"Right down to the wire"
That's exactly what it seems like. Everything is down to the wire. Do you know why that is? It's because the backend of our economy is inherently broken at its core. Little things where consumers have no control over what's happening result in a major downfall.
A home purchase is likely the largest consumer-centric investment you will ever make. In some ways it's not only life altering, it also is extremely risky. There are numerous factors that can affect you the moment you close on a house. You could lose your job (either via layoff or straight firing, or the closure of the company). Your income could decrease (I think some states have laws against that unless the job merits it). You could even experience a further decrease in the value of your home during these times. It's always a risk, always a gamble.
Therein comes anticipation.
I started my home search in April. That's right, April. I'm just now at a point of nearing closure, and even now it's still not a guaranteed deal, because everything substantive is happening on the weekends when the banks are closed. I'm forced to cross my fingers and hope that things stay exactly the way they are right now, until tomorrow so my broker can get a snapshot of the true way things stand with me. For the record, here is my checklist:
- Financing: secured, but then changed, the rates changed, the first lender could not offer the buying power I needed, DTI issues, etc. Think I finally sorted it out, but it will take time to get to a point of confidence.
- Finding the home: This was the bulk of the time spent. At first I was looking in surrounding areas like Temecula and Murrieta, but the inordinate increase in gas prices has made those areas not as feasible, even though they are visually superior in quality. I had to also wait for home prices to decrease even more in select areas, and even then the area I desired the most refuses to depreciate fast enough (Rancho Bernardo). I'll have to sacrifice my 15 minute morning commute for a much more stressful 35-minute commute, but whatever...I've got SIRIUS.
- Placing offers on homes: Short sale process is broken. Period. Banks should be required to reply to every short sale offer from buyers within 15 calendar days. There's a house on short sale out on the MLS, I put an offer on back in May. The banks ignored my offer and went with another guy and has been sitting at Backup Offer ever since. Placing offers on foreclosures is a bit more sane, but out of control, as investors are essentially falsifying the nature of the purchase in order to scoop up cheap properties to flip when everything rebounds. There needs to be more regulation of these types of situations. If they already own a home, they should be put lower on the priority list than those that do not.
- Consumer credit: This is the worst of them all. Your credit report can be literally pristine yet your credit score remains in the 600's because you don't have any tradelines that exceed 2-3 years. What's worse, any creditor, even if they know it's false, can report negative information to your credit file any time they please, and you can do nothing about it except try to work it out or dispute with the bureau...of course the dispute taking over 30 days makes that not a viable option when you're buying a home. That's what happened to me - pristine record, then right when I place an offer, some invalid collection account shows up and I have to fight tooth and nail to get it removed. Fortunately for me, I was able to call in a few favors to expedite the dispute process, but not everyone has such contacts.
- Cash on hand: When you're living in a state that does not ream you on taxes and fees and everything else, it's quite easy to save money. But when you're living in a place that takes your money any way they can, it's just not that easy to save, and even if you do save to like a 401k, you're going to get nailed for taking it out. Your money. Just because you earned it.
