About to be a homeowner…

April 15, 2014 at 1:20 AM (Uncategorized)

Listening to: Jus Jack – Stars

Well since the last time that I posted, quite a bit has happened so that should probably prove the speed at which the housing market can move. I think the very day after my second offer was rejected, my agent sent me listings and I kind of halfheartedly looked at them and didn’t respond for a while. They felt almost like rebound houses – like I wasn’t in the mood to be looking at anything new and investing myself again in the process of bidding for one. But then I felt guilty not responding to my agent without a good reason why, so I looked through the listings a little more carefully. There was only one I was interested in, but I wasn’t in the mood to schedule a viewing time so I delayed e-mailing her back again.

Finally after most of the workday had passed, I looked at the listings again and responded that I’d be interested in seeing it on Friday. She responded with “how about tomorrow at lunch?” and I went “ok.” Luckily Robyn had planned on staying in the South Bay on Tuesday so I told her I could pick her up and we’d set off to see the house really quickly during my lunch hour.

I ended up really liking the house and putting down an offer. I waited what felt like a long time before I submitted the offer – I think like a week and a half – on the last day you could submit one. I was really unsure about the offer price to make, because I really liked the place but it was in San Mateo and for some reason I felt weird bidding more on a house in San Mateo than one in Mountain View. I sent my agent an e-mail asking if $x sounded ok, and she pretty much sent me a very kindly worded e-mail that I interpreted as “this will be your third offer now, will you please open your goddamn eyes and make a higher offer. This house has everything you want and you only have one shot.”

So all the craziness of bidding ensued as I mentioned in the last post: not knowing how much to offer, putting down an offer and checking off on all the clauses in a contract and just hoping for the best, not knowing for what seems like an excruciating long period whether the seller will take it or not, and then hearing back.

The day after I put in my bid, I got a counter offer. That was another weird moment where my agent told me I’d be receiving a counter offer, but the listing agent hadn’t finalized the paper work yet so we didn’t know the terms. I basically sat and stared at my Estimated Costs spreadsheet I had created and kept telling myself “I can’t afford anymore than I offered. I really can’t. I’m just going to say no I can’t raise my offer.” And then the counter came back and I think both my agent and myself were all very surprised to find out that they were ok with my dollar amount! I signed off or renegotiated my counters and sent it back – then ensues another period of uncertainty because at this point the sellers could still drop my offer if they wanted.

A few hours later my agent called and goes “how does the sound of ‘Melissa, homeowner’ sound?” I responded with “oh god.” I immediately called my mom and her first question was “are you happy?” which I thought was a pretty perfect question. I said I was bugt in a robotic way. She sort of balked when I told her what I had offered, but this is a woman who has kept insisting that I should have offered a few thousand less than listing price, despite my many, many demonstrations of how everything I like goes for tens of thousands over listing.

At this point everything from two weeks ago is a massive blur or is probably uninteresting to other people. If I wrote this last Monday it would have been along the lines of “OH MYYYYY FUCKKKIINNNGGG GOOODDDDDDDD” But even by last Wednesday, everything has calmed down. Seriously this has been the craziest emotional roller coaster I’ve experienced. It is a lot of “MUST DO THIS NOW” and “MUST MAKE DECISIONS NOW” and then “omg do I regret this?!?!” and occasionally excitement. My coworker, probably noting how frenzied I looked one day, commented that it was probably harder to go through this process alone, whereas with a spouse they could bear some of the weight. Maybe, but part of me thinks I’m a control freak and would have wanted to handle everything and not have to consult on someone else’s opinion.

I think the best sign is that upon hearing I got the house, I felt really good about it. My agent warned me that after getting an accepted offer, it’s just a rollercoaster of major ups and downs. There were definitely moments of massive uncertainty, but thankfully, as time went on and processes got checked off, now I just feel better and better about it, which is a good position to be in.

The morning after I got my accepted offer, I woke up at 6am and just laid in bed in a panic. Like, a paralyzing panic where I just kept envisioning moving into the house, somehow losing my job, being unable to pay off my mortgage, and then ending up homeless. Half an hour later I finally brought myself to call my mom and asked if it was normal to panic and she was very comforting in giving me an “OF COURSE” answer. I’d say it took another three mornings before I stopped waking up and immediately panic upon waking.

While my escrow hasn’t closed yet, my loan is pretty much finalized and property inspections came out ok, so it is basically supposed to be smooth sailing from here. I feel lucky about it. If there were any major regrets I had in this process, I think it’d be signing off on the “as is” condition, which means you are offering to buy the property in the state that it is in when you made the offer. So you can’t go back to the seller to say “hey can you pay a portion of the repair costs.” When I made my offer, I just wanted it to be a super clean offer – but once I got the offer I realized how much exposure I had given myself to having to take on a  ton of repair costs. Very, very luckily, the inspectors I talked to basically gave the house a good sign-off, so it turned out well for me but I could easily see how it could have gone south. It’s crazy because I bet every buyer enters, thinking they want to have a contract that will best protect their interests. Every home buyer’s book is probably like “THIS IS IMPORTANT” and “make sure you sign this clause!” But in reality, at least in the Bay Area, after you bid on a few houses, you are just so desperate to get a house that you love that you pretty much sign away all your buyer’s rights.

But the thing is, until it closes and if the listing agent tells us why they chose my offer out of the rest, I really won’t know if going “as is” was a major determining factor in my winning the bid or not. It’s very Sliding Doors – WHAT IF I hadn’t done it? Maybe I wouldn’t have gotten it!

The reason my process went so smoothly was definitely very dependent on my agent and my lender. Interestingly, these were both two people who I had only met once before deciding to stick with them. I shopped around with lenders: BOA, Chase, and a local lender in the Bay Area recommended by my agent. I ended up going with BOA – I really don’t know why, other than that maybe it was the first lender I had met with, all my funds are held at BOA, and my agent would tell me that she really liked the BOA person. Chase probably would have been a cheaper interest rate but their process seemed much slower than even BOA so I didn’t trust them to give me a fast close. The local firm had a higher interest rate, with the trade off that they’d give you a faster close. But the stingy side of me just couldn’t commit to taking on a loan with a higher interest rate that I knew I could have gotten cheaper elsewhere. I’m glad I stuck to this, because there is definitely pressure to just cave in and go with a faster close and get it done. But I knew if I did that, every month I’d pay off my P&I and regret the extra money I was paying in interest.

In the end, my BOA lender worked so insanely hard (I am not joking – I am talking phone calls with me till 1am and e-mails being sent to me at like 4am, 5am, midnight, all hours of the day) that she closed it in six days, technically four since I don’t think she did anything on the weekend. Which is kind of insane, especially for such a huge financial institution like BOA.

SO MY TIPS HERE ARE:
1) Keep your options open for lenders (ie. go out and get pre-approvals with a variety and just keep the connection alive and send updated docs as needed despite how annoying it feels). But in the end, really figure out who you want to go with because when it’s time to make an offer, you have to choose pretty much then and there

2) No matter how many documents you gave your lender pre-offer, they will be asking for SO MUCH MORE. I started to get really frustrated, because I HATE getting calls when I’m at work and for a few days I couldn’t work an hour straight without having to do something. I complained to my mom that this should have all been done beforehand, but she pointed out that everyone talks to a number of lenders but will only end up going with one. So it’s just not efficient to finalize everyone’s file before they even commit to using the lender. Which I agree with and I guess you can’t fault someone for looking out for you and trying to help you get a loan.

3) The little surprise decision I had to make and did not know about beforehand was HOME INSURANCE. It felt very much like I just wanted all the decisions to be over, and out of the blue the underwriter was like “your file is almost complete! But you will have to choose home insurance before we finalize it!” To me, someone who has never paid for insurance, this felt like a very daunting task. I called five different companies for quotes, and then called most of them multiple times to adjust the quotes for different coverages. Then you have to figure out what type of coverage you want and the amounts. It’s definitely a process and I think everyone tries to say “don’t worry you can change it afterwards” but I would say that it’ll be a lot less stressful if you start looking into quotes or companies beforehand. HINT: I think Costco is the best.

4) If you are lucky enough to be getting gift funds from someone, move it over sooner rather than later. My mom gifted me a part of my downpayment, but neither of us really wanted to move it over to my account, plus there was no house in sight so it didn’t seem imperative. BUT the thing is, by the time you find a house, it’s too late to start moving funds. The lender won’t want you to move it just yet, but instead you have to do a TON more documentation proving that both parties have stable balances and all this other stuff. It created all this extra communication and interaction between more and more parties that could have been avoided if you just GIFT. EARLY.

5) For me, it is a REALLY weird feeling to hand over your 3% deposit check. Typically you put down 3% until close of escrow when you put down the rest of your downpayment. Now I don’t know about everyone else, but I do not often write checks to people over my rent amount. So handing over a check (on a spongebob squarepants stock paper) for thousands of dollars was a VERY weird feeling. I like what the lady at the title company said when I commented on how odd it felt: “just wait until you write the next one.”

Since my offer was accepted late Wednesday, my contingencies started Thursday. Thursday and Friday were the absolute most stressful two days of my life. Coordinating inspections, listening to inspectors feedback, deciding exactly what inspections you wanted to do, reacting to the findings in each report… IT. IS. STRESSFUL. There are a lot of what ifs in every decision – but by Friday end of day (two days after accepted offer), I felt like I was comfortable with what I had heard and what I had done, and it ended up being a great thing that I already had a Sonoma weekend trip planned, because it kept my mind off the house. Since then, slowly things just sort of fell into place.

It’s now this weird period where I day dream about how to furnish the house but I can’t buy anything yet. I don’t even have to pack yet because I really don’t have that much stuff that would require packing so early. It’s just … a weird waiting period where I can’t do anything but I know a big change is about to come.

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