100 Real Estate & Relocation Tips in 100 Days (Day 79)
by guest blogger, Larry D. McGee of The Berkshire Group
For most people, there are three very large concerns when it comes to buying a house to call home. The first concern is finding, contracting for, and performing the necessary due diligence for the selected property. The second concern is qualifying for and obtaining the mortgage loan. And the third is keeping all of the emotions in some sort of manageable order. Most people know about the first two, but little thought is given to the last. You can make the whole process more enjoyable by considering the following:
People lie. Wish that were not true, but the fact is, the truth is sometimes very elusive. Even when the truth is obvious, it can at times scamper away from the simplest of questions. The real estate professional sometimes lies when they "puff" a property. A bit of comparison shopping will usually take care of that issue. Sometimes lies happen when somebody tries to tell you what a house is worth. The best the professional can do is demonstrate what similar houses have been selling for recently. While that is a very reasonable guide to worth, the fact is, worth is decided by the buyer and seller agreeing about a price. Sometimes the professional will tell you about things that may happen, or not tell you. Sometimes they do not know, because there is more to know today than ever before. Take a bit of responsibility for verifying what you are told.
Lenders lie. No mortgage lender today can tell you what your interest rate or lendabilty is without a complete loan application. So be aware most radio and television that lay claim to "lowest rates" or "24 approval" are simply not true. If you receive a "promise", ask the promiser just how they can make that promise, and get it on paper. There are many people involved in creating a mortgage loan, with the "investor" (usually represented by the underwriter) having the final say on your loan. Ask your lender to explain the process, and about the people involved. Put your lenders toes in the fire and the beginning, and keep them there. The lender needs your business, you, the consumer, actually have the power, so do not give it away.
Appraisers lie. No often, but it does happen, sometimes by design, but usually because of ignorance of fact. As the consumer that is paying for the loan, you have the right to question the appraisal. While it may be to your advantage to receive an appraisal less than the agreed price, nothing says the seller has to sell it to you at that price. With the new Home Value Code of Conduct (HVCC) now part of the appraisal landscape, there will much confusion and angst regarding appraisal for the near future. Be aware of any lender that guarantees an appraisal.
You may lie to yourself. Be honest with yourself about your stability, both financial and life. Just because you can make a $2,000 a month payment, does not mean that a $1,800 payment would be a whole bunch smarter. Escalating loan payments mean you need to have corresponding escalating income. Are you emotionally equipped to own and maintain a house?
Life gets in the way sometimes, and stuff happens. If everyone has done their best, and the closing is just not going to happen, then it's not going to happen. Buyers and sellers can die, get divorced, have babies, get fired, suffer the loss of loved ones, and be surprised by thousand other things that pop up out of nowhere. If you feel a need to be angry, fight for earnest money, blame someone, or otherwise lose your cool, then get over it quickly. For buyers, it is a house until you have title and can set about making it your home. For seller's, it stops being your home the minute you place the "for sale" sign in the front yard, and becomes a house, a thing, that you need to sell. That may be a bit brutal, but is the truth.
Buying or selling a home is one of the most emotional things we do as humans. Make every attempt to remain a bit detached until the process is over. Doing so will save you sleep, and serve to make you much more aware of the process, and allow you to have some influence on the outcome.