What was it like to buy your house?

[prntrfxr]

I am in the process of getting a house (my first). (I'm under contract.) It occupies nearly all my waking thoughts and so when I saw the post about the "view outside your door", I wondered what it might be like in other places to go through the process of getting a house. Below I've listed some of my experiences. What was it like when you had to buy your house?

In the US we:

1. Get a real estate agent
2. Get a mortgage lender
3. This involves getting pre-qualified (involves a credit check)
4. Get pre-approved [which involves giving over copies of our W2's (tax deduction/wage info from our employers by which we either pay taxes at the end of the year or receive a refund) and providing completed tax forms for the past few years, record of all assets including retirement funds, last 3 paycheck stubs, and the last 2 bank statements. They also want all the places you've lived for the past few years and where you've worked. A list of all major expenses. In short, everything but your blood type.]
5. Search for a house. An endless number of houses, most of which are in such bad shape you'll wonder if you'll find anything or you'll see so many good ones you have to make up your mind which one. None of them will meet your needs exactly so there will be some adjustment
6. Make an offer (involves signing a contract)
7. Get told the house is under contract with someone else, end up looking again (repeat this process several times and this is process is an upper and then a downer when you can't get the one you liked)
8. Finally get a counter offer from the seller's agent
9. Make a counter counter offer or accepting the offer (signing more contracts again)
10. You should get an inspector onsite to inspect the property at this time. Oh and you only have a finite time to do this and it is at your expense)
11. You have to make your good faith funds available (down payment) which has to be done via cashier's check and sent certified mail
12. Sign the mortgage papers (I'm purchasing a previously foreclosed house so the seller is the government, which means twice the paperwork.)
13. Your mortgage lender has to request copies of your W2's and tax forms from the government just in case you've falsified the ones you gave them, they have to verify your employment and just about everything else you've told them
14. You have to wait until your lender asks for the title (If there is a lien on the property, there are things to go through there to clear the title. Fortunately, I didn't have this problem.)
15. After receiving the title your mortgage company has an assessment done on the property (If the value is lower than what they're selling it for, they contact the seller and inform them that they are not granting a loan for lower than it's worth. The seller has the option to comply and lower the price or not. If they do not, yours truly will have to pay the difference at closing. If I do not, then we start looking for a house all over again. I'm still waiting on this part.)
16. After that we go to close (which has to be scheduled)
17. At closing we have to bring our portion of the closing money. The seller usually pays 3% of closing costs. Closing costs are basically a chain of people lined up to take your money (your agent gets paid, your lender gets paid, seller's agent gets paid, seller's bank gets their cut, the people processing the close get paid and the government gets their cut). After you pay these people, some of them basically get back in the line to get paid again. This is the fun part.
18. Then you actually get to sign the final papers and they give you the keys. I'm hoping I will actually get to this part. Even though I was told to wear a brace on my hand so that I will be able to sign the 3 - 5 inch stack of papers.

Then the real work begins of cleaning the house, making needed repairs, painting, and moving.

Please let me know if I have left out anything. In my parents day, you went to the seller and said I'd like to buy your house. You had your down payment, you went down to the bank with all your info, and by the end of the day you had your loan. You presented the seller with the money, signed papers to transfer ownership, and the seller handed you the keys. In my grandparents time, you paid them for the house in full or made an agreement with the seller for payment, by word of mouth and with a handshake. Now, the lawyers have gotten their hands in everything. Yes, there is a certain amount of safety in it, but trust me when I say this, the bank never loses. I think the dealing with the death of my grandmother was less stressful. On the upside, all communication has been electronically. Although, I just about have a nervous breakdown when I get any emails pertaining to the house, because the news can just as well be bad as good. It has been a ...fun... roller coaster ride of emotions so far.

So enough about my experiences, tell me some of yours.

[Ollie1981]

Here in the U.K as a first time buyer it was more like....

1/ Speak to several mortgage lenders first to see how much myself and my better half could borrow based upon our annual earnings, get them to cut all the sales crap (they get commission on how much they manage to lend you) and tell you how much a month it will cost you based upon the current interest rates and how much a month it might potentially be when interest rates inevitably go up. This, along with whatever you've saved for a deposit, is your budget. In our case all told it came to around £100,000. In U.K real estate terms, this isn't very much. The days of 100% mortgages are over, we got an 80% mortgage on a house valued at £100,000 so the total borrowed was £80,000.

2/ Now you've got your budget, go to the estate agents house hunting (these guys are the U.K equivalent of Realtors, they usually have shops in most towns and cities, they are paid by the seller to advertise the house and handle inquiries) .... find out very soon that £100,000 gets you either.

*A good house in the kind of location where you'd get burgled/mugged/murdered on a regular basis
*A house that's virtually condemned in a not so bad area. A fixer upper (this was my house).
*A really small flat/apartment in a good area

3/ Find a house that you like (or at least ticks most of the boxes) and tell the estate agent you wish to make an offer and how much you wish to offer (you don't have to offer the full asking price, but like anything it's a bidding war against whoever else is interested)

4/ If they refuse your offer, either offer more money or go back to step 2

5/ If they accept, you need to commission a surveyor to give you a report of the structural state of the property (this is almost always a requirement of your mortgage and must be done at your own expense) you now also need a solicitor (lawyer) who handles conveyancing (the legal crap to do with property laws over here). You go to him/her with your mortgage offer from the bank, he/her will thrash out the legal crap with the seller's lawyer, he will also advise you of anything else he's found against the property when he runs searches through the council and the land registry (mostly any houses that have been marked as possible candidates for "compulsory purchase", if the government wants to build a road or railway line and it passes through your house, they force you to sell)

6/ You sign the contract all drawn up in legalese by your lawyer, the seller does the same with theirs and you "exchange contracts", the house is now legally yours and you receive the keys. You have to pay stamp duty to the government (this has changed a couple of times since I bought my house, but mine was a fixed amount of £1000) and tie up all the usual loose ends.

[michaelc]

The worst part is the solicitors. They insist on sending everyting in the post 'last' class i think. It seems to take a lifetime for them to get the paper work done. We were lucky getting our house as there was no chain but the house was a fixer upper to say the least. Money doesnt get you much in this housing market over here in england.

Get the best survey/inspection you can afford though. Our guy was great and picked holes in everything so we got some £££s knocked off the price.

[fixthecopier]

My ex wife made me sell the house so she could take her half of the money and go on a honeymoon with her coworker. Now I live in a van down by the river.

[blackcat4866]

My ex wife made me sell the house so she could take her half of the money and go on a honeymoon with her coworker. Now I live in a van down by the river.

No mortgage payments? Nice ...

I paid off once (it was my 40th birthday present to myself). Then added 750 square feet. That will pay off in 3 years. Then no more mortgages.

Congratulations on your house, prntrfxr. You deserve it. =^..^=

[fixthecopier]

Hey prntrfxr, I noticed your location has changed. Moved back to Maine?

[prntrfxr]

Hey prntrfxr, I noticed your location has changed. Moved back to Maine?

Thanks FTC, I didn't notice that. I changed some things in my profile and the question it asks is "Where are you from?" The answer to that question is Maine, but that is not where I currently live.

It sounds like it's not a picnic in England, either. I had my real estate agent first. She's a friend I've known for at least 15 years. The mortgage lender (not a broker so there is no additional fee since I'm dealing directly with the lender) was her choice, but he was good. Both of them answered any question I had and really explained things to me. Since this is my first house, it was comforting. The inspector was also her choice and he was really good too. If it wasn't for them, I don't know if I would have been able to do this and come out as well as I did.

The government has a program called Homepath, that offers down payment assistance or enables you to add renovation funds into the loan. I thought that would be the way to go. My mortgage lender pointed out that when you use that type of mortgage and say you decide in 5 years to sell your house, the government would get 50% of the proceeds of your house. So let's say you bought a house for $70,000 and you paid $30,000 on it. You sell the house for $70,000 and your proceeds would be $30,000, but you would only get $15,000 because Homepath would take the rest. I decided to go with an FHA mortgage instead, so he kept me from making that mistake. I got a really good deal on my house because it was a foreclosure and because of the economy right now. The bank is just happy they will no longer be responsible for it. It was at one time valued at $140,000, but because of the housing market the value has gone down to $65,000. I'm getting it for $59,000.

The house has hardwood floors in the living room and foyer. It has a fireplace with a gas starter, French doors that open on a good sized deck, and the previous owner had closed in the garage and made a wonderful den with built in cabinets. Nice big back yard. There is some work that needs to be done. There are too many trees close to the house and the tree roots have done some damage. I need to probably replace the heating system soon. But the AC unit is new and the roof is less than a couple of years old. I also need to do landscaping (all shrubbery in the front will be replaced), but that can wait until spring. Other than that is just a unpretentious house in a good neighborhood (many nationalities and backgrounds like I like it) and that's fine with me, since I'm not pretentious or flashy.

[Ollie1981]

The worst part is the solicitors. They insist on sending everyting in the post 'last' class i think. It seems to take a lifetime for them to get the paper work done. We were lucky getting our house as there was no chain but the house was a fixer upper to say the least. Money doesnt get you much in this housing market over here in england.

Get the best survey/inspection you can afford though. Our guy was great and picked holes in everything so we got some £££s knocked off the price.

I'll second the survey, get as thorough a survey as the guy offers, as if you really like the house an investment of a few hundred notes means extra piece of mind if nothing is wrong and/or a much stronger bargaining position in getting the seller to shave off a few grand for work that needs doing.

Ha ha I know all about fixer uppers. Since buying my house I've had to learn how to plumb in a bathroom suite (got wet a fair few times until I'd got the knack of compression fittings), lay floor and wall tiles, replastering (well how to fix up some plasterboard and skim coat it), re-point brickwork, lay a driveway, hang wallpaper and repaint a room several times until my missus was FINALLY happy with the colour.

That's just the work I've managed to do myself, we got a wedge knocked off the asking price because the roof was effectively shot to hell and there was rising damp in the downstairs rooms. So I've had the builders in to do a complete tear off, re-felt and re-tile of the roof and to replace the failed damp-proof course in the ground floor brickwork. I've had a new gas central heating system fitted (as the old one was an ancient thing with a back boiler in the chimney breast) and new electrics (ran all the wiring myself, got the electrician to fit the consumer unit and the sockets as is now required by law).

Sometimes by being a practical person, you just end up making a rod for your own back.

[fixthecopier]

Sounds like you got a great deal prntrfxr, I hope it works out for you. The home I currently live in was a bank repo. That is the only way I got it, having had to file bankruptcy after my first wife did what she did. i have been in it 10 years now. New heat pump last year, new roof this year, bamboo floors 3 years ago.We paint the inside once a year just because we get bored with it. It came with a 2 car garage that opened to the backyard so I blocked it off so I could reclaim the backyard. Now I have a 2 car garage full of junk that no body else wants , but it is too good to throw away. Anybody want to buy my old comic book collection, tub of beanie babies, over a hundred cola bottles with sports teams on them? Anybody?

[Lagonda]

You all missed the hard part, trying to convince the wife that the yawning gap between what she wants and what we can afford will not be met in my next salery review.