money transactions are stressful. Moving is stressful. Â Big life
commitments are stressful. Put 'em all together, and what do you have?
The home buying process (and the potential for one of the most stressful
life experiences you'll ever have)!Â
But even in this volatile market
where distressed properties - and people! - are commonplace, it is possible to maintain your sanity in the midst of a real estate deal - I promise.
Here are 3 money, mindset and calendar management strategies for buying a home, without stressing entirely out.
1. Â Work the Boy Scout program: be prepared. Â Scrambling
for money and documents that the lender, unexpectedly, â€œrequiresâ€ to
close has got to rank up there in the top couple of stressors that
buyers experience. Once you get into contract and, especially, once
youâ€™ve removed contingencies and put your deposit money on the line,
every request that your lender makes seems like a ransom demand for your
home - and your life, as youâ€™d planned it.
this scrambling by being prepared. If you are planning to buy a home
down the road, consult a mortgage broker and real estate pro early on in
your planning process, so you can know what kind of cash you'll
realistically need to close the deal - before you start the buying process. You might keep hearing about 3.5% down FHA loans, but your local pros can reality check you that it might cost an addition 5 or 6% of the purchase price just to close such a loan, in your area and price range!
If they give you a range, err on the
high side - penny-scraping buyers are generally the most stressed of
them all, as they are the ones whose deals are most likely to be
entirely derailed if thereâ€™s an uptick in interest rates, say, during
the time they are house hunting or in escrow, or if the homeownersâ€™
insurance costs a bit more than they planned.
have all your documents ready, too - things like divorce decrees, tax
returns, updated check stubs, documentation of bills that youâ€™ve
recently paid down or off , even driverâ€™s licenses (you wouldnâ€™t believe
the number of people who canâ€™t produce ID when the notary needs it at
the closing table!), keep all these items at the ready in case your
lender requires them. By the same universal law that renders my dogs
smarter and faster the wetter they get, it seems like lenders require
the most documentation of the folks who have no idea where their most important papers
but not least, thereâ€™s also an education element of preparedness.
Â Educate yourself about the standard practices and timelines for a real
estate transaction in your local market (your agent will surely be able
to brief you on this, and you can also peruse Trulia Voices Community to
sample the experiences of other folks buying right now in your area.)
Â If youâ€™re buying a bank-owned property or a short-sale, educate
yourself about what this will entail - spend some time reading up on the
rollercoaster of Wild Westiness (a mixed metaphor, I know, but still
appropriate) that some distressed property sales can be, from the
buyerâ€™s point of view. Â
When it comes to buying a home, realistic expectations will set you free. Â Stress-free, that is.
2. Â Keep your timelines as flexible as possible, as long as possible. Â Rarely
does the sun set in America without some homebuyer (or 5) near you
lying awake in bed wondering how long theyâ€™ll have to: Â Â Â a) keep bunking with their in-laws, Â Â Â b) keep paying the nightly rate for the all-suite hotel down the street from the place Â Â Â Â Â Â theyâ€™re buying, Â Â Â c) keep paying the daily fee for the moving truck which is parked outside,Â Â Â Â Â Â Â Â Â containing everything they own, Â Â Â
d) keep begging their landlord to please, please, please give them
another 24 hours Â Â Â Â Â - and they swearing theyâ€™ll be out after that (even
though they said that Â Â Â Â Â Â Â yesterday!), Â Â Â e) keep pushing back the vacation days they took off work for the move that seems Â Â Â Â Â Â like it will never happen, or Â Â Â f) some combination or all of the above,
all because their escrow is not closing on the timeline they expected it to.
are as many reasons for late escrow closings as there are insomniac
homebuyers facing this issue: buyerâ€™s loan underwriting is taking too
long, sellerâ€™s short sale application is still being processed,
appraisal is glitchy, bank-owned property asset manager is slow to
produce the necessary signatures, and the list goes on. Â
important than knowing the causes, though, is having the awareness that
escrow closing dates are not set in stone until the end is very, very
near - and that the problem of delayed closing comes up with
ever-increasing frequency these days. Buyers who are trying to time
their closing so that they move out of their apartment on the exact day
they plan to close are likely to be disappointed - and temporarily
homeless - in the current market climate.
Best practice is to plan on
some overlapping days, weeks or even a month between the time you should
be able to move into your next home, and the time you must be out of
your current home, if you can afford it. Keep your moving plans
flexible as long as possible - Iâ€™ve know a number of buyers who didnâ€™t
realize their move would be delayed until they were signing their
closing docs! Â
itâ€™s sanity-making to try to keep some flexibility about your daily
calendar while you are in escrow, lest you need to show up at the
property and get some additional inspections, unexpectedly, which were
recommended by your inspector. Â If you only have a couple of days before
you must remove your inspection contingency, you might have to drop
everything and stop in at the place for an hour here or there. Â You
might also need to stop in at the bank - in person - to wire cash when
itâ€™s time to increase your deposit or pay your down payment or closing
costs into escrow. This cannot usually be done over the phone or outside
of bankerâ€™s hours, so if you can be a bit flexible for these outings,
calendar-wise, youâ€™ll be in good shape.
3. Â Pre-approve the folks across the bargaining table from you. Â Thereâ€™s
nothing worse than doing every thing youâ€™re supposed to do, then having
the deal fall apart at the last minute, through no fault of your own.
Iâ€™ve known scores of buyers whose short sales failed to get approved by the
sellerâ€™s bank and fell out of escrow as a result. Â Iâ€™ve also seen and
heard from buyers whose deals died when their intended properties failed
to meet the buyerâ€™s mortgage guidelines because of condition problems
like incomplete kitchen remodel jobs, mold or electrical problems and
high-cost pest report items that neither the buyer nor the seller can
afford to repair.
ailing transactions can be prevented by early diagnosis: vet the other
partyâ€™s qualifications and ability to close the deal, before you get
into contract. Â For buyers, this can mean having your agent collect as
much information as possible about the sellerâ€™s equity position, how
underwater the home is, which banks are involved and how successful the
listing agent is at closing short sale transactions - all of these
things can give your agent and yourself a big old clue as to whether a
short sale is likely to close. Â Similarly, if youâ€™re getting an FHA
loan, before you make an offer, walk through the property with your
agent and troubleshoot it for condition problems that might come up
during the appraisal.
this information you can make an informed decision whether to move
forward and try to buy the place; if you get into contract knowing itâ€™s a
crap shoot, at least youâ€™ll have realistic expectations - the sort that
are very difficult to disappoint.
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