After a stressful bunch of days house-hunting, negotiating, and getting paperwork signed, we were well on our way to buying our first house. Luckily (and surprisingly), the process over the next several weeks went very smoothly:
- Property Inspection: While the inspection was a bit more costly than I had expected (nearly $600), I was tremendously impressed with the company that did the inspection, both due to their great communication (quick to return calls and offering to speak with contractors, other inspectors, the seller, etc) and their very thorough report that they were able to post on the Internet within 24 hours of completing the inspection. Overall, the inspection came back with very few non-minor issues. Some minor safety stuff here and there (no handrail on the side steps, large gap between one of the railing posts, etc), some fixes to prevent future maintenance issues (gaps in some window paneling, mildew on some front shingles, and some HVAC precautions), and some tunneling through the insulation that may indicate an animal made its way into the attic. Other than that, the house is in great shape at 7 years old.
- Radon Testing: As I discussed in a previous post, this was the big surprise during the due diligence period. Radon levels were indicated at about twice the government recommended levels, and the seller hadn’t previously disclosed this information. Even now it’s unclear whether the seller knew radon levels were high (he had a test done, but says the results were within guidelines — despite the fact that he hasn’t been able to find those results).
- Termite Inspection: The inspection indicated no sign of any current or previous infestation, which was in line with what the seller had disclosed.
- Appraisal: I had no idea what to expect with the appraisal. Given that we bought the house for more than $60K below it’s original listing price, but also that homes in the area were not selling very quickly, I didn’t know if I should expect the appraisal to come in lower than our offer or well above our offer price. In actuality, it came in about $20K above our asking price, giving us about 5% automatic equity in the house. Hopefully once the market picks up, the appraised price (and the selling price of nearby homes) will increase to where it was a year or two ago, but regardless, we’re very happy with the appraisal.
- Loan Rate: After some research on how mortgage rates work, I made the decision to lock in my 6.0% rate early (with another 1/8 point for LPMI).
- Loan Approval: After the initial indication that getting a mortgage loan may be difficult, the financing went off without a hitch, and we were formally approved about two weeks before closing.
- Fence Approval: My fiancee worked her magic (as usual) and found a direct connection to the HOA committee, and personally requested that they expedite their decision about whether we could install a backyard fence. Normally this process takes up to 60 days, but after a couple phone calls, and submitting all the necessary paperwork, we were able to get unofficial approval in less than a week, and a formal approval in under two weeks.
Based on the due diligence we had done, we decided to ask the sellers to fix what we considered the two most pressing issues (at their expense) prior to closing: the radon issue and the potential rodent issue. While the sellers were adamant that there were no rodents in the house (they said they had a rabbit and that was likely the culprit of the tunneling in the attic), they agreed to fix both issues no later than three days prior to closing.
All that’s left now is the closing…