Some clients ask, what could go wrong in a real estate purchase transaction, the answer, a lot! Tune in as we discuss the horror stories, we have encounter during our years of experience and being in the middle of it all.
Remember not to be discouraged, our goal is to educate our clients and learn from past mistakes and most importantly encourage you to ask questions.
Let’s start from the beginning, I (Carolina) have been in the mortgage industry for 8 years. I started my career as a loan officer assistant for a very busy team. As transactions came in, I made sure to watch, listen and learn as the team found solutions for the problems they encountered. Some of those were job changes, variable income, borrowers going out of the country, family emergencies that would deplete funds for closing and obtaining new debt right before closing.
It’s important to have a complete approval prior to shopping for a home and going over the process from beginning to end with your realtor and lender several times. Ask: what fees am I paying for? What I am I responsible for according to my contract? What do I need to avoid? What can I do to make the process go smoothly?
A good team will make sure you don’t jeopardize your earnest money deposit, don’t lose money on appraisal and inspections and to stay on top of contingency dates.
Know your Timeline
Step 1 – First is the due diligence period, make sure to drive by the property at different times of the day, preform a home inspection and know the HOA rules if any. Once you have your home inspection report, read it carefully so you and your realtor may request repairs from the seller and the request gets answered within your 7- or 10-day period.
Step 2 – Appraisal, your lender will order your appraisal appointment to find out the value of the home and make sure the home is in a healthy and safe condition. Once the report is in, review it with your lender to see if there are any repairs requests from the bank and analyze the value of the home. If the value is under the purchase price, your realtor will oversee negotiations on your behalf to come to an agreement that satisfies all parties.
Step 3 – Your loan contingency is next, make sure to answer emails or phone calls regarding documentation needed by the bank or lender and you have a final approval before this date expires. By this time your credit approval should be clean and ready to close for both the borrower and the property.
- Do not open any new credit cards, auto loans or cosign for anyone, any new debt must be added to your credit.
- Do not get marry in the middle of a transaction, any spouse debt may need to be added onto the loan.
- Do not switch jobs, maintain the same employment you were qualified for.
- Do not leave the country, you must be present to sign closing documents and obtaining internationally insured notaries is very difficult and costly and will delay the closing.
- Do not buy the new couch or appliances, even if you pay for it with cash, sometimes lenders use the funds in your bank account as mortgage reserves if those are depleted you may no longer qualify for a job.
Reach out with any questions you may have; we’ll be happy to help!