The Before and After of Closing

We bought a brand new condo from a very high profiled builder last month. I wanted to share some of the surprises that we encountered during this transaction.

Both me and my husband were expecting some kind of stupid trick to be played on us by the builder before we closed the place. We had done some amount of research into identifying the cost of buying and maintaining our house. We did very extensive analysis when we shopped around for mortgage. We had 30 days to close the place. Since we were living in a rented place where the lease ended first week of December, we wanted to stretch the closing as much to avoid paying both the rent and the mortgage.

THE BEFORE:

The builder had his preferred lender and we had to put down a loan application through that lender irrespective of having pre-approved by another lender. We went through the process, but at the end of the day, we got a better offer from our previous lender. We informed the builder’s preferred lender that we are going with another lender. After all this the builder’s preferred lender sent his loan papers to the escrow company. We were disappointed by this. Thankfully the escrow company called us to make sure which loan document they should use.

We had an initial walk through of the property, suggested a few fixes and did the final walk through. During these times, the customer representative was really nice. He told us that he would be doing another inspection 10 days after we move in. So we had another chance to fix anything else we identify.

When we finally went to the escrow company to close, there was another surprise waiting for us. We heard for the first time that we needed flood insurance. And that it would cost us another $1000 per year. Before we bought the house, we enquired with the sales person and he assured us that we didn’t need flood insurance. According to the FEMA maps, the area required flood insurance. But since the builder had raised the building above flood levels, they had filed for the non-requirement of flood insurance. We couldn’t find out if the request was disapproved or if the FEMA maps weren’t updated. The catch was, the preferred lender does not require us to hold flood insurance. Since we went with another lender, they went by the FEMA maps and we had to have flood insurance to obtain the loan. Long story short, we somehow got the builder to say he will take care of the first year’s flood insurance premium.

THE AFTER:

We were supposed to be waived the loan application fee if we signed up for automatic payments. But the loan application fee was billed to us during closing. So we receive this closing balance sheet (obviously after closing) and we see this. When we call back to enquire about this, all we receive from the escrow office is monosyllable answers to our questions and emails. The same happened with the flood insurance also. We are paying the premium out of our pockets. We are still trying to resolve this with the builder and the lender. At this point, it is not about the money. It is about doing the right thing.

We got the keys for the place and there was an inspection scheduled by the city to remove a small part from the stove as per city regulation. When the guy pulled out the stove, we saw that the anti-tipping bracket was not installed at all. This is another requirement since we live in a earth-quake prone city. We also noticed that the backside of the stove was bent. The front looked nice and polished. The story goes something like this. They installed the anti-tipping bracket in the wrong location. The stove legs did not fit in there. So they bent the side of the stove to try and fit it with no success. When we asked them about this, they just simply brought a stove from another unsold unit and replaced ours. I don’t know how somebody would identify something like this during their home inspection walk-throughs.

Nobody called to do the 10 day inspection. We are paying the flood insurance premium till date. We haven’t received the loan application fee back.

So the moral of the story is, there are 2 groups of people when you buy a house. One group consists of the builder, lender, escrow, customer support and the other group consists of the buyer and buyer only. Beware of the home buying process!!!