Show me the money, especially all of the closing costs…
Vigilance is the watchword as you take each step through the home buying process. And while I keep harping that buyers need representation, an experienced buyers broker, it is with good reason. Every step should be deliberated and scrutinized.
I urge my folks to get a Good Faith Estimate also known as a GFE and have it faxed or emailed to me so we can go over it together line by line. This step accomplishes several things: 1. The buyers become familiarized with the sometimes confusing form 2. The buyers see all of the closing costs: origination fee, attorneys, survey, title insurance, tax service fee, recording fees, appraisal, inspections and the pre-paid escrow items: property taxes and 14 months of home owners insurance. 3. The buyers then can compare various lenders’ programs.
Why am I stressing the point? Because quite often a builder will offer to pay a certain amount towards the buyers closing costs if the buyer uses the builders preferred lender. And sometimes this actually costs more. So I always suggest still shopping around even if the builders contribution on the front end sounds like several thousands of dollars and looks like several thousands of dollars but actually isn’t.
And in the best of all worlds, I would make it feature of your purchase agreement that you see, have in your hands and your buyers broker hands, a copy of the official closing statement at least 24 hours prior to closing. How many families do you think are stressed when their belongings are in a truck, they have moved from their old residence heading towards the new house, and at the closing table, there is a big surprise. How do you head back when this happens? Get it in writing and be very clear with everyone including the closing attorney, the lender, the builder, that closing will happen when you have had 24 hours to look at every line…and further when all the repairs on the punch list are complete. Those are good reasons you need an advocate, a partner in the process.
Be careful out there. There are opportunities in this market especially in new construction but remember, there is no free lunch…and if per chance there is, be even more careful.
Lynnsy Logue is The Real Estate Lady® and Condo CanDo®, Charlotte, NC