Friday, August 20, 2004

Reviewed the townhouse again last night. There’s a lot to be done.

For those unfamiliar with the process, here’s a quick overview of the steps required in buying a home:

1. Look for homes that are being sold. You can do this through an agent, or not. The standard trade-off applies: If you use an agent, you have have to pay him/her fees when you “close” (more on that later), but the agent does a lot of footwork for you, finding homes within your price range, talking to the homeowners, etc. My agent was great, and well worth her commission. I just told her when I could go looking, and when I arrived at the office she’d have a list of a dozen properties that matched my criteria. Cost: None.
2. Visit homes that are being sold. At this point, you’re looking at major factors: Is it big enough? Do the appliances look new or old? Do you like the layout? You’re not inspecting the plumbing under the bathroom sinks. Cost: None.
3. Put a contract on a home. This is not purchasing. This is essentially a document that prevents the seller from selling the property for the time being. It’s a way for the purchaser to state his/her intention to buy the property. The buyer can still opt-out later. If you’re going through an agent, the agent will charge you fees to set up the contract. In my case, it was $3,000.
4. Buyer Walkthrough. The buyer “walks through” the house, almost always with an accredited home inspector. The inspector’s job is to inspect everything in the house, from the insulation in the attic to the heat pump in the basement, in detail. Ideally, the inspector will explain every test and result to the buyer during the walkthrough. Either way, the inspector then gives the buyer a complete list of “walkthrough items” that needs repair or improvement. For example, in my townhouse, the inspector discovered that one circuit breaker was overloaded with two wires—not imminently dangerous, but a violation of county codes—and that the fan in the upstairs bathroom didn’t work, along with numerous minor details. Cost: about $150
5. The buyer gets a mortgage. A mortgage is essentially a big loan, which is calculated so that it’ll be paid back after a few decades. Most mortgages last for thirty years. However, with many mortgages, you can pay it off early. So, for example, I could sell this townhouse in two years, and use that money to completely pay off my mortgage (assuming I sell it for at least as much as I paid for it). I’m not locking myself into make mortgage payments for the next thirty years of my life. Cost: $3,000, in my case.

Note: Some mortgages require a down payment, which is a small chunk of the loan that the buyer has to pay immediately. A down payment is required if the buyer has insufficient credit; it’s a way for the mortgage company to be sure that the buyer is really serious and actually has access to significant money. The down payment is usually 5% or 10% of the full mortgage amount.

6. Settlement (a.k.a. Closing). The buyer and the seller sit down with a title officer (not sure of the exact job title), who explains all the details of transferring ownership and provides the paperwork that both parties need. The buyer and seller sign the appropriate paperwork, and the title company transfers ownership of the property from the seller to the buyer. Done!

There are a lot more details involved, but I think I’ve covered all the major points.

In other news, I finished watching the first disc of Gundam SEED yesterday. The first few episodes were just okay, but it’s improved steadily by the end of the disc (episode five). It’s got a solid cast of interesting characters, in the best Gundam tradition.

They’re also raiding the weirder bits of original Mobile Suit Gundam for concepts, which they’ve reworked beautifully into items like the Mu La Flaga’s mobile armor. From what I can tell, they took the ill-fated G-Armor, which was a clunky fighter/bomber that docked with Gundam to protect it and add firepower, and added the separatable gun pods seen in later Zeon prototype mobile suits, and combined them to create the blazingly fast mobile armor. All of the coolness, none of the drawbacks.