The saga is over - Sis finally closed

[wincrasher]

As some of you know, I helped my sister buy a house. After many months of looking, she finally found one - a forclosure - that was priced right and still in great shape. 4 bed/3.5 bath, with bonus room and garage on 1/2 acre for $180k. Tax roll says it's worth $275k.

Yesterday they closed. Everything was done electronically, so the banks lawyer and realtor weren't even at the closing! One of the things I found funny about the whole thing - I ended up gifting them $45k for down and closing - all I had to provide was a "gift letter" saying that, yup, I gave them the money - that's it, they didn't care where it came from. If I were to have promised to gift it at closing, then that's a whole other matter - I would have had to provide complete financial disclosure, run my credit, proved where the money was coming from, the whole nine yards. By giving it ahead of time, they could have cared less if it came from my heroin trafficing operation, prostitution ring or my work with Arab terrorists!

I think they got a good deal on their financing with a local bank - 4.5%, 30 year fixed and they were given breaks on their closing costs because of her high credit score (her's dropped to 805 after the refi on their old house) - think they waived origination and some other fees. The lawyers fees were rebated because he is her FIL (some lawyers are not totally evil ).

I bought them new appliances as a housewarming gift to be delivered friday. She has some new furniture coming, and some workman in to do a few minor repairs, utilities turned on and cable installer coming.

Much to my surprise she made a very detailed list of every item needed for the house, estimated cost, and where it will come from. So far she is under budget. No items on credit, other than the mortgage!

[bjl584]

Sounds like everything went smoothly. I bet you are glad to have that behind you.

[Joan.of.the.Arch]

That's interesting about validating the gift toward purchase.

I remember that years ago years ago when I was learning about house-buying by reading books, the issue of gifts that would be used toward a purchase was addressed. At the time, that seemed like such a remote, unlikely circumstance---the idea that people might have someone giving them such big gifts. Well, now a little older and with much wider experience, I realize how naive I was. Even though I did what I could to educate myself about house-buying, I now look back and realize that my naivete could have been my downfall. I do think common sense, a little fear of taking on too much debt, reading every line of my contracts, and my "book-larnin'" mostly spared me any big downfall. But honestly, I think it could have gone otherwise. (I mean-- not likely, but possible anyway.)

I'm glad you were there for a new home buyer, not just for the money help, but for the smart advice you probably had as well.

Maybe every new buyer should have an extra person on their side.

[MonkeyMama]

Interesting on closing experience.

We bought first home in 1999 - very young. Interestingly, no questions about where we came up with 20% down (just graduated college - very expensive region). Truth is we had been saving for a LONG time. & saved 90%-ish of income out of college, until we bought. No questions that I remember.

Anyway, we were young and idealistic though. Bank wanted us to have more cash - and so thankfully my parents obliged. They have always been good for a 0% loan. So, we deposited $10,000 and they sent a letter to the bank. We paid it back immediately after closing. It seemed WAY overkill, but the lender kept saying "You will need to buy furniture." I had lived on my own for YEARS - needless to say - we didn't buy much of anything. With age - I do see how people tend to run through thousands of dollars with a move. We have never been *normal.*

@Joan - my friend is expecting a $100,000 cash gift for down payment (San Francisco - won't buy much with that down payment). Interesting thing - she is very frugal and in good financial straits. Parents have just done very well and have always been very generous with her (new cars, etc.). I know so many spoiled people though - it's nice to see a wise steward of such generosity.