House buying question..1 of 200 I'm sure...

emilye2 · #1 10/08/2007, 08:49 AM

Okay-so in determining the value of the house my father had an appraisal done. Now that we have financing they want another appraisal done. They said they can't take the original one that was done. Is this usual?

crp · #2 10/08/2007, 08:51 AM

The bank will want to have their own appraisal done (which you have to pay for).

emilye2 · #3 10/08/2007, 08:57 AM

yeah, that's what I was afraid of. sigh...AND WHY IS TODAY A STINKIN HOLIDAY?! What did Columbus do that was so special anyway?! I want to buy a house and all the stinkin' banks are closed. sigh.....

BrianD · #4 10/08/2007, 08:58 AM

Home buying is not for the impatient. It takes forever.

der_wille_zur_macht · #5 10/08/2007, 09:03 AM

Quote:

Originally posted by crp
The bank will want to have their own appraisal done (which you have to pay for).

Yep, this is SOP. You'll find that the bank will want to do lots of things their way, and make you pay for them - just part of the cost of business. Depending on the bank, your credit, and the particular house; they may want an appraisal, a home inspection, a pest inspection, and of course a deed search. That's why you see loan adds on TV advertising no appraisal fees, etc.

If it's an FHA loan or the property's value is marginal compared to your loan amount, they may get stupidly picky about things on the house - peeling paint, missing handrails on stairs, etc. Basically, they want to make sure that if you go belly up and they can't collect the mortgage, they'll be able to quickly sell the house to make up the difference - so they'll complain about anything that would prevent that from happening.

der_wille_zur_macht · #6 10/08/2007, 09:04 AM

Quote:

Originally posted by BrianD
Home buying is not for the impatient. It takes forever.

Definitely. I bet less than 50% of home sales close on the originally selected closing date, due to all sorts of crap the banks drag people though.

Of course, given the recent happenings in the mortgage market, it kinda seems like a lot of banks weren't really doing a good job at that at all. . .

emilye2 · #7 10/08/2007, 09:25 AM

well I'm more of an impulse buyer by nature so this is just torture for me.

crp · #8 10/08/2007, 09:28 AM

Quote:

Originally posted by emilye2
well I'm more of an impulse buyer by nature so this is just torture for me.

The bank will have you jump through a bunch of hoops and then the lawyers will get you!

BrianD · #9 10/08/2007, 09:29 AM

I don't know why lawyers would get involved in a normal closing.

emilye2 · #10 10/08/2007, 09:31 AM

the only lawyer here is the one handling the estate. But it's not that bad really because they had the will set up so he had lifetime use of the house, but upon his (my grandfather's) passing it transferred to the siblings.

der_wille_zur_macht · #11 10/08/2007, 09:32 AM

Quote:

Originally posted by BrianD
I don't know why lawyers would get involved in a normal closing.

'Round these parts at least, it's common practice for both parties to have a lawyer involved in the closing. I can't tell you why, other than as a security measure to make sure the paperwork is in order and no one signs something stupid.

Plus, how many "normal" closings are there, really? I bet a good percentage end up with some sort of contingency or other weird item that falls in to the legal domain.

dkh0331 · #12 10/08/2007, 09:34 AM

Quote:

Originally posted by BrianD
I don't know why lawyers would get involved in a normal closing.

Baby needs shoes. Thats why.

crp · #13 10/08/2007, 09:34 AM

New York is an attorney closing state. Em will not be required to get her own attorney if she doesn't want to, but the bank will and Em will have to pay them.

The seller's attorney will prepare the deed and ancillary documents. The seller pays for that. If Em chooses not to get her own attorney, the bank may charge her an additional fee in addition to their bank attorney fee.

In addition, Em will have to pay for title insurance which insures the bank. If she wants a policy to insure her, that'll cost her more, but at a drastic reduction if she gets them at the same time.

emilye2 · #14 10/08/2007, 09:43 AM

Wait Carrie-I was with you and nodding right up until the policy to insure her part. Title insurance (with interest) was on the GFE but what's this about a policy?

BrianD · #15 10/08/2007, 09:44 AM

Glad I am not in New York.

Scuba_Dave · #16 10/08/2007, 09:48 AM

My 1st property I had a lawyer, and the fees were 5% of the cost of the house!!!!
Oh...but the house was $23,600

When I went to refinance once I had a mortgage broker mess up, so I dropped him. New broker wanted another appraisal.....at that point I was "in control", want my business? Then take the existing appraisial - which they did

crp · #17 10/08/2007, 10:01 AM

Quote:

Originally posted by emilye2
Wait Carrie-I was with you and nodding right up until the policy to insure her part. Title insurance (with interest) was on the GFE but what's this about a policy?

Em, not sure what you mean by "with interest". Title insurance is regulated by NYS and are set fees based on mortgage amount and purchase price. You will pay mortgage insurance which is different than title insurance. Title insurance insures the bank against any unknown title problem that could arise in the future, for example, an unrecorded deed.

You have to pay for the title insurance to insure the bank.

For example - mortgage amount is $100,000, the loan policy is $603.00. If you purchase an owner's policy (based on $100,000) the total of both policies is $795.00 (an additional cost to you of only $192) but if you decide to purchase it at a later time, you would pay the original $603 and then $614 for your policy. Unless there is something questionable in the title (like a foreclosure) we usually don't recommend buying the additional policy. Keep in mind the above figures are for my county, I can figure out exact figures if you pm me your county, mortgage amount and purchase price. The bank will most likely require endorsements that are about $25 each.

Niven · #18 10/08/2007, 12:07 PM

Quote:

Originally posted by Scuba_Dave
My 1st property I had a lawyer, and the fees were 5% of the cost of the house!!!!
Oh...but the house was $23,600
When I went to refinance once I had a mortgage broker mess up, so I dropped him. New broker wanted another appraisal.....at that point I was "in control", want my business? Then take the existing appraisial - which they did

Appraisals are the property of whomever orders them. Your original appraisal was your original broker's property. They can be assigned over to a new lender, but that can be a pain to get done as you need permission from the original lender.

Each lender may have lists of appraisers that they can and can not use also. There is a well known company that has closed in the last few years that was purposely lending on inflated appraisals (appraisers appraising a lot higher than they should be for their own profit) and now other lenders are trying to help these individuals out of these loans.

Niven · #19 10/08/2007, 12:11 PM

Quote:

Originally posted by crp
Em, not sure what you mean by "with interest". Title insurance is regulated by NYS and are set fees based on mortgage amount and purchase price. You will pay mortgage insurance which is different than title insurance. Title insurance insures the bank against any unknown title problem that could arise in the future, for example, an unrecorded deed.

You have to pay for the title insurance to insure the bank.

For example - mortgage amount is $100,000, the loan policy is $603.00. If you purchase an owner's policy (based on $100,000) the total of both policies is $795.00 (an additional cost to you of only $192) but if you decide to purchase it at a later time, you would pay the original $603 and then $614 for your policy. Unless there is something questionable in the title (like a foreclosure) we usually don't recommend buying the additional policy. Keep in mind the above figures are for my county, I can figure out exact figures if you pm me your county, mortgage amount and purchase price. The bank will most likely require endorsements that are about $25 each.

I'm sure title insurance is different in each state, but in Wisconsin the borrower pays for the Lender's Policy (here about $175-225), the seller pays for the Owner's Policy (here $3-6 per thousand).

andycook · #20 10/08/2007, 12:44 PM

We just had the closing on out new (to us) house. We swapped houses - we bought the house of the people who bought ours. The closing went very fast but I question the need for the lawyers at the closing and even the real estate agent. Seems like our bank handled most of the paperwork for us. The realtor handled so little that I think I can do it myself the next time.

crp · #21 10/08/2007, 12:51 PM

Em's is in NY.

The bank will order the appraisal, she will pay for it, and she is entitled to a copy of it.

Title insurance is required by the bank. Owner's policy is optional. Buyer pays. In rare occassions, because of title issues, it can be negotiated that the seller pays for the owner's policy but doesn't happen very often.

Realtors do the work to get a contract signed. They come to closing to get paid.

Attorneys do the legal work prior to closing and should explain all bank documents to borrowers.

Banks attorney prepare all the docs, record the docs and disburse the money.

Niven · #22 10/08/2007, 02:11 PM

Appraisals are still property of the lender. Fannie Mae lenders will not close on an appraisal that isn't in their name.

Attorneys are not worth paying for in Wisconsin. The title company does the closing and signing. All the documents cannot be changed by an attorney anyway. Everyone I've seen at a closing pretended to read the documents and waited to get their check. Realtors are not needed at the closing either, but if I ever wanted to sell my house in a timely manner, I would use a realtor.

batguano · #23 10/08/2007, 03:45 PM

Quote:

Originally posted by BrianD
I don't know why lawyers would get involved in a normal closing.

Just a little thing called ensuring that clear title is conveyed, that's all. You know, making sure that what you have contracted to buy is what you are actually buying and that your soon to be new neighbors aren't encroaching on your land. You know, that and making sure that the mortgage that you will be paying for the next 30 years is properly prepared and executed, stuff like that. But what do us lawyers know? We're just a bunch of money sucking parasites that hang around waiting for something bad to befall our fellow human beings so we can take advantage of them. That's why I like the job so much, because we are superfluous and opportunistic.

BrianD · #24 10/08/2007, 03:49 PM

Actually, that is what I assumed the title search and title insurance was for.

batguano · #25 10/08/2007, 03:52 PM

Yes, but your title company only insures the conveyance and if they find encroachments, they exclude them (exception) from the policy. They won't enforce the sales contract and make the other side clear title. That's one of the things the lawyer does.