Well, I decided to put 30% down and finance the balance. I have gone through the title search, home inspection, termite tests, etc. Closing is today. I was told a few days ago what to bring to closing, including a bank check for a very specific amount. Just got off the phone with someone who tells me she will get back in touch with me “later today” with the amount to bring for closing.
WTF? My closing is at 3 pm today, and she will tell me “later today” what amount to bring?
So, my question. Why is a house closing different then a car purchase? I have walked into a car dealership, picked out a vehicle, and driven it home, all with a minimum of paperwork/hassle. And with a car the immediate depreciation is huge, yet I have purchased cars with a tiny down payment.
I’d say it has more to do with the “REAL” in Real Estate.
When you purchase a home, you are now responsible for a whole host of things, along with a long documentation chain. A house is not going to be disposed of after 7 years, 200K miles, or whichever comes first. (YMMV, YTMV)
You are now legally responsible for taxes paid, insurance, defects, toxic spills, and you’re taking a whole lot bigger note than you would for your $25K car, which the bank can come and pick up on a flatbed.
My wife (paralegal) handled the “lawyer” side of the paperwork, telling me what to sign. I looked at it, but have to admit I don’t exactly know what I signed, other than we’re both on the hook for all of it.
There are also much more stringent foreclosure laws for real estate vs cars.
IANAR (Realtor), or involved in any of it, other than working for the cash the wife uses to pay the mortgage on our home.
-Butler
(Good luck, btw, owning a home is the 2nd best thing I’ve ever done… the most work, but certainly the 2nd best) {the new Butlerette is the 1st}
I myself have been wondering the same thing - this house buying thing is going around these days, I inspect today (cross your fingers!) It just seems all too arcane for what it is; you want to sell me this house, I want to buy this house. I mean, yeah, I’m taking responsibility for a hunk of South Carolina, but people do it every day and you’d think it would be more streamlined or something. I understand why the mortgage part is a little complicated - I’m borrowing a crapload of money that I’ll be paying off for, and I don’t like to even contemplate this, thirty years. (I myself am 25. I haven’t even lived as long as this mortgage is for.) But the actual buying, why is it so hard? Shouldn’t it be super-standard by now, after the title search? Once we know who’s buying what from whom, I don’t see why you still need a lawyer and tons of complications.
Well, at least I am not alone in wondering about this. It cannot just be the price thing. I have had friends buy “handyman’s special” homes that went for less money than a new Hummer, yet closing was still complicated.
What about photo ID? At closing one of the things on my list is photo ID. Is there that big of an issue with people purchasing homes incognito? I would be willing to stipulate up front that if someone claiming to be me buys a house, I will happily take ownership of the property.
Lawyers? What for? Buying a home is remarkably lawyer-free in California. At least from the buyer’s perspective, it’s actually completely free of lawyers.
I closed exactly four weeks ago, and it was a very simple process. We showed up at our Realtor’s office with cashier’s check in hand, prepared to sign and initial a ton of paper. About an hour and a half later, we were done and had the keys.
There was a snag with the amount of the check, caused by delays at the title company mixed with the seller wanting a rather aggressive closing date - only three weeks from the date the offer was accepted. We found out the amount on the day before we closed, so at lunchtime on close day, I pop over to a bank and get the check. The close amount was incorrect, though. We received a refund from the title company a week later of more than $1,000 - seems that they overlooked that we both work for the bank, so we don’t pay a tidy bundle of fees. Loan origination fee? Hah! And you thought bank employees only got free checking accounts.
If it weren’t for that aggressive schedule imposed by the seller and that we don’t pay some of the usual closing costs, our close would have been just as simple as buying a car. Probably a bit less difficult actually, since the Realtor doesn’t go off and send in his sales manager to try and coerce you into buying undercoating and the extended warranty.
No undercoating, however my realtor did a little arm twisting (I am sure she would call it “marketing”) to get me to purchase my home owners policy through her company.
When I sold my father’s condo (and if you think selling your own home is complicated, try selling someone else’s!) here’s the way it was described to me,
Everything is prorated. Let’s say you close on the 21st of July. That means you pay 21/31 of thsat month’s property taxes, mortgage payment, utilities, etc., and the buyer pays 10/31 of same.
All the stuff that normally gets paid out of your mortgage payment (property tax, mortgage insurance and so on) has to be calculated, and since your mortgage holder is paying out to different entities, it has to wait for each one to provide a payoff number.
It seems to me there ought to be some sort of spreadsheet program that can calculate those numbers down to the exact time of day and up to the year 9999 with no problem. but that’s not the way it works.
I had a relatively painless closing (less than an hour) due to having a kick-ass mortgage officer. The bank she works for has minimal paperwork, but on top of that, she knew her business and cut through the crap. I put 20% down, she told me to bring a cashier check for (I can’t remember how much) a round number and the title company would refund the difference which they did at the closing. Providing a picture ID is stupid but hey, you want a copy of my driver’s license, you can have it. kunilou is correct about everything being pro-rated. I didn’t get nuts over it. I also didn’t use a lawyer, which sent all the real estate people in a tizzy but TFB. I’m not shelling out a couple hundred bucks for someone to do nothing.
I wish I was kidding about this, and sorry I don’t have a cite, but I believe that the photo i.d. requirement at closing is now required by the USA PATRIOT ACT, which makes sure that Bin Laden can never get a second mortgage here.
WAG: junk fees. At closing, you are given a great pile of papers to sign, which you may want to actually read first, and also it turns out there’s any number of fees (“copying fee $50”) which you may negotiate. It’s their paperwork, it should all be included in the main fee if you ask me.
Yes, they didn’t use to want a photo-ID. I believe it’s Patriot Act surveillance also, what else would it be?
I have nothing of substance to add, except that I also closed on my home today at 3 p.m. (I’m now the proud owner of a chunk of land-- er, hardwood flooring on the second story of a building by Lake Michigan in Chicago. Yay!)
Complicated? I dunno. I wasn’t there. I did it through power of attorney. And coordinating the power of attorney thing wasn’t even too complicated.
Getting the damn thing appraised on the other hand…
If I remember correctly, a big chunk of the paperwork hassle in closing is the loan documentation. If you default on a home loan, they can’t just send a repo man to tow your house away. There’s long, drawn-out eviction proceedings, and the bank can potentially lose a lot in missed mortgage payments. So when you walk away with $300,000 of the bank’s money in your metaphorical pocket, yes, documentation will be definitely be required.
I was involved in a cash-only sale a couple of years back. Since the package had no loan paperwork and no mistakes, we were out of there in under 15 minutes.
You’re correct. If someone really wants a cite, I’ll get it when I get back in the office tomorrow. I work for company that brokers real estate securities-- but I don’t have all the details of the 8,000 regulations I wade through memorized. (You wanna talk about complicated transanctions. . .)
A few weeks ago, I ran into an enormous problem with a deal being purchased by a corporate-held trust. (The trustee is a MAJOR bank). I went around and around patiently explaining to any number of people on the selling end that, sorry, MegaBank just DOES NOT have a driver’s liscence.
Note to Bin Laden, don’t try posing as a large corporation, either. They won’t be fooled!
Insurance. There is a one-year warranty in effect that the seller paid for in order to attract interest in the house. My real estate lady offered money off on the title search and some other fees if I would buy my home owners from her company. Turned out to be a good deal, especially when I switched my auto to the same company.
Closing went smoothly. In and out in an hour. Photo ID of buyer and sellers were photocopied and I am certain Tim, Cheryl, and I are not terrorists. The mortgage people gave me a check for $600 and change due to an error on their part. Funny, my check had to be a cashiers check, while they expected me to trust their plain old regular check. Drank a bottle of champagne with my gf in my new back yard last night. :D:D:D
…and I need you to sign this form to document your signature. And this form to indicate you understand that the other form is to document your signature. And this form to indicate that you understand a pen is used in signing. And this form to indicate you understand that paper is the medium you are signing. And this form to document the time and date of signing. And this form to confirm you were physically present at the signing of the forms. And this form to …
