When an Agent Buys a Home – Part III

The Inspection and Financing

We have a contract! Don’t Panic! Now, what is it REALLY going to cost us and what kind of shape is it REALLY in. This is where we find out how much we REALLY want a new home.

Like any smart home-buyer, we were pre-approved for financing and had a couple of options on how to structure the possible loan. Now that the property & price are identified the real numbers come into play. As a Buyer, comparing GFE’s (Good Faith Estimate) from different Loan Originators feels like I’m standing on a subway platform watching a professional three-card Monte (the bent cards & you have to catch the queen). There are known costs, estimated costs, pre-paid items, escrow accounts, and points all arranged in a very detailed page. The problem for the average buyer is the categories vary between lenders but some how the numbers come out the same at the bottom. Some people are good just looking for the interest rate and monthly payment. Others will create spreadsheets comparing individual costs and categories and lay awake at night thinking about the dollars involved. I like the spreadsheets, for some reason. After a few nights of restless sleep, I have a new found appreciation for my clients and the level of anxiety that accompanies your name to a sizable amount of debt.

What I discovered is at the end of the day you have to make a decision and pick a loan package. If you are working with quality lenders the top 2 options are really very close in costs and it comes down to personal comfort. You can maximize your down payment to lower your monthly payment or minimize the down payment to keep cash available for repairs or other investments. It’s your money, you get to make the call.

The Inspection appointment is one of my favorite events during a contract because new or old, you just never know what you will learn at the end of the day. I am always entertained by homeowner modifications completed over the years. More than once I have heard a client or inspector say “What were they thinking?” It isn’t a perfect world and I’m telling you right now, your house is not perfect. Get over it and get on with it. If the house is solid and there aren’t major health or safety issues involved we will likely find an agreement that works for the Buyer and Seller.

I am convinced the Inspection process does work. It provides the Buyer an opportunity to turn and run, negotiate for work on the house, or sign on as is. Each house and each Buyer is a one of a kind and the inspection process helps the Buyer get acquainted with the investment. Our house is a 1951 frame built structure and there are issues throughout the house. However, they are issues we are willing to deal with on our own terms. We have the knowledge and the resolve to work with the issues during our time in the house. It is go-time and we’re ready to seal the deal!