What was the continuation of the house story I promised a couple of months ago? I think what happens between putting in an offer and the closing, when you officially take ownership of the house. For us, this was a 30 day period. It involved providing a lot of documents we had already provided many times, and paying for lots of services that are required to close on the house and get the loan, on top of closing costs, which are many thousands of dollars (I still don't really understand what closing costs are). It's kind of a weird limbo time, where you are officially under contract for a house, except any number of things could go wrong. Do you tell people you bought a house? Do you give notice on your lease? Hire movers? One good thing is you usually have a month grace period on your mortgage payment, so giving 60 days notice on our apartment wasn't a big problem. We made the offer end of May, closed end of June, and made our first payment on August 1.
Inspection
The main thing after your offer is accepted is the inspection (about $600). We had a general inspection contingency, meaning we were buying the house "as-is" but could withdraw our offer based on the inspection. In less competitive markets, the norm would be to have a regular inspection contingency, and make the seller pay for any needed repairs, but the norm here is to actually waive the inspection completely in your offer. Our inspector was generally happy with the condition of the house, but found a small patch of water damage in the basement. It seemed to be concentrated in one small area, so we weren't too worried about water issues in the basement (KNOCK ON WOOD). This inspection was also after weeks of severe thunderstorms in DC, so we felt pretty confident that if the basement hadn't flooded under those conditions, it was pretty solid. We also had a termite inspector, but waived the radon inspection, mostly to save money. After we moved in, we had a contractor look at the basement, and he determined that the way the deck was built was funneling rainwater to that particular wall. So we had someone add flashing to the bottom of the deck, and repair the drywall in that section of the basement. The deck itself definitely needs some touch-ups and modifications to better stop rainwater from coming into the house, but I think the main issue is fixed.
There was a long list of other fairly minor things that the inspector found that we planned to do right away- like getting rid of the rust on the outside window sills and re-sealing them, but we just haven't. We tried to get as much done as possible before moving in, and during the first few weeks, because I knew we would lose momentum soon, and we did. It's just really unpleasant to spend all of your weekends doing tedious things like rust removal, and if it's not pressing, it's just not happening.
Appraisal
The other big thing during this time is the appraisal (about $500). You can't get a loan for the sales price of a house if it doesn't appraise for that price. So, if it appraises for less than you bought it for, you need to cough up the difference in cash, or the sale will fall through. Again, many people in DC simply write this contingency out of the offer and pay the difference in cash- which is often necessary when there are bidding wars and the comp sales haven't caught up. But we didn't have any extra cash, so we needed the house to appraise, which it did- I think for about 7k more than the sales price. I think this whole practice is really fishy and subjective and just a way for another third party to make money in the process, especially because the assessor knows the sales price, and often properties are assessed at exactly that price. What a coincidence!
Other Annoying Stuff
We also had to pick a home insurance provider, which was relatively painless. Much of my time at work was spent downloading bank documents, printing, signing and scanning documents, and emailing back and forth with the lender. Jason and I filled out our mortgage application in the lobby of my office building so that we could scan and email it back the same day. There was a lot of urgency, although I'm not really sure what was happening on the back end, any why it took 30 days. I felt lucky during this whole process, including the search, that we both have relatively flexible jobs. I cannot imagine two surgery residents trying to purchase a house. So much had to be done during the day, in person, and with a tight turnaround.
The day of the closing is when the buyers, sellers, their agents and lenders, and the title company, all sit together in a room and sign reams of papers. I can't remember what most of them were, but they sounded legitimate enough at the time. It was the first time we met our lender. Our closing was really pleasant- we knew the sellers already (my co-worker, by chance), their realtor told funny stories about her pet baby goat, and there were bakery treats and sparkling water. A good deal of effort had been put into making it seem like a casual meeting where no one had hundreds of thousands of dollars at stake.
One thing I am still surprised about is how much money we were approved for. We are both public sector employees, and Jason is buried in student loan debt, so I thought we were going to be limited in our choices by the amount we qualified for, even if we felt we could afford more. Isn't that what you hear in the news? Not so- we limited ourselves by the amount we felt we could afford monthly. (To be clear, the amount we qualified for is less than what most houses sell for in DC.) This house was at the very top of our budget- our monthly housing expenses (with utilities) have roughly doubled- and it was a good 75-100k less than the maximum we could have borrowed. This seems sort of insane to me. In addition, I never thought about utilities! The last time I paid utilities was.....never- so this was just not something I really thought about. It turns out they are really expensive! I think our first home improvement project will be to add some insulation.
Anyway, the sellers gave us a key after the closing, but stayed on as tenants in the house for a couple more weeks. During that time, they hosted a party for us to meet the neighbors, which was really, really nice of them, and which I appreciate more and more as I sit on my porch and talk to the people who walk by.
The last official thing is the walk-through to make sure the house is in the same condition after the closing as it was during the inspection. One scary thing during our walk through was that the house was FULL of HUGE flies! The seller assured us that it was because they had left the doors open for several hours during the move, and the house didn't have a bug problem. I mostly believed them, because this was our fourth time in the house and we had never seen any bugs, but I still was panicking about it. But, we bought a bunch of fly paper and soon the house was mostly bug-free, thankfully.
A few weeks later, we moved in, the shootings happened, and I lost my mind, but we're past all that now. Right?
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