From Contract to Close
You found your dream home. Now what? Here are a list of all the things that need to be done in order for you to get from an accepted contract to the closing of your home.
Writing a Contract
The first thing you will need to do is have your agent write a contract on the home. This will have everything from the offer price to the items that will stay with the home. It will state how long the inspection period is as well as if the seller will take any of the buyers closing costs. Remember that all items are negotiable.
Your contract was accepted and the contract has a binding agreement date. Based off of this date, you will need to get your inspection done in the amount of days specified by the contract. I like to put 10 business days which allows plenty of time for the very busy inspectors to get to the property, get the inspection completed and have the paperwork back to me. This should be shared with the buyers as well.
After the inspection is done, this is where the buyer and the agents buyer will walk through all of the items that are on the inspection list. You can ask for anything to be fixed. Anything from a cracked wall plate to a crack in the foundation. Everything is negotiable as long as the contract you wrote was contingent on an inspection.
Securing the Loan
Within 14 days of the contract being accepted, the buyer must have all the information for their loan submitted and sign an intent to proceed. This shows the seller that you are getting all of your things in place and that the bank has approved you for the loan. The buyer will have a lot of paperwork to submit and fill out for the bank. As an agent or potential buyer, know that the buyer will need to be able to submit paychecks, bank statements as well as tax returns.
Within 14 days, you must also secure homeowners insurance on the property. This is really just to make sure that everything is in place once the home is closed on.
Ensure Repairs Are Completed
In the contract, there should be a date in which all repairs must be complete. Typically, I put about 3 days prior to closing and if there is work done that is not visible (crawl space work, electrical, etc.), ask for the receipts or pictures to prove it was completed.
The bank will order an appraisal for the property so that the bank does not give out a loan that is more than the house is worth. This will usually be done towards the end of the process. There are two outcomes to this. It can either appraise for the value or it will not appraise. If it does not appraise for the contract price there are multiple things you can do in order to still make it to closing. The seller can lower the price to the appraised value, the buyer can pay the difference, you can split it or the buyer can back out. More information on that here.
Get your settlement statement from your bank. This will give you all the numbers that you need to know. Anything from what you need to bring to closing to how much money the seller is making on their home.
Final Walk Through
The final walkthrough is usually done the day before you close. This gives the buyers an opportunity to go through the house and make sure everything that was asked for in the repairs was done as well as ensuring the home is ready based off of what they agreed upon. This is to ensure that the occupants did not leave the house and damage walls or take something they were not supposed to.
The big day is upon you. You finally get your home! You should have already wired the money to the proper place or have a certified check with you. All the paperwork will be there for you to sign. Your agent should be there as well to ensure all the documents and numbers are correct. After closing, most times, you will get your keys and after the seller gets done closing, you are officially a new home owner! Congratulations!
The entire process of buying a home is one of the most exciting times of your life. For most people, it is the most expensive investment they are making. Ensuring you know what every step of the process is will help remove some of the fear and make it a smooth process.
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