Tuesday, July 10, 2012

Life: First Time Home Buyer Experience, Part II

Our bid process was relatively uneventful.

We made an offer.  The seller made a counter offer.  We accepted.

The train began running down the tracks!

The loan process

It is a lot of paper work so get on that right-away.

We got the feeling the industry is pretty competitive as the rates and fees cited by three mega-banks (Chase, Wells Fargo and Bank of America) was pretty much the same.

Since we have a lot of our financial services handled by Bank of America, we went with them.  

Everyone has a horror story about bank mix-ups in the loan processing.  

On one hand, I'm surprised given how many loans are processed over the decades you would think the process is well worked out.  But on the other hand, so many hands touch the documents that something inevitably gets fouled up.

I won't name names at Bank of America but, on the whole, our customer service experience from them would not get an "A" rating; maybe a "B-" and more likely a "C."  

Maybe my expectations were too high.  Alas, we were told that the boo-boos on the paperwork, missed deadlines and general air of low communication we experienced were not unusual.  

So my only advice would be to read everything as careful as you can.  At various points we found the city of the property wrong, birthday listed incorrectly, conflicting instructions on how to fill out various forms, phone numbers mistaken, etc.

Also, keep track of the timelines and be sure to call to check that things were on track.  Even with our consistent contacts with the lender and our agent's contacting the lender, deadlines were missed by a couple of days on two occasions (conditional approval and final approval).  

Everyone will have advice for you and you just have to weigh it for yourself.  Certainly, if you got a good realtor, and we did, that helps.  He or she will know about local conditions in the area you are buying into.  He or she will also know about what kind of issues are cropping up from lenders.

Get input from web pages and others who have purchased recently.  We also leaned on Home Buying for Dummies.

Multiple Steps

After the loan paperwork gets started, you will be working with inspectors.  Our realtor recommended Advanced Group Property Inspections.  You can inspect as much as you like but the cost is on the buyer as part of the due-diligence.

The inspector checks the place out for problems big and small.

Indeed, if they find a big problem of deal breaker proportions, it is part of the purchase contract that you can bail out and recover your deposit (in our case 3% of the agreed upon price).

For smaller problems, you can ask the seller to fix something or offer some cash credit to fix the problem later.  If your requests aren't a deal breaker for them, they often will meet you part of the way on the request to keep the deal moving forward.

In our case, there were a few things here and there so we requested some cash credit and the seller agreed to meet us half-way on that.

You will also work with an escrow company that serves as the neutral third party between buyer and seller handling funds and documents.  The seller selected Peninsula Escrow.  The mountain of paperwork is quite daunting.  In end, we didn't read every line of every page but we did look closely at pages that were obviously specific to our situation and we did find one document that belonged to another file that was being worked on in their office.  Peninsula Escrow staff communication skills were much better than Bank of America!  And that is all I'm going to say about that!!

So after the initial flurry of activity with loan applications, inspections and escrow forms, things become quiet as the various entities beaver away at the paper work ...

No comments: