A True Story

You have priced your home to perfection. You have banished all the extraneous "junk." You have hired a stager so that your home shows like a model.

You have had broker tours and Open Houses.

Now, you have an acceptable offer. You've signed the papers. The appraiser has been thru the house. The buyers have done their inspection. The buyers drive by your house daily. They're so excited!

The loan with all its paperwork has gone into underwriting, where it sits for a week. But, out it comes at last. Good to Close! Ah, those magic words. Both the buyers and the sellers are packing.

But...(you knew there was a "but") the property tax report comes back almost $2000 higher due to a re-assessment. (The original annual tax bill is now $10,000 instead of $8,000.) So, the loan goes back to underwriting. And, nothing, now will now get this loan to the closing table.

Sound far out? Not really. The underwriters have been given tighter and tighter requirements and one of my loan officers told me that you need a FICO score of 700 today! Wow, I can remember in "the good old days" when a FICO of 550 would get you into a property!

Times have changed. And, today, every buyer should get a loan approval before looking at homes and then hope that no underwriting guidelines change.

 

7 Comments on A True Story

Scores do need to be higher. A 700 will help you with loan to value and rate.

05/13/2008 03:29 PM by Shaun Wren (Western & Southern Life)

Oh wow, losing the ball in the ninth inning .......they could at least have waited for the house to close, as bad as NJ is with taxes, at least they do that! 

05/13/2008 03:31 PM by Ernie & Barb Suto (Century 21 Preferred Realty)

Done in by the tax monster.  Man oh man I know the local government isn't going to help this deal get done.

05/13/2008 03:31 PM by John Walters (Specialized Real Estate)

Dispute the taxes?  That seems like a very large one year jump in tax total, unless this is a pretty expensive home. 

05/13/2008 05:14 PM by Ron Tarvin's Katy Agent Team-- Katy Texas Real Estate (Keller Williams Realty Katy@Cinco Ranch)

Hi Eileen - it's part of the fun that goes along with the new, stricter underwriting requirements.  It's just a shame that new tax bill came out so close to closing, with no time to look for alternatives.

05/13/2008 05:30 PM by Don Fabrizio-Garcia - Connecticut Real Estate & Appraisals (Keller Williams CT Realty)

Shaun,

My loan officer just told me that you now need a 720 FICO! Underwriting is getting tighter and tighter!

Ernie,

They re-assess the properties here every four years. Different sections. Tax bill is due June 1st and September 1st. So, no one knows what the actual tax will be till the middle of May when they send out the bills. Rough! And, Illinois would never let you close then raise the amount. The state/county want their money NOW!

John,

Yeah...you can do everything right...and then have sometime unexpected happen. I remember many years ago...buyers were in a car accident on the way to closing. It didn't close! And, what can you do? Just start over.

Hi Ron,

Well, yeah, it is an expensive house. And, actually, the increase in taxes to $10,000 puts it under many other Naperville homes. Dispute? There's a time factor. The present owners would have to do that and they have a short period of time. They may want to...but chances are they'd lose.

Don,

There's always a problem in May with the new tax bills and October when the government doesn't fund FHA/VA loans. You just have to remember that it could happen!

05/14/2008 08:29 PM by Eileen Landau, ABR, CRS, e-PRO (Realty Executives, Pro/Team)

Unfortunately there is always a but... in this market!

05/17/2008 11:45 PM by Judy Greenberg- Coldwell Banker Long Grove/ Buffalo Grove Real Estate (Coldwell Banker Residential Brokerage)

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Real Estate Agent: Eileen Landau, ABR, CRS, e-PRO (Realty Executives, Pro/Team)
Eileen Landau, ABR, CRS, e-PRO
Naperville, IL
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Realty Executives, Pro/Team

Office Phone: (630) 515-9500
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An assortment of odds and ends that may or may not pertain to the greatest city in the Midwest: Naperville. Also some commentary on the Naperville real estate market.

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