Having your offer on a house accepted feels great—but for most home buyers, it’s just the beginning. Much must be done before you will walk through that front door as official owner. Consider 10 steps to guide you.
EARNEST MONEY – Some payment is required at the beginning of a transaction to protect the seller’s interests while they take their house off the market. Make sure your earnest money is delivered on time and in the proper payment form. The amount agreed upon during negotiation will be in the standard sales contract.
CONTACT AN ATTORNEY – Once you have an executed sales contract in hand, the clock starts on your attorney modification period. Though the use of an attorney is not required, it is money well spent to have someone to represent you legally, handle the details and do the heavy lifting to get your transaction to the closing table including property inspection requests, mortgage deadlines, survey, and title insurance review.
PROPERTY INSPECTIONS – The clock also starts on your inspection period. There are multiple types of inspectors that you may want to schedule. A standard home inspector is the most common- but radon, pest, septic, structural, HVAC, and mold inspections may also be relevant to your buying situation.
LENDER DOCUMENTS – As soon as you have an executed sales contract, you will need to communicate with your mortgage lender so that they will start the mortgage process. Be prepared to provide lots of documentation throughout this transaction. Make sure that you get the requested documentation to them ASAP to limit any potential problems. Some lenders don’t check in with you to keep you updated on their progress, so make sure that you check in with them to verify that they are on track. Your Realtor should help you with this as well.
APPRAISAL – Once you’ve come to terms with any home inspection issues, let your lender know. They will order a home appraisal to verify that the value of the home you’re purchasing is worth the loan amount. There is a cost for the appraisal, so it’s best to wait until after you have completed the inspection process to schedule it.
TITLE COMMITMENT – A Title Company will issue a title commitment that reviews the history of the property and discloses any liens against the property that may need to be resolved. This is handled by your attorney.
HOMEOWNERS INSURANCE & WARRANTIES – Your lender will require you to have a Homeowner’s Insurance Policy on the property that you are purchasing. You will want to shop around and choose the homeowner’s insurance provider and policy that works best for you. Once you have the policy in place, provide proof of payment to the lender and your attorney. You also have an option to purchase a Home Warranty at this time, ask your Realtor about your options.
TURN ON UTILITIES – After you’re past all of the major steps required to purchase your home, you’ll want to get your utilities turned on if they’ve been turned off, or transferred into your name if they’re already on.
FINAL WALKTHROUGH – It’s important to do a final walkthrough before the closing to verify that any requested repairs have been completed, all of the seller’s personal belongings have been removed, and to make sure that the home is ready to move into. This is not a time to renegotiate any items on the sales contract – it is simply a safeguard to make sure that no major issues occurred since the original purchase that could cause the closing to terminate.
CLOSE THE TRANSACTION – At the closing, you’ll need to have your government-issued photo ID and certified funds (cashier’s check or wire transfer) for the amount required from you at closing, which the attorney will inform you of in advance. You will meet at the title company to sign all of the required documentation. A typical closing usually takes less than an hour. Once the documentation has been signed and your lender has funded the transaction, you will be given the keys and the house is yours!
