unfortunately, this did not help me sleep at night, I was afraid that although we were trying to be cordial it didn’t wouldn’t come across that way, and that although they signed an addendum that stated the earlier date, their lawyer would find a way around it. I didn’t think that things would go our way.
I didn’t sleep very well for the next few nights because they never responded to the email.
So, my husband and I reconvened and decided to lower our request of concessions from $5,000 to $3,000.
We went back and forth on what our offer should be for quite some time. As I have said in previous posts I would have been willing to accept the $2,000 concession that they had offered, but I wanted more. There were a lot of things to fix.
We decided on $3,000 because that was in the range that they had originally given us for what they wanted to sell the house for and so they should accept it. Although coming ‘up’ to their range did bother the heck out of me: The range that they wanted to “stay in” did not account for all of the problems that were found in the home inspection.
We sent them the new addendum with the $3,000 concession and a closer closing date [this will be another whole blog post to come]. We attached the addendum to an email that said that this was our final addendum.
The sellers responded within 2 hours with a signed addendum and we were in business. We had our final purchase price with concessions and a closing date…. Or so we thought…
[I feel like there should be some mystery plot music playing here--dum dum dum-haha!]
Well, they responded to our request for them to concede $5,000 for repairs on the house. They said “no”. Well, that is not technically correct. If they had just said “no”, we would have simply signed their $2,000 offer and then been on our merry way to closing in 9 days as we had planned. But, they said “no” and then explained themselves and their explanation was crap not very sound.
They argued that we should stay inside their range that they had stated in the negotiation process and that since we were at the very bottom of their range, they were not willing to concede anything more than $2,000 [which was the actually $1,000 above the bottom of their range]. We were frustrated that they wanted us to stay within this range even though they were not aware of all of the issues going on with the house [or they lied in their disclosure].
Their range was a number that we have since decided was 94% of what their house appraised for or essentially what they would have taken home if they sold the house for $X [the appraisal value] and paid their realtor a 6% commission. The problem is, their house was appraised in September of last year and the housing prices have since dropped. Also, I do not believe the appraisal value took nto account the fixes that need to be done to the house [e.g. a new roof, a new HVAC, fix lose wires, mold remediation].
However, if they still feel that their house is worth the appraised value [in spite of the roof and other issues], we can certainly see how they would be unwilling to sway. On the other hand, our appraisal came in at the sales price, so that is a good indication that the market has dropped.
We sent them an email stating our disappointment and explained all of the above. Matt and I needed to have a talk and figure out what we wanted to do. We were hoping that the fact that the house appraised for the sale price would make them more flexible. But, we shall see.
10 before the closing, we still didn’t have the final contract because we were waiting for the signed addendum [or a response to the addendum]. And we were working towards getting everything in order for closing. We were heading out for a vacation on 5 days before closing and wanted to make sure we had as much in order before we left as possible.
So, I emailed our lender and my husband had a chat with the lawyer. The lender needs us to do the following:
- Give written explanations for some activity that has shown up on our credit report:
- Credit Check from Quicken Loans
- We signed up for a new Costco AMEX card, we figured given how much shopping we did there, we might as well get the card.
I feel like the explanation for the two credit checks was obvious [we were comparing rates], but what they emphasized was that they needed was proof that we weren’t going through with them.
We wrote short and simple letters that explained why those transactions popped up on the credit card and that satisfied our lender. No big deal :)
So, Mr. and Mrs. Seller had had our counter addendum for about a week, which in house closing time is an eternity. They are not required to respond until the June 21st [4 days before closing]. This wasn’t a huge problem, but we did run into some issues with the lender and the settlement [law] firm.
Both the lender and the settlement agency need to know what the final sale price is going to be, including concessions and the like.
The lender needs to make sure [I’m not quite clear on why this is] that they concession is not in an amount that is larger than the closing costs. Our representative from the lender told us that otherwise it would be as if the seller was giving us money. I personally don’t see the issue of this, to me it is the same as lowering the agreed upon price of the home. We are asking for concession, right? Not an assist in closing cost. I think that the there has been something lost in translation.
In addition to that, our settlement agency was not on the pre-approved list at the lender, therefore before the lender would fully commit to our closing date, they wanted the title search and title insurance to be completed… this was a problem.
The problem for our settlement agency was that our paralegal did not want to get the ball rolling with all the closing items [survey, title prep, etc.] until we had agreed upon a price, otherwise we would have to pay for these items and not have a house to show for it.
In the mean time, we were jumping through hoops for the lender and our seller and in addition to other things going on in our life and we were under the impression that we were under contract with our seller and therefore everything that should be in motion for closing was.
We were [disappointedly] wrong. So, to fix this, we explained to our paralegal that we were going to go through with the purchase even if they sellers did not meet our concessions of $5,000 and that we would accept the $2,000. After that, everything was in motion! It looked like we might actually be buying this house!
To say the least, I’m frustrated and tired of home buying process. It seems like every time we contact our lender there is another document to fill out, another step to make before we can actually settle on a closing date.
I want to be done with this process, move into our new house, and refinish the floors… is that too much to ask?
The list of things to have ready for closing is growing!
At least its Friday!
[Penguin has had a long week too!]
After going back and forth a dozen times we finally decided how much we were going to ask for in repairs. Often times, the buyer will request that repairs are made prior to closing, but because we were in a hurry to close (pending end of lease), we simply asked for a concession.
Because of the roof being a major concern we budgeted in the concession for a new roof in the coming years. In addition, we wanted the HVAC to be serviced and the chimney to be cleaned. In total we asked for $10,000.
While the $10,000 would only cover the cost of roofing the house, we knew that the roof was going to need to be replaced going into our initial offer and that we were not making an offer on a house that had a brand new roof. If the roof was brand new, obviously the house would be worth more. So in reality only part of that money was to go towards the roof.
We thought this was a reasonable concession given all the items on the [40 page] home inspection! They did not seem to agree.
Their counter was $2,000. I promptly fell out of my chair at work and became sick to my stomach. However, after getting back in my chair, talking with Matt [my husband] and calming down a bit, we realized they would probably come up a bit from that and $3,000 would cover the cost of fixing the roof that had a history of leaking [we had a contractor come out and give us a quote]. Getting the HVAC services and the Chimney cleaned wouldn’t be over $500 and we could swallow that. We decided that we would accept $2,000 if that was their final offer, but we thought it couldn’t hurt to try for more.
Our counter to their $2,000 was $5,000.
Question: We only ever talked to our lawyer about concessions, we have never asked for items to be repaired, have you?
A couple days after my dad did his ‘drive by’ home inspection, we hired an inspector to come out and take a good look at the house.
Most of the home inspection went as expected as far as repairs go. We DID NOT, however, expect for the inspection to take 4+ hours. This is our third house and previous inspections did not take anywhere near this long, this was abnormal. Abnormal, yes, but in a good way: Our inspector was extremely thorough.
I have to admit sometimes being young has its drawbacks when it comes to grownup things (e.g. buying a house/car/or any big purchase for that matter). At 27 I still get treated like I’m 16 by some people, but being that the inspector was closer to our age than most, he was having a good time showing us what needed to be done. [Unlike the past inspectors who act like we are just getting ourselves into a big mess that we can’t handle and giving us phone numbers to call for repair work.]
Another reason I think everything went well is that he realized we sort of knew what we were talking about. I grew up in a house where there was something always under construction. I ran electrical and framed in walls when I was in my teens, spackled in diapers (complete exaggeration) and helped my dad build a deck with I was losing my first set of teeth (not an exaggeration, although he may say I wasn’t helping-a lot of nails were lost that day).
Anyway, back to the inspection….
Dale [the inspector] was a hoot and half, especially by the end of the 4 hours. Eventually, we found out that he was an actor [in addition to his day job] and he acted in local musicals. This explained why while he was climbing around the house he was belting out some impressive opera. So in the end he was both thorough and entertaining.
As far as the inspection went he said the roof was nearing the end of its life, the sunroom needed new carpet and some mildew abatement, the furnace was old, and some electrical work needed to be done.
The inspection was done on a Monday and we didn’t get the report until Thursday, but it was 40 pages long, which explains the delay. In the past we have gotten them the next day or the day after. So, how long this takes definitely depends on your inspector. But, since we were there during the inspection we had a good idea of what was going to show up in the report.
The next step was to determine how much we were going to ask for the repairs that needed to be made…
My dad came through town on his way up to my Uncle’s house to take a look at the new house. While it is on the way in terms of direction, in terms of traffic, it is way out of the way (there are much better back roads to take you from my Dad’s house in Northern VA to my Uncle’s house North of Philadelphia).
There is nothing better [in my opinion] than having my dad look over our new purchase. When my mom and him were first dating they built several homes together [crazy huh!?], so he knows a lot about what should be and what shouldn’t be going on in a house.
The problem with the whole visit was that he was coming in at a bad time. My dad was supposed to arrive at 1:00, but because of the aforementioned traffic, he arrived at 2:30. The real problem: I had a teleconference at 3:00 that I wasn’t 100% prepared for [bad Ellie]. So when we met up at the new house and he did a drive by look through. He said he was too tired to give us any good feedback and the only things that he noticed were the things that we had already known were bad (the roof needed repairs, the furnace was old).
So, while it was reassuring that he didn’t find anything new, I would have preferred to have a more thorough “Dad inspection”.
[Note wire dangling on shelf: That wire was live!]
Question: Who would you want to inspect your house?
I think Bob Villa or any of the guys on This Old House would be my vote!
I feel like during the mortgage process I am learning more about myself and my husband than ever before.
Not in the sense of what could we handle in terms of stress or hidden traits that we are spontaneously sharing with each other, but all of our financial history. We have been rummaging through old tax forms, previous HUD-1 forms (proof that we sold our last house), and all of these other documents that we need to have emailed/faxed to our lender.
Note to future first time buyers: Make sure that you have access to the following to fax/email:
- Previous bank statement
- Proof of down payment (could be in the above bank statement)
- Last year’s W-2s
- Last two pay stubs (for both applicants if you’re married)
- HUD-1 (not applicable for first time buyers, but this is proof of sale of your previous home)
- Driver’s License
- Proof of Earnest Money being deposited at law firm (or with agent if you’re not doing for sale by owner)
- University Enrollment Verification (we got ours from our the national student clearing house through our university)
- An explanation of any new credit cards or credit checks (we had gotten mortgage quotes from 2 other lenders and they had run credit checks and this showed up on our lender’s credit check)
Question: Anything missing here?
Just a little advice to for sale by owner buyers:
We found that unless we tell Mr. & Mrs. Seller that we need a document back by a certain date, they take forever! You would think, that when dealing with adults this would not be the case. However, Mr. & Mrs. seller have been acting like children and need to have a timeline.
So, my recommendation to all of you out there purchasing a house for sale by owner is to give them timelines. Typically, this is something that your realtor will handle if you are going that route, but it doesn’t hurt to request a timeline from your realtor either.
I apologize for the extreme sarcasm, for I am obviously stressed about this whole process. I’m normally not this angry… I swear!
After trying to reason with Mr. and Mrs. Seller about how the contract did just exactly what they wanted it to: sell their house to us for our agreed upon price, we decided that we were going to have to get our hands on the new contract.
Our lawyer did not have the new updated version of the contract, so we decided it would be best to contact the seller’s lawyer and have him write up the contract [especially being that we had no problem with the original contract and their lawyer did]. We were able to get a hold of him the next day and he wrote it up right away [Remember: everyday that this point was really pushing us to close on the last day of our lease].
He typed up the contract; Mr. and Mrs. Seller signed it and forwarded it our way. We put in the closing date to by July 31st [the last day of our lease] because that was the earliest date our lender would give us. We were really hoping that that if everything went smoothly we could finish earlier.
Phew… at least we weren’t extending our lease.
Next step: Home inspection and appraisal.
Question: Any good home inspection stories? Our home inspector for our old house missed a lot, thank goodness Matt was there to point out some things or they would have been left our of the report.
Let me preface this blog entry with: we were in a time crunch to close on the house because our lease was up at the end of the next month [We were negotiating at the end June and our lease ended July 31]. Our lender had said that to get everything in order by that deadline would require everything to go smoothly, not to mention we wanted to close earlier. [We were stressed!]
So at this point we had come to an agreed price, but we needed to make it official. What that meant to the sellers is that we needed to have a contract drawn up by a lawyer. No big deal, right? Wrong!
The timing was awful; they wanted the offer ready by Monday-it was Friday! I was headed up to NYC for a conference and my father-in-law was coming into town for the weekend to go see the Phillies play with my husband. We scrambled (or I should say my husband did, I was not very available over the weekend) and got everything in order by noon on Monday.
Then we waited for them to simply sign and return the contract. Monday night: No response. Tick. Tock. Tick. Tock… Tuesday: No Response…
[Note Copyright]
Most of Wednesday had gone by before we heard from the sellers and they were not happy with the contract. Their reasoning was absurd [in my opinion]: The copyright for the contract that we presented to them was 2000. The document had since been updated.
We asked them how it was updated and what the problems were with this 2000 document. Their response: The new contracts are 8 pages long (instead of 6 which as far as I can tell is due to font size and formatting!) and instead of listing the appliances included, there is a check box for the appliances. This was their sticking point, they were not willing to go through with anything without that check box!!
[Check box from new contract=Must Have]
We were in a rush and this seemed so unnecessary! Our rental lease was up at the end of the month. The minimum of 2-3 weeks that our lenders needed to get the documents ready for closing was quickly approaching the end of the month as things were getting pushed later and later. And more importantly [to us and nobody else], we wanted to refinish the floor before we move in. I cannot imagine trying to refinish floors while we are living in the house… I think it might just be impossible.
Until we got the new contract, nothing was going to happen [as we know by now, Mr. and Mrs. Seller were not the type to get things done].
Question: Have you recently bought a house? Did it seem like you were going in circles with your sellers?
A couple of days after our offer was rejected [see last post for more on our initial offers], a few things changed with our plans. We were initially only planning on staying in the area for a year and had a max budget that we could spend on a house. Given the numbers, this max would allow us to at least break even when compared to renting and perhaps turn a profit if we found a fixer upper and got it for a good price.
So, a couple of things changed that allowed us to make this budget a little higher. My husband had a conversation with his boss and they decided that it would be best for him to stay for at least 2 years. 2 years meant that we would be saving on 2 years rent rather than 1 and gave us a larger budget to play with. I was very excited [of course this is not the only thing we were taking into account: we were also looking at the additional interest, taxes, insurance, etc. that we would have to pay].
We talked with our lender and figured out what we would be now willing to pay monthly for the house. And then we sat on the new number for a couple of days and discussed whether or not we thought we could sell “our future colonial” for more than this new amount in 2 years.
In the meantime we went looking at other houses in ‘our neighborhood’ and they were either in much worse shape or still out of our budget.
[Quite the kitchen! Yes, that is an oven above the range!]
So, we decided to go for it and made another offer on the house. This time it was 77% of the asking price. The owners sat on this offer for 4-5 days [we were getting very irritated with how long everything was taking with them at this point]. Then they countered!! Their offer was 87% of the asking price [wahoo! something that we can respond to, at this point they had just said no to all of our offers] We countered their counter with an offer of 82% of the listing price and we were at an agreement!
But don’t get too excited, the closing process was even more troublesome than coming to an agreement…
