Resent-Message-Id: <8707081447.AA23569@bk.sei.cmu.edu>
Message-Id: <8707062137.AA17760@sei.cmu.edu>
Date:     Monday, 06 Jul 87 17:35:54 EDT
From: dennler@a.psy.cmu.edu (Cathy Dennler)
Subject:  house hints
To: barbara.zayas@sei.cmu.edu
Resent-To: bovik@spice.cs.cmu.edu
Resent-From: Barbara.Zayas@sei.cmu.edu
Resent-Date: Wednesday, 8 July 1987 10:47:12 EDT

Barbara,

	My fiance and I closed on a house in May without benefit of a lawyer,
which we now feel was a mistake.  Of course, with the closing costs etc., a
lawyer's fee just seemed like an unnecessary added expense, but the next 
time we will certainly consider it to be a wise investment.

	First, (and this probably does not apply to your particular 
situation), the previous owner of our house is an 80-year-old man in poor
health.  The house had not been cleaned properly for at least 10 years, and
was an absolute pig-sty.  Our sales agreement *specified* that the house was 
to be spic and span at the time of closing.  Nothing was touched; I have spent
the last 2 months literally scraping off the dirt.  

	Second, our sales agreement also specified that our taxes were
*warranted* to be X dollars.  Imagine our surprise when we received our
mortgage-payment booklet and discovered that our monthly payment was more
than we had anticipated.  Why?  The taxes are $72 more annually than the 
warranted figure.  Here is what to watch for:  Our sales agreement specified
a total ANNUAL figure.  However, the settlement statement we signed at closing
did not.  Instead, the taxes were broken down into 4 categories, and the
amounts listed were neither annual nor monthly figures, but rather the
monthly figures times the number of months of escrow deposit required.  In
retrospect, I guess you could say that we should have verified that the 
monthly figures times 12 equalled the warranted annual amount, but there are
just too many figures involved with buying a house to be able to sort through
and realize which are most important.  My advice to you is to have your tax
figure GUARANTEED to be accurate before you even go to your closing.  A
colleague of my fiance encountered the identical problem; however, his taxes
were really over $500 more a year than he'd been led to believe!

	Finally, and this is a rather small point, but an irritating one
nonetheless, are you aware that if your mortgage payment is not an even dollar
amount, your payment is rounded up to the next dollar?  We were not because,
of course, nobody (RE agent, settlement people, etc.) told us.  But this is a
Pa. state law.  Naturally, our payment was 1 cent over the dollar and rounded
up to the next dollar.  Apparently, this 99 cents goes into escrow limbo.

	Good Luck!