How we finally bought our first house!

[Shane Woods]

This isn't a BP success story per-se but I thought I'd throw it out there.

My wife and I have been piddling in wholesaling for a couple years now.  I've worked with some investors handling their calls and leads. Learned a TON!

But we were just lowly renters for years and years. Saved some, not much.  We've managed our debt very well, and one day that call came from our landlord...

He wants to sell, we need to clean the place out so he can start showing it unless we want to buy it.

We talked about it and decided this isn't the best house in the world, but knowing what I know, we could buy our first house, under market, and not have to move.  It makes a great rental, I know because we've been renting it :)  win win, right?

So we told him ok, and I negotiated a below market sales price with him of $65K.

Went straight to my big bank mortgage guy, who took my financial info and ran my credit.  He told me we'd qualify for conventional for more than the seller was asking with 5% down and we wouldn't have to take my wife's erroneous credit report into consideration.  They were also going to allow me to negotiate seller paid costs into the deal (they didn't tell me how much...this matters later....), and they were going to give me a $1500 grant towards closing costs, plus another $750 in closing costs by taking a slightly higher interest rate.

So we went to the landlord/seller and negotiated $3750 in seller paid closing costs, and raising the sales price by the same amount.  I knew it would appraise so I didn't mind.  Wrote up the contract, took it to title company and the bank.  We know we're not going to have funds to close until after we receive our income tax return late feb - early march, and we tell him this. We set the closing date for March 31 just to be safe.

Bank mortgage guy jumps right on it, gets us a pre approval letter in about 3 days.  We think we're off to the races.  This is December.  

Then they come back and say "oh, we screwed up, you can't get that much from the seller on a conventional loan, sorry".  So we had to re-negotiate again with the seller down to $2077 of closing costs he'd pay and a handshake agreement to pay us the rest we agreed to after closing.  I'm not going into all the long and irritataing details between January and May 1, but let's say they ultimately DECLINED us after 5 months of jacking around saying it'll get done.  By this time it had already cost us another $2550 in rent, plus we had to do (2) amendments with  the seller raising the price and reducing his seller paids as compensation for extending closing. 

So Finally, I took some sound advice and went to a private mortgage lender (not a broker, they do their own loans then sell them).  Coughed up another $2K above where we thought we'd be for closing, plus all the extra we paid waiting around and extending....the lender closed the loan in 25 days.  25 days.  That easy.  

So lesson learned, go to a broker or private lender. We own our house, we'll drop the MI when we get to 80% LTV, and we pay $220 less per month than when we were renting. AND WE DIDN'T HAVE TO MOVE!!!