So here is the deal our house in Maryland has been on the market since February. Within a couple of weeks, we received an offer and the house went under contract.
The day we were supposed to close we needed up extending the contract by two weeks. Then 2 weeks later on the day we were supposed to close they told us that they couldn’t get financing because they changed jobs.
Say what?!? Yep they changed jobs while under contract to buy a house!!
I thought everyone knew that changing jobs was not something you should do while trying to buy a house. Sadly not everyone knows this and not all realtors remember to inform their buyers! Side note if you want a good realtor in Utah my dad is awesome!
If you are in the process or soon will be in the process of purchasing a house here are a few things you should know so you don’t lose the house you want or your earnest money.
5 Things to Know When Purchasing a House
1. Do Not Change Jobs
The financing of your house is based on your income so changing jobs while in the process of buying a house is not a good idea.
If you are going to change jobs do it a couple months before you plan to move and base your financing on that income or wait to change jobs until after you close on your house.
2. The Mortgage Company Tracks Your Bank Account
Don’t have unexpected money showing up in your bank account. All of the money in and out of your account needs to be accounted for.
If someone is gifting you money for the purchase of a home have them deposit the money a couple of months before you start seriously looking. If you deposit gift money once the finance company is tracking your account then whomever gives you money will have to sign a document stating the money is a gift.
3. Home Inspections
Home inspections are an important part of buying a house. This inspections give you an idea of the condition of the house and let you know if there is anything you should be worried about.
Something important to know is that home inspections are from the walls out. You don’t own the home so the inspection is only inspecting what is visible not what is behind the walls.
4. The Home Buying Process Protects Buyers
Once you are under contract to purchase a home there are several ways you can get out of the contract without losing your earnest money. You can back out for any reason before your Due Diligence deadline and get your earnest money back. If you back out due to issues with a home inspection or appraisal you will also typically get your earnest money back.
If all of your deadlines to back out have past and you decide not to purchase the house. Then the seller should get your earnest money.
We recently had a realtor tell us that its “Bad Karma” to keep the earnest money as the sellers of the home. I disagree for a several reasons.
First, we took our home off the market for weeks because you were going to purchase it. So no one else was able to look at our home or make an offer.
Second, if you back out after all of your deadlines we still have to pay the mortgage on that property as well as utilities and other expenses. You walk away but you do lose that earnest money.
And finally the whole process protects the home buyer. Once we are under contract the seller can’t just say he doesn’t want to sell you the house. The home buyer on the other hand has several opportunities to walk away.
5. Earnest Money Should be 1%
If you are really serious about purchasing a house then put down 1% of the cost in earnest money, especially if the house is $250,000 or less. It’s not that much money and it will go toward your closing costs. Be sure to talk to your realtor about how much earnest money you should include with your offer. From our experience, 1% is a good place to position yourself as a serious buyer.
BONUS: Get a Realtor
Find a realtor to help you through the process. It’s so much easier to have someone that knows and understands the contracts there to help you and answer your questions. Do some research before deciding on a realtor. You definitely want a realtor that is good with communication.
Save this post!
