Officially House Hunting!

posted 2 years ago in Home
Post # 2
Member
42490 posts
Honey Beekeeper
  • Wedding: November 1999

howtobeawife:  I’m not sure what your understanding is of  a contingency offer. Offers to purchase are often subject to contingencies, most often being the appraisal, inspection and mortgage approval. Sometime offers are made contingent upon the sale of the prospective buyer’s own home.

Getting pre-approval for your mortgage will take that contingency off the table for you. Your lender will, however still need an appraisal to verify that the home you want to buy is worth the money they are lending you to buy it.

Almost all offers should be subject to inspection. Skipping an inspection is rarely a wise move unless the buyer is very knowledgeable and skilled in home building trades.

The more contingencies attached to your offer, the less attractive it might be to a seller. Making a clean offer, with no contingencies other than appraisal and inspection, will make your offer more attractive than an offer with details to be finalized before the sale can be completed.

One tip I have for you. Sit down together and make a list of “must haves” and “nice to haves”.

Develop a spreadsheet and tick off the boxes for each house you view. Leave some blank space so you can add in features one house may have that you never thought of. Also take pics when you tour. When you look at a number of home it can get to be a blur.

Post # 5
Member
42490 posts
Honey Beekeeper
  • Wedding: November 1999

howtobeawife:  Ask family and friends for a recommendation.

Post # 6
Member
40 posts
Newbee
  • Wedding: November 2014

How is the market where you are? Contingencries can be tricky – I wound up selling my house before our new house was built, but we had a contingency in the earnest money/offer of the house had to be sold by Dec 1, 2013 or our contract would dissolve. If you are looking to buy and sell simultaneously (and your underwritinf depends on it), you need to be somewhat confident that your house will move.

 

if you take a family member on their offer (we got a very generous amount towards the house we built), your family member must be prepared to undergo a lot of scrutiny over their financials. And depending on the type of mortgage, remember that you two must also put forward a small percentage of money as well – completely separate from your family member. I would advise against having them put the money in your account, they can just wire it to the lender/underwriter themselves when the time comes. It is the easier of the two options because the seller doesn’t know the details, they just know you are ready to go and buy the house as quickly as possible. This option, unfortunately, is a huge hassle at times what with having to deal with the underwriters. They ask for the same things over and over again.

Post # 8
Member
40 posts
Newbee
  • Wedding: November 2014

They will need to show a lot of financials essentially. Where the money is coming from, how they got it, that they are giving it to you as a gift, etc. Every year, the regulations to get a mortgage get even stricter (for obvious reasons), so basically, your family member just needs to be okay with a brief (depending on how long it takes from preapproval to closing) invasion of privacy.

You guys will also have lots of financial goodies to share with the lender. You could always ask them which of the two options they prefer, though if the current house is not on the market, I can pretty much assume which way they will want to steer you.

You will also learn how much you guys can actually borrow with the (current) house note and any other debts you guys may have individually. Just be careful once you enter the preaproval period and start to really look at houses (which preapproval is honestly the best first step before even looking – how much house can you really buy, contingency or with the gift) to not open new lines of credit or go crazy with any cards you currently possess. Nothing is final until you actually close. 

Post # 9
Member
40 posts
Newbee
  • Wedding: November 2014

I was a lot smarter with the second house. I bought it in August of 2010 before I met my FI. We sold it right before August of 2013. We closed on the one we built in February of 2014. (If you do the sale of the house as a contingency, make sure there’s a plan for if your house sells before you close on or even find a new house – we have lots of pets, so we lived with FIs parents for 6 months. You can sometimes do where you lease your old house.).

That first house was 100% a whim with no consideration to location or anything. I dont recommend that – though it took 2 months to close when we sold, so not too horrible (1st offer fell through). It was also 30 year FHA. We are doing 15 year conventional this time. The interest was killer.

Finding a house can be hard sometimes. The loan process definitely adds to the annoyances.

Post # 11
Member
40 posts
Newbee
  • Wedding: November 2014

if you can swing it with the family member’s loan, that’s definitely the better of the two options. If you are in a hot market, contingencies look less attractive to sellers, so they would potentially pass on your offer for another. If the market is not so hot, at least you are less stressed about trying to sell your home at the same time as buying another.

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