Buying My First House: The Process
In the two and a half years prior to November, 1998, I:
- Visited 10-12 open houses. This allowed me to get a feel for the market, and a feel for how much house I would want to buy.
- Bought and read How to Buy a House in California, by Nolo Press
- Saved money
- MLS Listings - Real estate listings on-line for a lot of the Bay Area
- Ardith West - My Realtor. If you're looking for a agent in the South Bay, I'd strongly recommend Ardith.
- E-Loan - They've handled both of my refinances.
Timeline
1998
November 1-17 - Investigated loans on-line. Developed a spreadsheet that would allow me to estimate my closing costs.
November 18 - Ordered credit reports. The report from Experian was the first to arrive, three days later.
November 21 - Attended a first-time homebuyers workshop at the Billy DeFrank Center.
1999
March
March 1 - Called Ardith West, the real estate agent my parents used when they moved 18 months earlier. Started filling out an on-line home mortgage application with (the now defunct) Homeowners.com.
March 3 - Finished filling out the on-line loan application. Made an appointment to visit some houses on the next day with Ardith.
March 4 - Visited a couple of townhomes with Ardith.
March 5 - Was contacted by homeowners.com. Got a list of supporting financial documents they needed.
March 8 - Faxed the supporting documents to homeowners.com.
March 10 - Got a request for more documents from homeowners.com, which I then faxed in. They faxed me my loan pre-approval letter later that day, which I then promptly faxed to Ardith.
March 11 - Got my loan package in the mail.
March 12 - Talked with my agent at homeowners.com re. various questions I had on the application. After getting my questions answered, I finished filling out the documents in the application and mailed them in.
March 16 - Went through a condo in Cupertino with Ardith that met nearly all of my written requirements.
March 18 - Went through the condo again with Ardith and my parents. After a lot of thought and discussion, I decided to pass on the condo, mainly because it didn't "feel right". This is probably due to the fact that it had an interior entrance. I think it felt too much like a hotel, or perhaps the retirement home my late great-grandmother lived in.
March 20-21 - Went through some open houses.April
April 11 (Sun) - Found a three story, three bedroom townhouse in Mountain View that I liked.April 20 (Tue) - Made an offer (the only offer) on the townhouse. As I was the only person making an offer, and as the house had some quirks (no bathroom on the second floor, for example), I offered $336,500, which was $12,000.
April 21 (Wed) - Got a counteroffer on the townhouse for the full price and for way too short a time to remove contingencies. Apparently the sellers were insulted, and decide to offer an insulting counteroffer in return. I countered with $340,000, but they didn't make any movement in my direction and I let the townhouse go. After a month or so it eventually sold for $1,000 over the asking price!
June
June 10 (Thu) - Found a second townhouse that I liked, this time in Sunnyvale. One problem: it was priced at $389,000. Ardith's estimated it to be worth about $348,000, while I came up with $353,000. I made an offer at $353,000. The sellers were so insulted that they didn't even make a counter offer.July
July 11 (Sun) - Went through three townhouses in Sunnyvale with my parents. There are two I really like, a 1,400 sq. ft. 3 bedroom, and a 1,800 square foot 4 bedroom. I decide to make an offer on the 3 bedroom.July 13 (Tue)- Upon hearing that the townhouse has 8 other offers, I tell Ardith to make the offer for $11,000 over the asking price. I don't get the townhouse. I decide to make an offer on the 4 bedroom townhouse.
Also, I found out that the owners of the Sunnyvale townhouse I had made an offer on reduced the price by $12,000, to $377,000. I told Ardith I was still interested, and she tried calling the listing agent, but he wouldn't return her (repeated) phone calls.July 17 (Sat) - I hear that I'm one of two buyers bidding for the house. I make an offer for the full asking price. The sellers counter both my offer and the other offer with non-binding counteroffers. Their counteroffer to me is $5,000 over asking.
July 18 (Sun) - I accept their counteroffer, but the sellers decide to go with the other buyers. This was probably the biggest disappointment of the home-buying process, for two reasons. First, I liked the home more than just about any other I saw. Second, I didn't realize until I came into Ardith's office that the counteroffer was non-binding. I went to bed the night before thinking I would accept their counteroffer and everything would be done. When that didn't happen, it was a shock.
July 20 (Tue) - Ardith took me to see a half-dozen new condos and townhomes. The one that I liked the most turned out to be right next to the apartment complex in which I lived. It had been sitting on the market for a month.
July 21(Wed) - Decided to make an offer on the townhouse near my apartment complex. Sent Ardith an e-mail in the evening telling her I wanted to make an offer.
July 22 (Thu) - Ardith calls me up and tells me that just that morning the seller dropped the price by $10,000! I decided to offer $5,000 under the new price, with a closing date of August 31. She made an appointment to present it to the seller that evening, and presented it at 8:30 at the seller's new home. I arrived at 8:40 and sat with Ardith in her car while the seller considered my offer. They countered at 9:15 at $3,000 under and a closing date of August 25. I accepted the offer and sat in the car signing documents until 10:00. Now the fun really began.
July 27 (Tue) - Went through the house with my parents. We measured the rooms and I started to think about how to paint and decorate it.
July 29 (Thu) - Had the home inspection. It turned up a number of problems with the exterior and inside the home, but nothing to prevent me from continuing with the sale. The inspection recommended another termite inspection, as he spotted a few problems that the first inspection missed. After some thought, I agreed with the recommendation and had Ardith schedule a second inspection.
July 30 (Fri) - Found out that between March and July, the credit reporting agency that my mortgage broker was using put incorrect information on my credit report. This included a duplicate of my (long paid-off) car loan, and a value of "unknown" for my Citibank Visa's credit limit. This ended up lowering my credit score by 50 points, leaving me with a slightly higher interest rate. Lesson: even checking one's credit report in advance doesn't guarantee that something won't get screwed up at the last minute.
August
August 3 (Tue) - Had the second termite inspection. It turned up some termite infestations that the original inspection missed, and recommended an inspection of possible water damage behind the hall bathroom toilet. That afternoon, Ardith and I went through the inspection reports and put together a list of what we wanted the sellers to fix. This took the form of an addendum to the purchase contract.August 5 (Thu) - The sellers agreed to fix everything in the interior that I asked them to, but left the exterior to the homeowners' association. I was given the assurance that the HOA would address the section 1 damage (including termites) before close of escrow.
August 12 (Fri) - Had the inspection of the hall bathroom floor, which involved ripping the entire floor up and replacing the linoleum. My agreement with the sellers going in was that they would pay for it if there was any dry rot, and I would pay for it if there wasn't. Well, while there was a lot of water damage, there was no dry rot, so I ended up shelling out $525. The ironic part was that the person doing the replacement said that dry rot would have developed eventually had this problem not been addressed.
August 13 (Sat) - Chose paint colors, with the help of my parents.
August 18 (Wed) - Wrote a check for the remainder of the down payment, plus closing costs, against my Vanguard money market account and deposited it in my BofA savings account. My plan was to let the money sit for a week before withdrawing it in the form of a cashier's check.
August 22 (Sun) - Arrived back from a brief trip out-of-town and discovered a letter from BofA stating that they were putting a hold on the bulk of the money I had deposited until September 2 (over two weeks)! Needless to say, I nearly had a heart attack. I called customer service at BofA and was told they could speed up the process once the check cleared.
August 23 (Mon) - Signed the papers for the first (80%) loan
August 24 (Tue) - Signed the papers for the second (10%) loan
August 25 (Wed) - After more than half a dozen phone calls, BofA finally made all of the money I had deposited available. Once I found out, I immediately went to the BofA in Scotts Valley, got a cashier's check, and deposited it with the local branch of the title company managing the sale. At this point, I figured I had to sign some final papers, but I found out that the papers I had signed on Monday and Tuesday were all that were required.
August 27 (Fri) - At about 2:00 in the afternoon, the last phase of the process was completed: recording the sale with the county. I got a call from my realtor at about 2:15 with the news. After I got the news, it was time to start the process of painting my new place. But that's another story...