Welcome to the series of posts helping introverts with buying a home, selling a home or investing in real estate. I tend to be an introvert more than an extrovert so I thought it would be appropriate to give some advice on how introverts can succeed in real estate. My last post was on Three Things Introverts Need to Know About Home Inspections. For all the posts, go here.
You are in the final steps of the process to buy your house. You have gotten through the home inspection and repair amendment out of the way. You next steps will involve a lot of waiting as your lender does their due diligence on your loan to make sure you truly qualify for the loan. In fact, waiting should be all you do. I tell buyers that they need to go on a spending vacation when waiting for their loan approval. Here are ten rules all buyers should follow before moving into a new home.
1. Do not charge anything
2. Do not change jobs
3. Do not transfer large sums of money from one account to another
4. Do not make a large deposit into your checking account
5. Do not buy a new car (or any other large financed purchase)
6. Do not close and/or open any credit card accounts?
7. Do respond to lender requests as quickly as possible
8. Don’t try to consolidate your debt
9. Do pay off all Tax Liens, judgments and/or collections
10. Do pay all your bills on time.
For more information on these rules, be sure to check out my post about it here.
There are some other things that will be happening before you actually be moving into a new home, which are the same for extroverts and introverts. Here are three of the main ones.
1. Getting an appraisal of the home – One of the first things that should happen soon after the option period is that the lender will ask an appraiser to go look over the property and give a value for it. If you are getting a government backed loan (aka FHA, VA or USDA), the appraiser will look at minimal quality standards as well as value. The government wants to be sure that homes that they back are safe and do not require a lot of updates and repairs. If you are getting a conventional loan, the appraiser will do a more preliminary look at condition as most lenders only require homes to be structural sound to approve them for a loan. What happens if the lender is told work needs to be done to the property? The seller will then be required to make the lender required repairs in order for the home to qualify for the government backed mortgage. If the seller refuses to do this, the buyer will can get their earnest funds back due the house not being approved by the lender. What happens if the value is less than the agreed upon sales price? In cases like this, the buyers and sellers must come to terms on how to make up the difference. The buyer can put some more cash down to make up the difference. Sellers can lower the sales price. You also see some buyer and sellers meet in the middle with the sales price drop being half the difference and the buyers putting half the difference down in cash. Of course, there are many different flavors of these three options, but generally this is where the negotiation starts when the appraisal doesn’t meet sales price. Since appraisals are a subjective process, it does happen that the value is different than the sales price. You want to be sure to speak to your realtor about how you want to approach this situation before it happens.
2. Doing a Final Walk Through – When the lenders have called for a clear to close on the loan, it is time for the buyer to do a final walk through of the property. These final walk through serve two purposes. First, you want to walk the house to make sure the repairs done on the property by the seller were done correctly and are sustainable. If they are not, the buyers can protest and have the sellers redo the repairs the correct way. During the final walk through, you also want to ensure the property is in the same condition as when it when it went under contract. Specifically, you want the property’s structure to be in the same condition. For example, Texas has it share of hail storms. When this happens to a house under contract, the seller is supposed to repair the roof to its previous condition. It is the responsibility of the buyer and buyer’s agent to spot these repairs during the walk through and bring it to the attention of the listing agent and seller. Many buyers also take the final walk through to do some measurements for furniture and start to plan how to set up their house on moving day. You can often see extended family members also coming along during the final walk through to see the new house.
3. Closing on the property – The final act in buying a house is closing or signing the paperwork for the loan and transfer of the deed. As a buyer, you will be signing quite a bit so be prepared to have you hand cramp up. You will need to bring two forms of ID with you to the closing. You also have to bring with you payment owed in the form of cashier’s check (you can never bring personal checks or cash!). You do have the option of wiring the funds to the title company. Closings will take place at the title company most of the time. For introverts, you also have an option of paying for a remote closing where a notary will meet you at your home or a public location for you to sign the paperwork. These remote closings work well for people who have busy work schedules as they can happen outside of normal business hours. Be forewarned, however, that if you select a public location that you want to pick a quiet place to do the signing. If you pick a loud location with a lot of distractions, mistakes are more prone to happen. If you do decide to close at the title company, be prepared for the date and times to change if there are any delays in approving your loan, or something is discovered during the final walk through. It is best to let your employer know that the closing could change at the last second. In this way, hopefully the employer will be more flexible when the time comes to change the closing date and time.