Our Hectic Week and Big Secret Revealed

Last week required a ton of work, so much so that I have not had much time to actually research things outside of our secret, and my blog has suffered from lack of useful information lately. I will try and summarize the past week as efficiently as possible, which might require multiple posts.

We receive daily listings of houses on the MLS meeting our search criteria from a Realtor, and there was a house that caught our interest recently. We decided to go and see it a week ago Sunday since they were having an open house. To make a long story short, the house was interesting, but not exactly what we were looking for in a new home. However, it sparked an interest in house shopping, so we started to pour through the MLS listings.

My wife happen to stumble upon a really interesting property online, but there was not a lot of information or pictures, so I called up the listing agent to request a showing. The next day, last Monday, we went and saw the house, and absolutely fell in love with it. The house had almost everything we ever wanted in a new home. Both my wife and I knew this could be our potential future residence, but could we really make a decision kind of out-of-the-blue like this?

The first major decision we needed to make was what to do with our existing home. We are currently back on the market for the second time, and even though we have cut the price far lower than our purchase price, we have not had much interest. It is unfortunate that I bought the newest, most expensive home in the area over 7 years ago, and now need to sell at a fraction of the cost, not even including improvements, when we have done nothing wrong. What I mean is we maintain great credit, pay all of our bills every month, etc. So my wife and I decided if we go for this new home, we will either drastically cut our price again to try and sell, or go the rental route since our area is pretty prevalent in that market.

Next, I started using my super sleuth engineering skills to find out as much as I could about the property. Luckily, it was a newer construction home, that was bank owned, and the people left it in remarkable condition. So from the initial look at the property, there was not much to be concerned with besides making sure it was where we wanted to live potentially for the rest of our lives.

Since the home is bank owned and already gone through the foreclosure process, we would be pretty much buying the home as is, and are responsible for all our own due diligence, and any potential repairs from an inspection, unless major. In other words, the bank does not provide any type of disclosure. So I called up the listing agent the following morning to ask about home association dues and other various questions, and he told me that they received an offer that morning.

OK group and refocus. Now we are in emergency mode, and need to make decisions fast, faster than we anticipated this whole process. Where did this factor into my master plan I had in my head? We work so hard to maintain great credit, and save, save, save for this moment, and now I am having to make a decision on a moments notice. So the majority of last Tuesday was spent getting pre-approval through our bank, as well as talking with who we thought would be our buyers agent.

Here is the first lesson we learned. We did not have a buyers agent even though we had an agent sending us daily listing, and had not fully made the decision to use one only because I am well versed in Real Estate, as well as I was hoping to be able to negotiate part of the listing fee since I was acting as my own buying agent. However, since we were shown the home through someone associated with the listing agent, and our Realtor we were proposing to use was not present, the showing agent now was our Buyer agent.

This could be a little confusing, as it still even is to me. So let me quickly reference and explain procuring cause. Basically what it boils down to is that the agent who showed us the home is automatically our buyers agent, since our Realtor was not present. What I was worried about was Dual Agency, where the listing agent represents the seller and the buyer. This is where we got lucky though because the agent who showed us the home was not the listing agent. We did not know this though until we arrived to sign the offer. Therefore, any questions we ask could be handled directly by our new buying agent, saving us from having to perform some of the digging.

So within two days of starting to look for homes, we were already placing an offer on one. Next came the pre-approval process through our bank. Luckily, I have a working relationship with my bank’s mortgage representative for the past several years, and they already had most of our information from last years pre-approval. So getting the pre-approval letter from our bank was not a problem. The only big decision required for the offer on the home was whether we want to go Conventional or FHA.

I am completely baffled why the heck the bank who owns the home would even care how we are funding as long as we have the credit history and are able to make the payments. However, it is what they required, so we complied and ultimately choose Conventional, which I will explain more about later once financing gets worked out.

So we submitted our offer and now we wait…

…except our Realtor calls back and says the bank is requiring pre-approval through their bank, Wells Fargo, ONLY, and that all of the submitted pre-approvals with the offers are not technically valid from either party making an offer. Here is the first painful part of the home buying process is all the unexpected things you can not predict no matter how much you research ahead of time.

What really pissed us off is why they did not telling us we needed to be pre-approved through Wells Fargo in advance? Wells Fargo also is the bank that owns the home. Even though we are not required to fund through Wells Fargo, we need their pre-approval because the bank does not trust anyone else. This sucks because it means another hard credit pull. I am hoping our scores are high enough that this does not cause a problem, but it is still unfortunate and a waste of everyone time. In the listing it said we needed pre-approval before submitting an offer. That is fine and understandable, but don’t come back later requiring a pre-approval through your bank after I just wasted half a day of both my and my bankers time to get our initial pre-approval letter. I am hearing lots of complaints with Wells Fargo that this is something they typically do and pisses everyone off.

Stay tuned for additional details…