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Your first house

Posted by Bruce M on December 26th, 1997 10:41 PM
In reply to Final Walk-Through (First-Time Homebuyers) by Jo Mark on December 26th, 1997 08:34 PM [Go to top of thread]

Hi Jo Mark:
Congratulations on your first house. This is an important occasion, and you are wise to ask for assistance.

Because you are anticipating closing within a month or so, I take it you have placed an 'earnest money' deposit on your offer to buy the house and the seller has accepted. So lets start from there.

Personally, I don't have much faith in buyer-agents. Yes, for the inexperienced, they may be better than nothing when you have no other help, but you, as the buyers, must keep a watchful eye, as normally, the BA also receives part of the commission at closing. To me this represents a conflict of interest.....but not much you can do about that now.

Although you should have done this before the offer, I don't think it is too late to retain a licensed contractor to do a walk though assessment of the house to determine what repairs or systems (such as heating/air conditioning) are near the end of their useful lives. A good contractor can also give you a good idea on the value of the house and if it is a good candidate for future improvements. Such items as the foundation, structural integrity, condition of the roof, the electrical service, plumbing fixtures and all those other vital systems that most people not in the construction industry will not see in typical walk-throughs. He can also give you pointers for or even accompany you on your final walk through. When the real estate people know you will be doing this, they tend to be a little more attentive to you.

Please understand, I don't mean to say all RE agents are crooks....just that their incentive is to get the sale to closure, as then, and only then do they get paid (with the exception of the money you have paid to the BA).

At closing, lenders (or lender brokers) and title companies are not above sticking extra costs into the closing statement. The lender is required to give you a good faith estimate on closing costs within a few days of your application for the loan. "Loan documents preparation", "lender service fee", "express mail fee", "credit report"....these are a few of the places they like to pad costs...i.e., charge you extra....that can mount up to several hundred dollars. The best way I have found to approach this is to get the written good-faith estimate and go to other lenders and ask them if they can beat the estimated prices...if you haven't yet paid the up-front loan fee. If you have paid the fee, get the estimate and call other local lenders and ask if they charge the equivalent. If not, renegotiate with your lender and if necessary, threaten to go elsewhere. I have been down this road 5 times now, and I have found it is definitely in your best interest to play "hard-ball" with all intermediaries. Prior to closing, demand to get a copy of the final closing statement so you will have time to look over all charges. I can almost guarentee there will be charges in it that were not agreed upon beforehand, and you will need time to work them. Remember, unless you retain a RE atorney, the only ones sitting at the closing table with your interests at heart will be YOU. The pressure on you at that point to sign what ever is put before you will be intense. So try to get all potential problems worked out prior to closing.

Very best wishes on your first house.

Bruce M

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