Mortgage Preapproval?

[TheBonk]

So, just an update - my wife and I are officially preapproved, letter in hand. We just gave them a high number that we would spend and they approved that no problem; we weren't interested in just seeing what the max approval would be since we knew we'd never spend more than X.

The interest rate is based on my wife's credit since hers is lower than mine since she's from Japan and only has three years of credit history here in the US, but we were still able to get the second lowest rate they offer which is pretty good, and only a quarter point off from the lowest rate, which I qualified for (I wouldn't have qualified for the amount we wanted on my own income, I was just short on DTI but I'd rather have her on the mortgage anyway of course). But in actuality she's only 20 points short of the top tier cutoff, so she may be able to get it there before we actually take the loan and still get the lowest possible rate. All in all, can't complain at all.

Now, my wife has a realtor recommendation from a client of hers - are there any specific questions we should be asking of him in terms of fees, etc.? I know he gets his commission from the seller, but curious what other fees he might be throwing in at closing (though we are still going to make an offer based on the seller paying closing costs) or anything we should be aware of with the real estate agent?

The realtor will have you sign a buyer agency agreement prior to representing you. Go through that as well as ask them questions about it. Some realtors charge a contract/brokerage fee of a few hundred dollars, you can ask them to remove this if you don't feel the need to pay that. Occasionally a realtor will stipulate in the agreement that he needs to get a certain commission (3%, for example), and if the selling agent of the home you purchase pays the buying agent 2%, then you're on the hook for the remaining 1%. There may also be a retainer fee that may or may not be returned to you after the purchase.

All in all, if there are any additional fees charged by the realtor, negotiate them down or ask for them to be waived. Ideally, you don't want to be paying your realtor anything as the buyer. If the realtor doesn't agree to this, there are plenty of other realtors that will represent you for only the commission they receive from the selling agent.

 

[puma1552]

Thanks,

We met with our realtor tonight and he confirmed the only fees are his commission which comes from the seller, and a $395 admin fee that gets rolled into closing costs, which we are planning to have the seller pay so he said we shouldn't pay anything out of pocket to him, it should all come from the seller's side, assuming the seller pays closing costs.

 

[puma1552]

So just an update, been a crazy 24 hours. A house popped up last week and we went to look at it last night, and immediately said we'd take it. Made an offer this morning, and it was accepted an hour ago. It was actually the only house we ever set foot in, after looking at probably literally a couple thousand online the last year and driving through countless neighborhoods just scoping out neighborhoods of houses that we liked to see if the rest of the neighborhood was nice or not. When this one popped up, we knew, and when we looked in person, then we really knew - it had some easter eggs that weren't mentioned in the ad, mainly a shed, a vegetable garden for my wife, and the biggest thing of all - an insulated and heated garage, crazy that wasn't in the ad.

So we close in a little under 60 days and then it's ours, w00t.

 

[D.T.]

Nice! Sweet deck and yard too (looks like a good place for some BBQ'ing)

Where is that? Not like a specific address, just wondering the state and general vicinity[?]

 

[puma1552]

Thanks, twin cities suburbs. Might see if I can't squeeze a Bendpak 4 post lift into the garage for my toys, heh heh...ceiling in the garage is actually quite high, I'll have to take a closer look but I think it might actually fit (would obviously need a different garage door that rolls up or at least different tracks that pull it up to the top of the ceiling)

 

[Timmeh8604]

Lots of great info, as I'm looking to be a first time buyer as well. It's very scary for me to start the process as it's much different than buying a new car lol. Definitely am following this for more info.

 

[senseless]

So you weren't kidding! Report back comparing apartment life to being a homeowner.

 

[sdilley14]

Nice, looks great! Congrats!

What was the accepted offer price, if you don't mind me asking? I'm just curious to see what real estate like that is selling for in that area.

Edit: That kitchen is just primed for a backsplash like the small one they have above the sink in the laundry room.

 

[puma1552]

Nice, looks great! Congrats!

What was the accepted offer price, if you don't mind me asking? I'm just curious to see what real estate like that is selling for in that area.

Edit: That kitchen is just primed for a backsplash like the small one they have above the sink in the laundry room.

Sure, I don't mind sharing since you're from neighboring Wisconsin.

The list price was actually $239k, but did not include the washer and dryer which are very new and about $1k each (fancy LG smart ones or whatever, seller was using these as a negotiation tool I suppose, our realtor mentioned a lot of new homes don't include them now and suspects the new home they bought doesn't have them). So we offered $240k to include the washer and dryer, with the seller paying closing costs.

They countered with $245k, include washer and dryer, and they will pay closing costs. We just decided to take it, our agent expects the house to appraise higher than that and given the really nice neighborhood (most houses are maintained similarly), exceptional schools, quality of upgrades (house was not a flip, the upgrades have been done over a period of ~3-5 years), she still thinks the house is a steal at $245k, especially since lots of the surrounding houses are in the $250k-$280k range, with a couple at the $300k mark. The house was only on the market since last Thursday and had had numerous showings already, which worked to the sellers advantage. We were the first to put in an offer, and according to the selling agent (could be BS), there was another offer to be coming in the following morning but if we accepted the counteroffer it would be ours and they wouldn't consider the other offer. Our agent was worried that if that were true then there would most likely be a bidding war, which we all wanted to avoid.

Rates are still low, but coming out of winter here and with the economy improving, it's starting to become a seller's market again for the first time in a long time and the nice houses only last days on the market before they are gone. I know someone who just sold their house and got $12k above list price due to bidding wars.

So all in all, we are happy and the quality of the upgrades makes the house worth it.

Just to have a new roof, new siding, new driveway, heated garage, new patio, 4 new windows, etc., really takes the stress off since moving in, all of the big stuff is done and we hopefully just need to maintain.

 

[sdilley14]

Sure, I don't mind sharing since you're from neighboring Wisconsin.

The list price was actually $239k, but did not include the washer and dryer which are very new and about $1k each (fancy LG smart ones or whatever, seller was using these as a negotiation tool I suppose, our realtor mentioned a lot of new homes don't include them now and suspects the new home they bought doesn't have them). So we offered $240k to include the washer and dryer, with the seller paying closing costs.

They countered with $245k, include washer and dryer, and they will pay closing costs. We just decided to take it, our agent expects the house to appraise higher than that and given the really nice neighborhood (most houses are maintained similarly), exceptional schools, quality of upgrades (house was not a flip, the upgrades have been done over a period of ~3-5 years), she still thinks the house is a steal at $245k, especially since lots of the surrounding houses are in the $250k-$280k range, with a couple at the $300k mark. The house was only on the market since last Thursday and had had numerous showings already, which worked to the sellers advantage. We were the first to put in an offer, and according to the selling agent (could be BS), there was another offer to be coming in the following morning but if we accepted the counteroffer it would be ours and they wouldn't consider the other offer. Our agent was worried that if that were true then there would most likely be a bidding war, which we all wanted to avoid.

Rates are still low, but coming out of winter here and with the economy improving, it's starting to become a seller's market again for the first time in a long time and the nice houses only last days on the market before they are gone. I know someone who just sold their house and got $12k above list price due to bidding wars.

So all in all, we are happy and the quality of the upgrades makes the house worth it.

Just to have a new roof, new siding, new driveway, heated garage, new patio, 4 new windows, etc., really takes the stress off since moving in, all of the big stuff is done and we hopefully just need to maintain.

Nice! Sounds like a good deal. Congrats!

 

[puma1552]

So, things are movign right along, have the inspection scheduled for Monday.

Should I be having the inspector do a radon test at the same time? I know I can get my own kit, wait a few days, then send it to a lab but word on the street is those aren't reliable, plus I don't own the home so can't waltz in and out at my leisure to do the test, but I would want it done before closing so we could negotiate the seller paying for to fix it if the levels are too high. I understand inspectors can potentially test within an hour, and it's more accurate; and presumably if done by the inspector the results will be much less likely to be contested by the seller.

Thoughts on doing a radon test?

 

[yg17]

So, things are movign right along, have the inspection scheduled for Monday.

Should I be having the inspector do a radon test at the same time? I know I can get my own kit, wait a few days, then send it to a lab but word on the street is those aren't reliable, plus I don't own the home so can't waltz in and out at my leisure to do the test, but I would want it done before closing so we could negotiate the seller paying for to fix it if the levels are too high. I understand inspectors can potentially test within an hour, and it's more accurate; and presumably if done by the inspector the results will be much less likely to be contested by the seller.

Thoughts on doing a radon test?

I had my inspector do the radon test. I don't remember how much it cost but pretty sure it was under $100. With all the other crap you're going to be doing over the next few weeks before closing, it seemed worth it to let someone else deal with the radon test.

Plus, like you said, you can't just walk in there and do the test yourself.

 

[puma1552]

I had my inspector do the radon test. I don't remember how much it cost but pretty sure it was under $100. With all the other crap you're going to be doing over the next few weeks before closing, it seemed worth it to let someone else deal with the radon test.

Plus, like you said, you can't just walk in there and do the test yourself.

Thanks, was that something he was able to do in one fell swoop while doing the inspection, or was it the kind of thing where he had to set out cannisters in the house and wait 2-3 days, then go back and send them into a lab for results, etc.?

Basically was the testing all completed with results in hand by the time the inspection was done that same day?

 

[yg17]

Thanks, was that something he was able to do in one fell swoop while doing the inspection, or was it the kind of thing where he had to set out cannisters in the house and wait 2-3 days, then go back and send them into a lab for results, etc.?

Basically was the testing all completed with results in hand by the time the inspection was done that same day?

He had an electronic tester that had to sit in the basement for 24 hours, so he went back the day after the inspection and e-mailed me the results complete with some fancy graphs and numbers that it probably takes a scientist to understand, but the report ultimately said it passed.

IIRC, he said normally he tries to put the tester in the house 24 hours before the inspection so he could give the results to the buyer at the inspection, but some kind of conflict or access issue prevented him from doing that with me.

 

[puma1552]

Sounds good, thanks; I told my realtor I wanted to do the radon test and she said he can do that, but the results won't be ready until Wednesday which is no biggie I guess (inspection is Monday).

 

[puma1552]

Couple updates -

Inspection went pretty well, nothing major. Probably 15-20 small things, some of which were just things that the seller had done DIY and therefore didn't have permits to do and weren't quite up to code. We requested the seller do 10-11 things, and they came back and said they would do all of those except two, and the two they aren't doing are just installing a fresh air intake on the house and cleaning the fireplace. They will be doing something where they have a contractor there for something else related to ventilation, so our agent is going to see if that guy can also install the fresh air intake while he's there and we will just pay for that part. So all of that is good.

However, I just got the radon results. Mitigation system installation is recommended if the level is 2-4 picocuries/liter, and pretty much a necessity above 4. Ours averaged 8.1, with a peak of 15.4. And that's with the furnace off. Agent is requesting seller install a mitigation system.

VERY glad we did the test. Looks like a test should be done every 2-5 years. So if you are buying a home, just spend the little extra money to have the home tested, it's cheap insurance. I could've tested the home after I bought it for about $10, but then I'd be on the hook for the entire fix. By paying the inspector $200 to do it, I can now negotiate the installation of the system (hopefully the seller pays for it entirely, I think they should).

 

[puma1552]

Just a final update - we closed on Friday and everything went well. Closing only took about 45 minutes. Seller did everything they agreed to do, and did a fantastic job with the radon system - there is no visible ugly PVC pipe on the outside of the house - they sucked the radon from the crawl space, through the wall into the utility room behind the furnace, and then it goes up through the second floor and is never seen in any closet or anything, and pops out of the roof in a black roof vent that just looks like any other roof vent.

We've been pretty busy basically doing spring cleaning around the yard, and I'm in the process of dismantling the playsets. Had the locks rekeyed right away too.

We also are looking at having the popcorn ceilings removed throughout the house before we move in (got a quote already). Also for whatever reason the stairwell into the lower level and the lower level family room have a texture on the walls (only place in the whole house, rest of house has smooth walls), so also going to have the walls professionally skim coated to a level 5 smoothness to match the soon to be popcorn devoid ceiling and rest of the house.

So far, enjoying being a homeowner even though we will not be moving in until closer to the end of June, when our lease is up and when the remodeling we are doing is done or nearly done.