I'm an idiot, and I'm buying a house! Please help me with my journey.

Miscellaneous and Personal Stuff I Must Share
43

Pretty much any house that’s got exterior walls should be able to take a heat pump. Those are better than AC even if you’re in a place where construction didn’t include heating until it started including AC (“oh c’mon, it never gets cold here, why would you want heating?”), because when it does occasionally get cold it’s a single machine for two uses and a heat pump is more efficient than other heating methods. Mine has a dehumidifier function too. You may want to check the cost of purchase plus installation and do it already, rather than after you’ve moved in.

Nava, who installed a heat pump in her “it never gets cold here”, 1960s Barcelona flat and is superhappy about it.

44

We get snow on the tops of mountains here also. But not a lot of houses there.

45

We just got central air here after 23 years, since the number of days of high heat have increased so much. We’re well insulated, so consecutive days of high heat are the real problem.
Assuming you have heating, ask someone about how easy it would be to put in central air. In NJ it was very easy and cheap. Here the ducts were too small and it was a lot more expensive.

Our windows aren’t designed to take window units. You can also have the air conditioner out through a wall - my father did that for one of ours when I was growing up.

46

In Hawaii? There’s a reason I mentioned places where heating doesn’t come built-in.

47

I know upfront costs and the cost of homeowner’s insurance were mentioned - have you looked into property taxes? Should be available online or from your agent.

I recently considered buying a small house nearby - I was going to pay cash for the house, but didn’t go through with it because taxes came to over $300/month.

48

Ymmv but Your RE agent should be able to answer many of your questions about closing costs, as well as estimate your property tax even if it’s currently non homesteaded which you’ll have to apply for that exemption from the taxing authority. Have you signed a buyers agency agreement? This document will identify how you will be represented on the contract negotiations. You are a cash buyer? Show proof of funds and You hold negotiating power in this sellers market!

Ready to write an offer? Have your agent go over the purchase agreement line by line. Once the offer is accepted the clock starts ticking on getting inspections done, financials etc. you have a window of time to reject the house based on inspections. If you come back with an addendum to contract with list of repairs beware this can negate your offer meaning the sellers can say nah we don’t accept your addendum for repairs, we’ll take another offer. You can’t back up the bus on the deal. Lots of ways for deals to go sideways. Your RE should have experience work under a reputable broker.

49

Our addition only had wall heaters, which we used only a few times a year. We have it now, but it came more or less free with the air conditioning. And our climate, though good, isn’t as good as Hawaii.
Central air is going to be a lot more expensive if you don’t have heat and thus ductwork.

50

Something I just thought of. If there’s any way to do it, have at least the framing of the house checked. Hawai’i is a moist climate <cough>, and you could have framing that is rotted or, worse, mouldy. Black mould is nothing to sneeze at (says the woman who just sneezed for 5 minutes straight which triggered the thought). There might be a way to do an air quality test by leaving an open, airtight container there for a day or two, closing it up, and having the contents lab tested.

Although for all I know, there are no mould issues in Hawai’i, black or otherwise, and the house is probably built with local wood that presumably is proof against water rot.

51

The person inspecting the home will (or at least should) be going into the crawlspace or basement and the attic with a good flashlight where you will most likely have these problems (be most easily seen) first, mold and signs of mold, is one of the things a competent inspector looks for since it is a direct sign that the structure has or had a water problem.

Indoor air quality testing is a standard thing for a mold remediation specialist to do.
It’s done pretty much the ssme way that they get particulate or pollen counts for the air outside in a given area

52

The notion that your agent is working for your interests is pure fiction. Of course, some agents (a small minority) are just honest people and will do so. But the system is set up to give agents a massive financial incentive to gloss over any problems to make the deal go through. You should proceed on the assumption that both seller’s agent and your buyer’s agent are effectively working to gloss over any problems and just make the deal go through.

Don’t ever take a recommendation for an inspector, attorney or surveyor from an agent. Even if there’s no explicit corruption, these people get a lot or business this way, and they know what keeps the agent happy and keeps the referrals coming - i.e. not highlighting problems that may be roadblocks to a smooth quick deal going through.

Hire your own attorney to review everything. Attorneys have much stricter rules that they must be working entirely in their client’s interest, so you have much greater confidence that your attorney will highlight problems. An experienced real estate attorney can offer you broader advice on how to handle issues beyond just the legal docs, and where it’s serious enough that it would be unwise to trust your agent.

Walk around the neighborhood several times, at different times of day, weekdays and weekends. Knock on the doors of your potential future neighbors, and ask them straight out if there are any problems in the neighborhood. People will tell you - they love to gossip about stuff that has been annoying them to somebody who will listen.

53

Hawaii is weird. Different climate, plants, animals, and lifestyle.

But, first let me congratulate you on being able to afford a house in Hawaii. I hear its pretty expensive.

Does your house have coconut trees? I hear their upkeep can be expensive.

Nothing else to add that hasnt been mentioned except I hear people like windows that catch the cool breezes.

54

An update: (TLDR version below) I put an offer (at about 93% of the asking price) on the house that I liked. On reflection, I realized that paying cash was not a good idea; technically I have the assets, but much of the value is in IRAs, property, and the like - not too liquid and/or there would be a big penalty for taking it now. So, I decided to put about 25% down and take a loan for the rest.

Immediately, as those of you who are more knowledgeable than I was about these things, my task list went ka-bloom. My asset manager advised that I shop around for a loan to get the best rate (he’s with Morgan Stanley and can get me one through them, no problem, but told me to find my best deal rather than go straight to them).

As soon as I contacted the lenders recommended by the buyer’s agent, they wanted a huge amount of info, including scans of tax returns for the past few years. Of course, lenders need to understand your situation before they will lend you money, so that’s not unreasonable. But it IS a lot of work that I stupidly wasn’t expecting - and naturally, it hit at the exact same time I got a huge editing assignment under tight deadline.

Meanwhile, I went through the offer letter and boilerplate Hawaii disclosure form point by point with my agent. (She seemed a little impatient with me at spots, which I did not appreciate.) The offer was submitted and I bit my nails wondering if it would be accepted.

As the deadline for responding to my offer elapsed, my agent called and said that, presented with the offer by the seller’s agent, the seller said in dismay, “But where will I go?!?!”

That gave me a laugh, but it sounds like she and I are both a bit unprepared for this process. Ultimately, she countered with a 1% drop in the original listing price and said I would have to pay for survey and termite inspection (standard seller costs around here, I guess).

So I said no. My offer was based on what I really believe I can afford, after discussion with my financial advisor. More than that, and it would screw up my financial projections for a comfortable retirement over the long term. (I’m also not keen on being nickeled-and-dimed on the details - it doesn’t bode well for negotiating dealing with any problems the inspection might uncover.)

Anyway, I’m not convinced she’s going to get a better offer, but hurray for her if she does. I am not in a huge rush. I can stay put indefinitely, line up a loan, and search more at my leisure. I’ve bookmarked the MLS#; we’ll see if the house stays on the market and if the buyer is more open to negotiation in the future.

So. Now I REALLY have some questions, as starting the loan process sent me into high-stress mode. Kind Dopers, please tell me:

[ol]
[li]Only one lender was prepared to give me rates on a 15 and 30 year mortgage on the spot. All the rest wanted to pre-qualify me first. Okay, sure - if I gather the info for one lender, I can gather it for all of them. But do I REALLY need to go through that whole process just to get simple interest rates on a loan?[/li]
[li]How fast might the rates change? Like, if I go through the pre-qual process and get rates three weeks from now, and then want to buy a house 7 weeks from now, will I have to review all the different lenders’ rates again to see if the best deal has changed?[/li]
[li]What the hell are basis points and why do I have to say how many I want? (The one lender who coughed up rates wanted to know what I want in that regard.) I’m real clueless on that one![/li]
[li]What’s the etiquette of finding another buyer’s agent? I’m not thrilled with the impatience I detected when I went through the offer letter. I mean, sure, I’m an idiot, I get that. But I swear, I was doing my best to be efficient and focused, not wasting her time. I had already gone through the whole document on my own and annotated it and looked things up, so I was prepared.[/li]
But how can I switch (especially on an island; everyone knows EVERYONE here). She’s got me in her database so now I automatically receive e-notifications of listings through her. And once I hear about a place through her, I can’t very well cut her out of the process.
[/ol]

**TLDR: **I decided I’d be best off taking a loan. I made an offer at about 93% of the asking price. It was countered with a 1% drop in the original price and I rejected the counter. Starting the process made me realize there is a lot to do in order to get a loan. Now I have at least four questions, listed above. All answers gratefully received!

55

Where I’m living right now, yes, lots of palms, though only one or two that produce edible coconuts. I have a lot of coconut meat in my freezer from the last time they were trimmed, in the context of some overall landscaping. Dunno about ongoing maintenance; it’s never been done before, though one of my tenants says he knows a guy who will do it in exchange for keeping the coconuts.

The property also produces occasional papaya (the trees come and go), bananas, bitter melon, avocado, a ton of guava, and (when I plant it and the feral pigs don’t destroy the patch) sweet potatoes. Not enough to be a significant source of food, since it is all haphazard volunteer growth rather than deliberately planted (except for the sweet potato patch). And the avocados are frustratingly just out of reach in the dangerous sloping part of one of the gulches! Still, every time I get to eat fruit from my property, it makes me happy.

56

All legitimate lenders want to see your complete financial picture. Tax returns are a must. If you have an accountant who can prepare a financial statement, that’s good, too, but rarely required.

As a real estate agent, I always advise buyers to get pre-qualified for a loan before searching for properties. The lender will give you a range of loan that you qualify for, which will help you to avoid properties that might be too financially risky.

Pre-qualification shortens the time between offer and closing, and a pre-qualified buyer is much more attractive to a seller than a non-qualified one (cash is even better). If you were in a bidding war, a pre-qualified or cash offer will move you to the top of the list, all other things being equal.

No legitimate lender should force you to apply for a loan in order to get current rates. If you have a problem with this, work through your agent. I get bank loan rate sheets sent to me weekly, and he/she should have one around.

Your lender can give you a letter guaranteeing a rate for a short period of time, typically 60-90 days. If you need to extend that, it’s unlikely you will have to reapply from scratch unless something significant has changed. BUT: Don’t change jobs, take out another loan, apply for a credit card, buy a boat or car on credit, or do anything that might mess up your rating, or God forbid, miss an installment payment, or YOU WILL have to start the process over again.

Basis points are (my inner cynic speaking) just another way to extract money from the borrower, up front. Google the term to find out more. I won’t work with lenders who charge basis points, but other territories and economic climates are different. Your goal would be to reduce any and all extra charges as much as you can and if you have good credit, that won’t be hard. That’s why you need to comparison shop for loans. In advance!

You will have to follow the laws in your state and adhere to any contractual obligations. Did you sign a Buyer Agency agreement? If so, check it for expiration date and terms. If in doubt, see your attorney.

In my state, you are not obligated to sign a BA, but there are advantages to doing so.

57

Thanks so much, Musicat.

The “get prequalified BEFORE searching for a home” is looking like excellent advice. (To be fair to the BA, when I contacted her I said I’d prefer to pay cash - it was only later that I figured out that wasn’t the greatest idea.

58

Yup you got this!

Now every day morning and night check the MLS, look at your target neighborhoods and wait for that new listing to hit the market. Your are a bonafide prequalified buyer, sellers will be happy to do business with you!

What neighborhoods, ill look for you! lol zillow and realtor are fave time wasters(well i obsessively check the market at me Dads place as its is up for sale, Amelia Island Fla 1/2 mile to the beach!), love looking at aerial images and interiors!

59

A caveat to the pre-qual, because I’m dealing with a bite-in-the-ass from this:

Make sure your income stream hasn’t changed in the last 2 years, or if it has, make sure that your tax records reflect it favorably.

We got prequalified for a house purchase recently, Bank Loan Dude was all “This’ll be a piece of cake!” So we put an offer on the house we liked, plonked down earnest money, set up inspections, etc. Fast forward a few days, and I’ve gathered masses of financial paperwork and sent it to Loan Dude at the bank. And all of a sudden he’s hedging and saying Umm …

My husband went from W2 income to 1099 income in January. Still employed well, still bringing in a tidy income. But because we don’t have the past two years’ tax proof that we know how to handle it, we were not accepted for the loan. Never mind that from 2006 to 2017 we DID have 1099 income (a lot of it, with massive tax returns in proof of it) as well as W2, never mind that my husband is a physician and has been in constant practice for 28 years, never mind stellar credit scores for both of us, we were not eligible anywhere for a conventional 30 yr. loan for a 200k house.

So I’m in the middle of baring our financial soul even further, jumping through hoops, and will end up losing out on the current low interest rates to get this property. I’d bail on the whole thing but the move makes sense in so many other ways that I’m sticking it out and crossing all body parts for a good outcome.

Apologies for the hijack/rant, but a pre-qual is NOT the same as a pre-approval.

60

I am not a loan officer, so I can’t say if you are right or wrong; we do use the terms somewhat interchangeably. But I do know that all pre-anythings have long lists of conditions. “We promise to give you the loan, except…” If you put yourself in the lender’s position, I think you can see there is a good reason for that.

Which is why I advise buyers to not do anything that might change their financial status between the time of pre-qualification and closing on a property. I had a buyer who had good credit, but after making an offer on a property, went out to celebrate and bought an expensive, dream motorcycle off the showroom. Bad idea; his lender forced him to start the approval process all over again, which delayed closing by 45 more days. The seller didn’t want to wait, and accepted another offer instead.

61

You’re right. I should have said that prequal/preapproval does not guarantee a loan.

62

Bah, double post, sorry.