Congratulations! If you’ve gotten this far you have placed an offer on a house and the seller has accepted it. Now what? This is actually the most crucial part of the home buying process. If something could go wrong on either the buyer or seller’s end, it will be here. With a good, experienced agent, some organization, and some planning it will be easy to get through this process and you will be moving into your new home soon.
Immediately After Approval
If you have not already done so, you need to make your escrow deposit. Some agents will not collect an escrow deposit until you have an accepted contract. Once you have an accepted, fully executed contract it is vital you make the necessary deposit according to your contract.
Within the First 10 Days of Acceptance
Contact Your Mortgage Person. You should already have a working relationship with a mortgage person as he or she would have given you a pre-approval or pre-qualification letter to send with your offer. Now that you have a contract you need to go see your mortgage person so they can begin the financial process. This will include ordering an appraisal. A bank will only loan up to the appraised value of the home. If they home does not appraise you will have three options: 1) come out of pocket to make up the difference; 2) petition the seller to meet the appraised price; 3) walk away from the deal with no penalty.
Order Your Home Inspection. A home insection is not required, but is highly recommended. Your home is no doubt the largest purchase you will make. Spending a couple hundred dollars to have a qualified person thrououghly inspect your future home may prevent thousands of dollars of unexpected repairs later on. Contact a licensed home inspector of your choice. If you are working with a real estate agent he/she should be able to recommend one. The inspection must take place during your inspection period, usually 10 days from acceptance of your offer.
Submit Your List of Repairs. Before the 10 day inspection period ends you need to submit a list of items you want repaired by the seller before closing. It is important to remember not all items will be necessary in order to close. A scratch in the paint on the wall is not something that has to be repaired in order for a bank to loan on the property. A roof at the end of its life and leaking into one of the bedrooms is a repair that could impact financing and would be within reason to ask for repairs. The only exception would be if you were buying a home “as-is.” Most bank owned properties would fall into this category. The bank gives you your inspection period and your options are to take it, or leave it as it stands. With any contract, you can walk away penalty free, as long as it is done within the inspection period.
Inform Your Landlord. If you are renting you need to inform your landlord. Most landlords require at least 30 days notice that you are moving out. Failure to do so could result in forfeiture of your security deposit. You will also want to work out a move out date that allows for extra time should your closing get delayed.
Within 30 Days of Acceptance
Contact Your Insurance Provider. You do not want a lapse in coverage between the sellers and yourself. If you are financing your home, most lenders will not lend if you do not have insurance in place. They also usually require you to pay one year’s insurance premium up front. Your insurance broker can let you know how much this will be, and will provide a binder for you to bring to closing.
Stay In Contact With Your Mortgage Person. You must obtain a mortgage commitment letter before your financing period ends. This date can vary depending on the type of financing you are attempting to get. You want to make sure you do not “fall through the cracks.”
Arrange For a Mover. This should be done 30-45 days ahead of the closing date. Make sure not to make firm arrangement until you have a confirmed closing date and you have received your financial commitment letter from your mortgage person. Many people make preparations and sometimes fully move out, just to find their closing delayed a week. This can cost hundreds of dollars in storage fees.
1 to 2 Weeks Before Closing
Arrange Utilities. Contact the utility company and have the utilities transferred into your name. This includes (if applicable) gas, electric, water, sewer, telephone, cable television, and internet service. Be sure the effective date is when you take possession of the house. You do not want to be paying for the seller’s usage. Also, don't forget to have your current utility services disconnected
Make Sure You Have the Funds Available for Closing. If you are paying cash you will want to be sure the funds are available and in a guaranteed state. If you are financing, Your mortgage person should have given you a good faith estimate of the amount that you will need. If not, contact him/her as soon as possible.
Make Final Arrangements With Movers. At this point you should have a clear to close date. Once you have that, you can make final arrangements with movers.
1 to 2 Days Before Closing
Arrange For a Final Walk Through. Your agent will arrange a final inspection of the home you are about to purchase. Most likely everything will be fine, but check to make sure everything is in the same condition as when you first put your offer in.
Verify the Time and Place of Closing. Call the closing agent or title company for the time and place that the closing will occur. Your agent may do this for you.
Get the Final Amount You Need to Bring to Closing. Call your mortgage person for the amount of the certified or cashier's check you need to bring to the closing.
For the Closing
You will need the following at closing:
1) Picture I.D. (drivers license, passport, etc.) The closer will need to make a copy of it for the registry of deeds.
2) Personal checkbook. In case you have to pay for any incidental charges such as taxes that have already been paid by the seller.
3) Certified Check in the amount given to you by your lender.
4) Insurance Policy or binder.
5) Your personal attorney, if any.
Congratulations! At this point, you can move into your new home. This entire process can seem lengthy and troublesome but this is where a good agent comes into play. A good agent will specifically guide you through this process. They will handle some of the items above for you (submitting repair issues to the seller) or at the very least remind you to complete tasks that you will have to do (obtain insurance). Team Johnson of Watson Realty Corp treats each buyer as if they are our only customers. We do not believe in passing you off to a closing coordinator. This is the most crucial period and we believe you deserve our full attention in this final but most important phase.
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