House Hunting: Dave Ramsey Style: Part 3 – Buy Your House

This is Part 3 of a 3-part series. Be sure to learn How to Prepare, and How to Find Your House.

Welcome to the third and final post in the House Hunting: Dave Ramsey Style series!

In this last post, we will discuss the ins and outs of the home buying process from the offer all the way to taking possession of a property.

No, this is not the most glamorous part of home-buying. It’s not as simple as just giving someone money and getting keys to a house in return. If only. I will not attempt to bore you. Actually I will attempt to do quite the opposite and keep this topic fun and informative!

Let’s dive back in where we left on in the last post…we chose the town house strategy.

What happened from that point forward?

Did we laze about, dragging our feet, and cross our fingers together that we would get the town house?

In a dream world maybe. And definitely NOT in the Denver market.

Thankfully our real estate agent (who’ve I’ve been raving about all along) is up to Dave Ramsey standards of being “high-octane and high-protein… meaning she rocks! This is what our last week has looked like in a nutshell:

An intense collaboration of several people under tight timelines.

This past Sunday afternoon (one week ago…wowzers!) we saw the town house and really really liked it. We felt like we were at home. The next step was to tell our realtor we wanted to put an offer in and everything got accelerating from there. Now, I really wish I could tell you everything Barbee, our agent, pulled together in the following 36 hours…but I can’t give away all her tactics! She’s that good and I can’t compromise her edge by revealing all on this blog.

Before she would allow us to offer a bid on the house, we were advised to go back to the neighborhood we wanted to buy in and spend time walking and talking with people. Jonathan and I hopped in the car, went back to the town house development, and walked around for nearly 3+ hours. We met lovely people and asked them LOTS of questions – we wanted to research the good, bad, and ugly before we committed to wanting to live there.

Fortunately the people were great. Lots of families in the area. The HOA is very healthy and we actually met the VP of the Board. I asked if I could apply to get on the board and she said there was a spot that just opened. PERFECT! When buying into a townhome, you need to get on the board!!!!! Who else but YOU will make sure they are spending the money correctly, honestly, and in a healthy way? We won’t let our largest asset be at the mercy of others ideas and opinions. We are planning to get. in. there. and be part of the choices.

We also want to get involved, meet people, and serve the community in a meaningful way. Bonus!

After walking around, we wanted to move forward with the bid…although we were getting nervous. We watched at least ten others tour the town house while we walked around! I know it’s over reacting, but this is how big the crowds were in my mind.

When we called our agent that evening, she already knew there were already three offers on the table (all over asking price) with anticipation of four more by the end of day…and they were going to take offers for two more days. GULP!!!

Translation of that information in the Denver market = Any bid we offer had to be competetive ie. over asking price. But, we don’t just have money to give away like Aladdin…

Our agent gave us some suggestions and advised somewhere in between $5,000-$9,000 over asking price. I got online and research all other town homes in the area for sale and the past month’s worth of sales and from that information we came up with our number within her recommedations. We felt good offering it but knew it may not be enough…

This is where Barbee’s expertise came in. She’s never lost a house unless it was a over money. That gave us tremendous confidence since we’ve heard friends tell stories about losing houses. We weren’t worried about that with her…but we also knew our offer might be less than others. This is the part where I can’t reveal exactly what Barbee pulled together but I can tell you the outcome:

They chose us and we beat out TWO cash offers for more money!!!!!! 

That is incredibly hard to do but Barbee did it. I am confident that without her we would not have gotten this town house. We were actually sitting at Ikea when we got the news. Amazingly, we walked out only having bought a french press. Who goes under contact on a home at Ikea and doesn’t leave with new furniture? I think we were too in shock.

Here’s where the post gets technical. I provided links to general summaries of a few things I mention, in case you have not heard of them before.

This past Tuesday night, minutes after hearing we were chosen, we got to see our contract online with not only our signatures but the seller’s!!! 🙂 We watched Redfin update our property to “pending.” EEEP!

This past Wednesday morning we dropped off the earnest money at the Title Company. Down the line we can purchase title insurance. Dave Ramsey says DO IT!!! We plan to.

This past Thursday morning we did the home inspection. A few minor things came back. For example, a bathroom door didn’t shut all the way (not because of structure issues -watch out for those!!). No biggy. We also checked radon levels and they came back in the “safe” zone. Whew!!! We measured all the rooms and began to dream about decorations. Pintrest will be my new best friend!

Yesterday we reviewed the inspection report with our agent and submitted requests for the seller to fix various small things throughout the house. We hear back on if and what the seller will repair this upcoming Wednesday.

Tomorrow we meet with our mortgage broker to lock our rate and sign a few other documents. She then orders the appraisal for the property.

Then we wait.

The seller has to purchase another home in the meantime and we wait to hear about when closing will be scheduled based off that. This is where we are slightly vulnerable…what if they don’t find a house? Then we lose this town house and are out some money. Very unlikely but a possibility.

And more waiting….

The Lord knows I need it.

When the seller finds a house, we will then set up our closing date where we’ll become the owners!! Now the seller may need a day or two in the property (while we own it) to move out before she can get into her new home. We’ve drawn up a contract for how that time will look – utilities, who’s insuring the property, etc. Should be a smooth transition with little risk transferred to us.

From that point, it’s just signing papers at closing, packing, and moving into our first home! 🙂

For those wanting the bullet point version, here you go:

1. Research the area. Meet people. Weigh Pros and Cons. Study recent sales and know what the dollar buys in the area.
2. Buying a town house or condo? GET ON THE BOARD!!!
3. Draw up an offer and have your agent submit to the seller’s agent. (You want a high-octane, high-protein agent on YOUR side) Get an Endorsed Local Provider.
4. Go with a mortgage broker over a bank (in most cases) as they can close quicker, communicate more personally, and advocate for you.
5. Put down your earnest money if you go under contract. (Varies but ours was $1,500)
6. Schedule an inspection. ($300-$500) Make sure they look for mechanical, electrical, and structural issues thoroughly.
7. Check radon levels and don’t forget to do a sewer evaluation (unless sewer is owned by the HOA…which it is in our case).
8. Submit requests for repairs by the seller. Accept or end contract based on response from seller.
9. Get title insurance. ($300-$500)
10. If buying more than basic sub-division, get a land survey.
11. Lock-in your interest rate (if taking a mortgage). Find out exact closing costs. Calculate if it’s worth to “buy down” your interest rate. To buy down, you pay more at closing but your interest rate is lower over the life of the loan. For us, the cost difference between our rate and buying it down would take us 6 years to recoup. Not worth it since we don’t plan to stay in the town house that long. We’re better off paying more at principal monthly. If we were staying longer? I would buy it down.
12. Come prepared to sign documents and provide money due for down payment (hopefully you have at least 10%) and closing costs (can range from $1,000-$5,000).

WHEW!

I hope that was fun and educating, as that was the goal!

When we finally move, yall will get some photos! 🙂