Home Shopping....swallow pistol now

[gigag04]

Someone tell me that buying a home gets easier as you go along. My fiance and I decided we are going to buy a mortgage, I mean house, and this process is crazy. I'm wrapping up my life story for the mortgage underwriters now....

Hopefully we can lock in one of the amazing 4.x % interest rates.

This processes seems needlessly complicated...the whole title company, mortgage company, realtor, builder, tax man inside network is shady at best. There is a whole different language associated with this process to make sure all of these people get their cut. Makes me wonder how many unnecessary business models are kept afloat merely because of the confusion of home buying. Why is the MLS info so secretly guarded under lock and key? I'm looking at one of the pre-qaul deals for the mortgage and there is like a billion dollars in fees for different people along the way. The underwriter's fee is as big as the mortgage payment portion of the payment!!!! I need to switch careers.

(No offense AR - I actually appreciate our realtor who is a long time family friend. She, and our mortgage guy, seem like the only necessary pieces of this deal - they seem to provide a great value added service).

[Teamless]

Just wait till closing day, when you and your fiance' have to sign all those documents, you will run out of ink twice! (or so it will seem)

I think you are absolutely right, there are a lot of unnecessary people/steps in the way.
Good luck!

[dcphoto]

My wife and I worked with AR buy our first home, and he made the process understandable. Without him, I don't think we would've gone through with it.

We've decided that we are going to pay cash when we are ready to move into something bigger. Makes the whole process much easier.

[gigag04]

I only wish I was moving into Austin.

[ELB]

the first time, I went thru all the standard hoops, built a big mega-sized binder, tracked each detail, phoned the underwriters daily to make sure they were gettign all the inspections and whatnot --- major pain, but being obsessive about it at least kept the process moving, or it would have taken four months instead of six weeks.

Second time I skipped the realtors (actually, fired one and went on my own), found a place on our own, and paid cash. Made the process much simpler.

[A-R]

thanks guys for the kudos.

The process really is overly complicated on a lot of points, but most of those - IMHO - have to do with finance (which I still don't fully understand myself). And a lot of the complication has been added into the finance portion in the last few years to avoid the pitfalls of giving out money to every Tom, Dick, and Harry with a pulse. My old standard analogy of the mortgage industry is to a pendulum - it swung WAY too far toward being "easy" through most of the 2000s, and has now - again, IMHO - swung too far back the other way (needlessly complicated). Hopefully it starts to settle back into a period of historical normalcy soon.

As for the MLS, I'll freely (and publicly, at risk of being branded with the scarlet A by my fellow Realtors) admit that without the iron-clad lock we Realtors keep on proprietary MLS info, we'd all be out of work rather quickly. The MLS is the Holy Grail of residential real estate (not so much on the commercial side) and Realtors have been guarding it against all comers (mainly bankers and lawyers) for nearly a century now. It is the one truly convenient and ACCURATE way to gauge actual market value of real estate. And only Realtors and Appraisers have access to it. Even the tax appraisal office can't access it (which is why their tax appraisals are so often wrong). And we pay handsomely for it - nearly $1,000 per year for access to the ACTRIS MLS (Austin/Central Texas Real Estate Information Service - Multiple Listing System), plus the cost of training and continuing education to become a Realtor and a licensed real estate agent (only licensed agents/brokers or appraisers are even allowed to pay for access to the MLS).

The MLS is why big idea start ups like Trulia et al will never be able to replace Realtors. The bankers and the lawyers have tried to do so for years and can't compete with the wealth of proprietary info available in various MLS's nationwide. Even all the online availability of real time real estate listings only truly benefits Realtors - less work for us (most clients find the property online themselves first) but we still control the #1 most important data that has never been released on a publicly accessible web site .... what a house SOLD for, how long it took to sell, and how much did the sellers have to pay to get that sales price (seller-paid buyer closing costs, repairs, etc). Without that data, the true market value of any home is unknowable.

Of course, a good Realtor not only knows how to leverage all that information, but also how to negotiate a deal, how to compare wildly varying pluses and minuses of a particular property and/or deal, and how to navigate the aforementioned confusion of the whole process.

I look at it simply as your Realtor is your guide through the real estate side of the process, your lender through the finance side, and the title company is sort of the referee and legal checkpoint of the process (not to mention the all important title insurance). The others players in the process - builders, appraisers, inspectors, home warranty, etc are all important, but are merely "vendors" or "contractors" to the overall process.

[A-R]

GigAg, not sure where you are in the process nor what you're buying (new, pre-owned) so hard to say if it gets easier. Generally it does get easier once you pass the "pre approval" part of the loan process and the Realtor can take over and help you find the home, negotiate the deal and any subsequent repairs. Still not "easy" but this part of the process is where us Realtors earn our money so while the decisions are all extremely important (and can be difficult) at this stage, you should at least have someone (your Realtor) feeding you all the facts, analyzing the choices, and basicallly laying it out for you like the Joint Chiefs lay out a choice for POTUS. You just have to actually make the choice(s). That's another analogy I like to use - when my client is buying a home, they're POTUS and I'm chairman of the Joint Chiefs holding their hand through the entire process, giving them all the info they could ever need and then some, and then letting them make the choice.

[WildBill]

Congratulations on your new home. Whatever the hassles and paperwork, it sure beats the 11% APR that we paid on our first home. It does get easier. The mortgage for our first house was for $55,000. I thought we were signing our life away.

[A-R]

it sure beats the 11% APR that we paid on our first home.

the best Realtor instructor I ever had - who has been selling homes in Austin since the year I was born - told this great story of a young Realtor coming up to him frantic that interest rates were going to go up to 7% and how could they possibly sell any more homes?

He told her to calm down and that he'd sold more than 200 homes at interest rates above 17% during the "bad years" in Texas finance.

I think my step-dad's first house in Houston area back in the 80s was at 18%

Really amazing when you think about it that we've had rates below 6% for a very long time now.

[WildBill]

I think my step-dad's first house in Houston area back in the 80s was at 18%

Really amazing when you think about it that we've had rates below 6% for a very long time now.

And I am grateful for that.

[jimlongley]

My first mortgage, in 1970, was a couple of signatures, witnessed by a law judge (in this case a real judge) and was over in about 20 minutes, which included the schmoozing and chatting. My second time, in 1985 was a little worse, but boy have things changed since then.

[jimlongley]

BTW, my (then fiance) wife picked our first house because it had an EAGLE DOORBELL DECORATION!!!

[waynev]

I just boought my first home a month ago. No, it does not get easier.

[RoyGBiv]

Texas title insurance is a state sanctioned criminal activity. You can't buy a house without it (not with a mortgage) but the price is not even close to commensurate with the effort involved.

I bought/sold several houses in NC before moving to TX. For a similar sized/cost home in NC, my title insurance was $210, vs more than $2,000 in TX.... Outrageous.

All the other documents are pretty similar wherever you go...