Buying a house, the American way

On the 14th October 2011, our offer was accepted on The Dream House.  That was 27 days ago.  In 6 days time we get to pick up the keys and call it home.

(Sorry, I'm such a brat for constantly showing this photo!)

The process here is just so completely different (and so much more efficient – not necessarily better, but definitely faster), that I thought I’d make a few notes on what’s been going on in the last 27 days.  Probably a timeline would be the easiest way to show this – more for my own benefit, as I will never remember any of this once we’re in!

So, here we go.  It’s probably worth remembering that we arrived in the US on Wednesday 28th September!

Tuesday 4th October – We applied to the mortgage company for “pre-approval” on a home loan.  You cannot make any offers on a house without already having pre-approval in place.  Well, you can, but you would be in a much weaker position – as newcomers with zero credit rating, we need all the bonus points we can get!

Thursday 6th October – I spent the day with our realtor, Jenny, looking at dozens of houses all over the Eastside.  Well, 17 houses in total, if I’m being honest.  The Dream House was one of them.  My comments (I made notes as we went along) on the spec sheet say “Beautiful – love, love, LOVE it!!”.  I suspect that Damyan’s choice in the matter may have been limited from this point on.

Saturday 8th October – Jenny takes Damyan, Evie and I back to revisit all the houses that I shortlisted from Thursday.  This included the beautiful blue house, just around the corner from Hunters Glen (location of The Dream House):

I love the front porch on this house – I could totally see myself sitting out there with a glass of cold white wine, nosing on all the neighbours on a summer’s evening!  Sadly, this one didn’t make the cut, because the family room was completely separate to the kitchen – so I wouldn’t be able to keep an any on the little monsters darlings, while I’m chained to the kitchen sink!

We also obtained approval from the mortgage company today.  Wow – that was quick work! 

Wednesday 10th October  – We made our 2nd visit (3rd for me) to Hunters Glen, just to make sure we really did love it.  Damyan still can’t quite believe that we can actually afford to live in a house like this, so he wanted to make sure there weren’t any major faults that we might have overlooked before!  I think I’ve forgotten to mention that the family selling the house have already moved out, so it’s currently filled with some of their own furniture, and some of it cleverly “staged” by their realtor.

We wandered round the garden, opened all the cupboards, sat on all the furniture (some of it, it turned out, was fake!  Collapsing beds…it could only happen to me!), and then – da, da, daaah – we asked Jenny to make an offer for us.  And here’s where everything kicks into overdrive.

Jenny sat down with us (while we were still actually in The Dream House), to help us agree on an offer, and what that offer would entail – i.e. $ value we would pay for the house, what our initial holding deposit would be (the so-called “Earnest Money”), and which items should be included in the sale, such as appliances, warranties, fixtures & fittings etc etc.  So, we offered $20,000 below the asking price, threw in $15,000 in Earnest Money, enough to show that we were serious buyers, asked them to throw in the washer, dryer & fridge/freezer, and named a closing date of 16th November.  Jenny then dashed back to her office to write everything up into an official Purchase & Sales Agreement, while Damo went back to work and Evie and I mooched around Bellevue, killing time.  A few hours later, at around 5.45pm, we met Jenny again – she kindly drove out to the Microsoft office to speed things up – to check all the paperwork, and sign / initial every one of the countless pages.

I should mention that throughout the entire process, the only people we have dealt with have been Jenny, our realtor, and Chuck, our loan officer with the mortgage company. There are no solicitors involved on either side – which might be the reason that things move a lot faster here.  Can you imagine your solicitor driving all over Sussex at 5.45pm to make sure that your paperwork gets in on time?  And then meeting you at  the weekend to go over the next steps, timescales and what to expect in the coming weeks?

The house had only been on the market for 10 days, and there was an Open House planned there for that Saturday and Sunday.   So imagine our surprise when, at 9.30am on Friday 14th October, we heard that our offer had been accepted, no questions asked.  In fact, written acceptance had been sent to Jenny the night before, but she hadn’t been in the office to receive it.   Apparently the Sellers had been swayed by our early proposed closing date, though though they asked that we “not be too picky” when we got the Inspection Report back!

In the US, once you have Mutual Acceptance in place, the Sellers cannot back out of the agreement unless the buyers break the contract (i.e. miss set deadlines for any step of the process).  So there is no gazumping here, no fear that, although the offer has been accepted, someone else could still pip you to the post, no matter how much you’ve spent on solicitors and surveys.  There is also no risk of any delays along the way – if anyone misses their deadline, there are big financial penalties involved.  For example, if we had been a day late in arranging our inspection, the Sellers could have pulled the plug on the whole thing.  And we would have lost our Earnest Money.  That’s enough of an incentive to put the wind in everyone’s sails!

Wednesday 19th October – Inspection Day!  We met with Jenny and Mike, our home inspector.  Jenny brought a quart of cider (sadly American style cider – i.e. basically apple juice) and a tub of oatmeal cookies, while Mike took us on a tour of the house, pointing out every tiny thing that was wrong with it.  I tried very hard not to freak out at the many references to “rodent activity”.  The whole inspection took well over 3 hours, and Mike could not have been sweeter.  He spent quite some time showing me photos of his new granddaughter on his phone, along with several of his wife cuddling their huge Great Dane on the sofa.   Like I said, super sweet, and maybe just a little bit mad.  Or “eccentric”.  Let’s say eccentric.   That evening, Jenny requested an extension (we officially had until 9pm on Wednesday to complete our inspection and provide our response to the Sellers) so that we could get some specialists in to look at the areas of concern and provide us with a quote.  This is so that we have a bargaining tool, and can ask the Sellers to either get the work done themselves before closing, or provide us with the money for us to sort out once we’ve moved in.  

Thursday 20th October – After a frantic time trying to get money from our UK bank account to our US one in time, the Earnest Money was deposited with the real estate agent on time for today’s deadline.

Sunday 23rd October – Tom, “the wood guy”, who also seemed to be a general all-round Mr Fixit, and Victor, the drainage specialist came out to take a look at the various bits and bobs raised by Inspector Mike, and to provide us with a quote for fixing it all.  Despite it being a Sunday, they both spent plenty of time there – for poor Victor, this involved donning a suit not dissimilar to those seen in movies like  Outbreak, and crawling around under the house, amongst the rat faeces, standing water and mouldy insulation.  Nice way to spend your weekend.

They both provided us with their quotes that very evening.

Tuesday 25th October – Jenny sent our Inspection Response form to the Sellers’ realtor.  This is a list of things that we decided were reasonable to ask the Sellers to either get fixed, or pay us to fix, along with the associated quotes.  We basically went for the crawl space under the house (which was found to be very damp, with poor ventilation and an active rodent infestation – so it was full of rat faeces and lots of the insulation material had been destroyed and taken as nesting material), and some other carpentry work needed around the exterior of the house.  We also asked them to remove a tree in the garden which is quite clearly quite dead, and likely to fall either on Evie’s swingset or on the house if the wind blows too hard one day!

For the next few days, there was some back and forth, while the Sellers tried to argue that the tree had been dead for 10 years and hadn’t done them any harm at all.  In fact, they are clearly quite attached to their dead death-trap in the back garden, as detailed in the email they sent:

“While an inspector sees a dead tree that could fall, we actually experienced a place that was home to owls, woodpeckers, and bluebirds. It’s also completely hollowed out, I think, and so would just crumble if it fell.  I suggest the Peppers live in the house for a bit before they decide to take it down. They may come to love it as we did.”.

I love the “I think” part of the very convincing assurance that the tree would just crumble if it fell!  It’s worth mentioning that we did get an arborist to look at the tree, and he was quite horrified.  He wouldn’t even let Evie anywhere near it, and basically said that it was highly irresponsible to a) have that tree at all and b) then let children play in the same vicinity as it.   So, it’s got to go, and the Sellers, sadly, will have to pay for it.  I really hope they aren’t crying into their dinners as we speak, bemoaning the very sad fate of their beautifully grey, dead,  hollow, wooden stump.

Still, it will make for a nice fire in the family room!

Wednesday 2nd November – The Appraisal report arrives from the mortgage company, and we also receive notification that the Sellers have signed off on the final paperwork – so we are now officially “Pending”.  This means that all the Ts have been crossed, all the Is dotted, and now we just need to finalise the financial side of things, which is entirely the responsibility of the mortgage company.

Tuesday 8th November – The mortgage company emails to let us know that Underwriting has now approved all of our paperwork (our bank statements from UK and US, payslips, P60s etc), and that the only thing left to do is for them to work with the Escrow company to calculate the final cash to close figure (i.e. the frightening amount of money we have to pay to make up the shortfall between the mortgage and the price we offered on the house, plus all the associated fees and costs).

Thursday 10th November – The escrow company gets in touch to make an appointment for us to go and hand over our hard-earned cash.  This is the final hurdle – once the money has changed hands, we just have to sit tight and wait to get the keys.  The appointment is made for tomorrow, Friday 11th November.

Jenny then called me this afternoon to say that she’ll be coming with us to the meeting – it’ll be so nice to have a familiar face there, in the midst of a process that is so completely unfamiliar to us.  Even the term escrow itself – I’d never heard of it before!  Curious?  “The escrow company’s job is to act as a neutral third party for both you and the seller.  They hold all of the money that you provide and the clear title that the seller effectively provides by signing the contract.  They make sure that all the terms of the contract are met and that everyone gets paid what they are due.”  So I suppose they do some of the job that your solicitor would do in the UK, except they act for all parties.

So, as of tomorrow, that’s everything done and dusted, and we just have to wait until the originally agreed closing date of 16th November 2011 until we can call The Dream House ours.  So, theoretically, we could have moved tomorrow. Exactly 4 weeks to the day since we made our offer.  I think this calls for another sickeningly smug photo!

How'd you like our living room, huh?

Oh go on then, just one more!  Come on, you would sit on that bed too, wouldn’t you? It certainly looks real to me.  You would never suspect that it might collapse in a heap underneath you….

See that en-suite bathroom? There's a walk-in wardrobe in there!!! Just call me Carrie Bradshaw. And then give me enough money to fill it with Manolo Blahniks. Pretty please?!?

So that’s it!  We’re (almost) homeowners again, and can’t wait to start our new lives properly in Hunters Glen.  Please come visit us – there’s plenty of room, and we’ll only ask you to babysit on days ending with a Y!!