It’s finally happened, you’ve found the home you’ve been looking for! All the work you put into your credit and your search has paid off, and made an offer on a home and had it accepted! This is exciting! But there’s still more work to be done! Between the time your offer is accepted and when you actually close on the house, there are going to be some other steps that need to be completed! Here’s some tips to make sure this ends as well for you as it started!
Read Your Contract Carefully
Make sure you read your buyer’s contract carefully before signing it. You want to make note of the responsibilities assigned to you and the seller in that contract as well as the time frames that are noted. This essentially gives you the roadmap you’ll be working from over the coming days. There’s going to be some kind of good faith or earnest payment that you need to make as well as a date that’s due.(The first due date in your contract is providing Earnest Money Funds to your Broker or Real Estate Agent) This is a smaller amount of funds you pay to secure your contract until the closing date and is due within 3 days of an accepted contract. There will also be stipulations or conditions for you to get that money back if you don’t end up closing on the house. If those stipulations aren’t met, the seller gets to keep those funds, even if you don’t buy the house. These are typically called contingencies. The most common contingencies are based upon the house inspecting to the satisfaction of the buyer and the buyer being able to successfully obtain financing on the home. If there are other conditions that would affect your ability as a buyer to successfully close this transaction, like the sale of a home you currently own, or a family member providing you funds for a down payment, your Realtor should also add those contingencies to your contract. Also the contract is going to list what’s included with the house. You don’t want to assume that just because there was a really nice brand new oven in the kitchen when you visited the home that it’s staying when you get the keys. All personal items that you want included with the property will need to be listed on this contract, this includes any appliances, furniture and outdoor equipment. NOTE: If an item is not nailed down or screwed on to the house you are about to buy, make sure your Realtor notes in specifically in the contract! This should include an accurate description of the item including brand name, color and location of the item in the home.and I’ll work with you to make sure we communicate those items to the seller. There are also contingencies that may be listed on the contract, make sure you understand these. An example contingency might be that the seller needs to close on their new home before they can move out of the one you’re buying, or that you need to close on your old home before you can complete the purchase of a new one. These items will need to be laid out in the contract and understood by all parties.
Your contract will include dates by which you are to have your home inspections completed by and a date by when your lender is to have your loan file completed. Make note of those dates on your calendar.
You may receive a number of different requests from either myself or your loan financing company. Providing prompt and clear responses to these requests will help ensure your closing goes smoothly. Be careful though that you to verify who is reaching out to you for information or your signature or other personal information. It is not uncommon for fraudsters hackers to try to take advantage of people going through the homebuying process by sending false requests for wire transfers or personal information. Verify the contact information of anyone you’re working with in this process and you can always call myself your Realtor or your point of contact with your loan provider to verify before replying to an information request. Your loan provider in particular may have a great deal of information or paperwork they’ll ask you for, and providing them with a prompt response ensuring your closing happens on time.
Secure Your Financing
Just because you had a preapproval letter before beginning your search for a property doesn’t mean you have to stay with that lender. You do have the option to shop around before officially accepting your loan, but this needs to happen quickly. Your financing is one of the biggest thresholds to your closing, and securing the best financing for your situation quickly ensures you close on time. Even once you’ve begun the finalization process with your chosen loan provider, Choosing to a LOCAL lender who has an office you can actually walk into if needed rather than an on line company in another state is HIGHLY recommended. Seek out a seasoned lender who has been in the business a few years- experience matters! They will know the proper questions to ask you up front to assure that when they say you are pre-qualified, you really are! Experienced lenders know the kinds of items an underwriter will expect for your loan file and also know how to resolve problems that can show up now and then on your path to closing. You will still need to ensure you keep that financing secure with responsible credit behavior between the time of your contract and your closing. Here are a few “Thou Shalt Not’s” to follow once you are under contract!
1)Do not Open Any new lines of credit- not with a Department Store, Bank, Gas Station, Service Provider… No One!
2) Do not CLOSE any lines of credit! Tempted to clean up your financial picture and get rid of some unused credit cards STOP! Don’t close those accounts until AFTER you close on your home!
3) Do not QUIT YOUR JOB! Underwriting will check just a few days prior to closing to re-verify your employment!
4) Do not make and unusual large deposits or withdrawals from you bank account without complete documentation of where the money came from or where the funds went.
Knowing that you have a new home or property you’ll be moving into, you may find it tempting to sign up for further credit to purchase furnishings for that property. Resist this temptation. Any changes to your credit after your preapproval and before your loan closing could endanger your financing. Different providers handle this process differently, so make sure you ask your loan officer before making any significant financial moves. Also, it is imperative you continue the regular payments on all accounts during this time.
Follow Up On All Inspections
During this time period, you will need to get an inspection performed on the home. This will be a foundation to roof review of the property, identifying any issues that exist. We’ll need to decide which of these we need to ask the seller to resolve before we close on the property and what issues you’re comfortable dealing with after the property belongs to you. You’ll likely also receive an appraisal on the property, this is a separate process where the real value of the property is determined, ensuring you are paying a fair price. Your loan company won’t want to approve a loan for more than the house is actually worth, so this could cause issues with your closing if it’s not completed in a timely manner. In some cases, a new appraisal will not be needed if a previous prospective buyer already received an appraisal within a specified timeframe.
This should be an exciting time for you! You’ve found the home you’re looking for! Reading through some of these items might have you worried, and that’s understandable. In the coming days, you might get frustrated with the process and paperwork, but it is absolutely worth your while to remember why you’re doing it! Your new home is worth it, and your excitement is going to keep you going. Also, don’t forget you're not alone! I am your partner throughout this process just as much as I was your partner in finding your home in the first place! I’ll be ready to answer your questions and help you understand the process, as well as help shepherd you through these steps to get you to closing as efficiently as possible! If you’re just beginning your search for a new home, contact me today to have a partner on your side!