House Buying Top to Bottom

Today is the official Move Day! We closed on the house on the 6th, but today is the day all our friends are helping us move our stuff, our kitty and we start sleeping here. Andy and I have spent the last few weeks reminiscing about our apartment. It is a great apartment and we have had a LOT of good memories here. We’re both obviously excited about the house and all the potential that brings, but the apartment was good to us and we don’t want to diminish that.

I thought I’d try and summarize our house-buying process for y’all since I’ve been asked about what it was like and what to expect. I learned a lot along the way that I didn’t know about. Fortunately, our real estate agent, Sarah, was fabulous and gave us help every step of the way and answered all our questions, both big and small.

Part 1: Get the Financing

Our first step was to secure financing. We went to our bank and met with a loan officer (they still exist!). He walked us through the whole process and I walked away with 3 full pages of notes and a need for a cocktail. I settled for froyo.

We had to fill out an application online that asked a lot of questions, our income, our debt, where we worked. The last part was hard to answer since Andy and I both can work for between 3 and 12 employers a year. It took us the better part of a week to fill out the applications and get it all figured out.

Another commonly asked question is how Andy and I got a loan when we’re not married. These are actually that most common kinds of property loans since friends and business partners buy properties together all the time and are unmarried; houses, apartment buildings, strip malls, etc. We were not co-borrowers, but filled out our own separate applications that were analyzed together.

Part 2: Get the Agent

While our loan was being processed by our bank, we met with Sarah for the first time. She walked us through the process, which involved even more steps than I remembered from our bank meeting. She was wary about trying to find us a house in our price range so we did some math and were comfortable raising our limit. She suggested we get in touch with her lender just to compare the two loans.

Funny thing is, her lender asked for the same information, but did all the leg work for us. She ended up quoting us a great rate, laid out a bunch of scenarios for us, was available for almost daily calls and made the process super easy. We were shocked to end up going with her, but the math all made sense. And this is the shocking part we have never heard from our bank. After we submitted our loans, we never heard anything ever again. Weird, right?

Part 3: Get the House

We went out on a Monday a few weeks after our meeting with Sarah. She had been sending us listings for the two weeks since we met her and saw two properties we loved come and go. On our scheduled day to go looking, we had 5 houses on the list. Here’s the post on how that went. We ended up with our house, totally in love and wanting to make the offer.

Ok, here’s the parts I didn’t know about. We met the morning after to sign papers that made the offer official, which included writing a large check for something called Earnest Money. This is exactly what it sounds like. It’s a way to show the sellers that we were serious about their property. If we offered a paltry amount, they could decide we weren’t serious and not accept our offer. So Sarah suggested 3-4% of the house price, which eventually is counted towards our closing costs (more about that in a second).

We waited for a day, got our counter offer, which starts the clock of getting the inspection done, which we did, sent another offer asking for certain things to be done and to get them to pay some of our closing costs to cover other repair costs. This is also when we started looking for home owner’s insurance, which is called hazard insurance on all the paperwork, even though colloquially we call it home owner’s insurance. Whatever.

Closing costs include several things: the down payment, the cost of running a credit check, a fee to the escrow company for holding our money, a prepayment of taxes and home insurance, a loan origination fee (which is what it costs for the bank to write the loan, literally the paper and man hours), and an underwriting fee. The underwriting fee is the cost for the bank to ask their actuary if we are a good bet on loaning money or not.

Part 4: Get some patience, cuz you gonna wait

Once the inspection was done and we sent our request after the inspection, we got back their offer and then waited until closing. Sarah and Andy went over to the house at one point to check on progress.

A few days before closing, Andy and I went to the escrow company to sign the loan documents. An escrow company is an impartial 3rd party that holds your money and the contract so instead of having you deal directly with the bank, this company can manage all the paperwork for them. They also hold the portion of your mortgage payment that is your property taxes and your homeowner’s insurance. Then every 6 months the county withdraws the taxes and your insurance company withdraws the premiums.

Then we waited on closing day for the word that the deed had been transferred to us and recorded at the County Courthouse as ours and we could enter the house.

And that’s it! There were a few more documents that Sarah had access to that I honestly can’t remember what they were, but they weren’t super relevant to the process, otherwise I would’ve remembered them!

And now we’re in and in love and gonna make this house a home.

I think I just threw up in my mouth a little.

Let me know if you have questions! Or bought a house yourself and had an amendment to my process.

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