What Happens Once You Are Under Contract on a Home!
Congratulations on getting your offer accepted and being under contract on a home! Here's a guide to help you navigate the next steps in the home buying process:
1. Earnest Money Deposit:
- Shortly after going under contract, you'll be required to provide an earnest money deposit. This is a sum of money (typically 1% to 5% of the purchase price) demonstrates your commitment to purchasing the property.
- The earnest money is held in an escrow account until closing and is applied toward your down payment or closing costs.
2. Attorney Review:
- The Attorney will carefully review the purchase contract and any seller disclosures provided. The attorney review will make sure you understand the terms, contingencies, and deadlines outlined in the contract.
- The attorney will pay attention to important details such as financing terms, inspection contingencies, and the timeline for completing various tasks.
3. Schedule a Home Inspection:
- Hire a professional home inspector to thoroughly evaluate the property's condition. The inspection helps identify any underlying issues or potential problems.
- Review the inspection report and discuss any concerns with your real estate agent. Depending on the findings, you may request repairs or negotiate the purchase price.
4. Secure Financing:
- Finalize your mortgage application with your chosen lender.
- Provide any additional documents or information requested by the lender during the underwriting process.
- Work closely with your lender to ensure a smooth and timely loan approval.
5. Appraisal:
- The lender will order an appraisal to determine the fair market value of the property.
- An appraiser will assess the home's condition, features, and comparable sales in the area.
- If the appraisal value is equal to or higher than the purchase price, the process continues as planned. If the appraisal comes in lower, you may need to renegotiate the price or explore other options.
6. Obtain Homeowners Insurance:
- Research and select a homeowners insurance policy that provides adequate coverage for your new home.
- Share the details of your insurance policy with your lender as it is typically a requirement for closing.
7. Complete Required Inspections and Contingencies:
- If there are specific inspections or contingencies outlined in your contract, ensure they are completed within the agreed-upon timeframe.
- Examples of additional inspections might include termite inspections, radon testing, or specialized evaluations (e.g., roof, foundation, or septic system).
8. Final Walk-Through:
- Schedule a final walk-through of the property shortly before closing.
- Ensure that any repairs negotiated or agreed upon have been completed satisfactorily.
- Confirm that the home is in the same condition as when you made the offer.
9. Closing Preparations:
- Work closely with your real estate agent, lender, and attorney to prepare for the closing process.
- Review all closing documents, including the Settlement Statement, which provides a detailed breakdown of costs.
- Arrange for a wire transfer or certified funds for the remaining down payment and closing costs.
10. Closing Day:
- Attend the closing meeting, typically held at the title company, attorney's office, or escrow company.
- Review and sign all necessary paperwork, including the mortgage documents, title documents, and any additional agreements.
- Pay the remaining closing costs and receive the keys to your new home!
Remember, each home buying process may vary slightly. Stay in close communication with your real estate broker, lender, and attorney to ensure a successful and smooth closing on your new home.
Trevor Hughes - @properties - 708.341.1009
