Price For Our First House
I’m not really sure whether posting about this is going to end up being a good idea or not; I get a lot of crap for posting our weekly spending already.
Seriously, how many people need to tell me that we should quit smoking or just complain about it in general? Of course we would save a ton of money and improve our health—I would be amazingly stupid if I thought otherwise. I do want to quit, it’s just not that easy. *Okay, my mini-rant is over, back to business*
So I’m crossing my fingers that I’m not going to regret this. 😉
List Price of House: $169,000
Our Offer: $170,000 with closing costs paid by seller (gave them 24 hours to decide)
I was always hoping to get our first house at a steal, you know all the negotiating and saving thousands of dollars, but it’s just not possible at this time in our area. I still feel like it’s a great deal for what we’re getting, where we’re getting it and the overall feel of the house.
Since Mr. Investor (the seller) already flipped our house, there really isn’t anything we “have” to do to move in. Of course, there are a few things we want to do to make it a bit more enjoyable, but if we can’t afford it, it won’t kill us to wait.
I didn’t want to go above $175,000, even though our lender said it would be possible to borrow a lot more. Who wants to get into a house and struggle just to pay the mortgage? Not me.
The seller accepted our offer and agreed to paying our closing costs, so we were pretty happy. It’s funny though, because we don’t know anything about buying a house. We’re still not really sure if this is going to work out right to where it’s ours. Our realtor (who is freaking awesome, by the way) sounds like it’s our house, so I’m feeling pretty confident about it.
Our first official cost of buying our first house was earnest money. I had no clue what in the world earnest money was, I still don’t entirely. Apparently when you make an offer to buy a house, you need to give money to the seller. Depending on what stipulations you noted when making the offer, you can receive your money back if you don’t buy the house.
Is this money gone forever? It sure feels that way for us, but it really depends on your lender. Our lender will not allow us to have our money back at closing, like some people are able to do. Instead, he said it will go towards our loan. That’s not so bad, but it sure would have been nice to have that money back to cover other expenses.
Total Earnest Money Paid: $1,000.00 (out of pocket)
Our realtor was going on vacation for a couple of weeks, so he worked really hard to get things moving before he left. He hooked us up with a home inspector who could come out the next morning (it was late evening when our offered was accepted) and send us the report a few hours later.
The home inspector guy was really nice and helpful, he even went above and beyond his job and checked out stuff he wasn’t required to check. He gave me lots of great advice and even tried to explain many things to me—not that I really understood what he was talking about, but that’s okay.
He was really impressed with the house and how little he was able to find. He said that we were getting an awesome deal and was really happy for us. He did find a couple of things that needed to be done, but just small things. Mr. Investor was still finishing things up and hadn’t replaced a few things, so we made sure to put that into the agreement thing. Mr. Investor agreed to make sure those things we done and that was that.
Price for home inspection: $330.00 (out of pocket)
We need to have an appraisal done to make sure we’re not paying more for the house than it’s worth. This can go a couple of ways:
1) The house appraises for the $170,000 we offered or more and everything goes smoothly.
2) The house appraises for less than we offered and we need to renegotiate the selling price with Mr. Investor.
The second one could get a little interesting. Let’s say the house only appraises for $150,000. If that happens with us, it would happen with somebody else. Lenders don’t want to lend you money to buy a house that’s worth less than you’re paying—just common sense.
So Mr. Investor’s options would be to renegotiate the selling price or hold out for somebody who wants to pay in cash. If somebody had the cash, I couldn’t imagine them wanting to waste it buying a house for way more than it’s worth.
So that’s not really bad, except for the fact that we want him to pay for our closing costs because we don’t have that much money readily available. Either we would have to borrow the money for closing costs or say goodbye to the house.
An appraisal was ordered yesterday, so we should find out soon; no use worrying about it now.
Price for Appraisal: $400.00 (out of pocket)
Up Next—Flood Plain Survey
Assuming the appraisal goes well and any issue is dealt with accordingly, next comes the flood plain survey. The flood plain survey appears to be standard procedure (and not just a USDA home loan thing) for all loans according to a few sources, but I’m not entirely sure.
Price: Unsure (we’ll just have to wait and see) <—- I’ll try to remember to update this after we pay for it.
Total out of pocket so far: $1,730.00
That’s a lot of money to me, so it’s really going to suck if we don’t end up getting this house now. I know we will most likely get the earnest money back, but still…what about the other $730.00?
How much did it cost to buy your first home?