How exciting for you! Â You just signed an offer to purchase a new home. Â You may have an good sense of where things go from here, you may not. Â But lets delve into the most typical scenarios here so you can be prepared.
1. Â Home Inspection
2. Purchase and Sale
5. Close Preparation
1. The first step is the Home Inspection. Â The buyers will hire someone to come inspect your home, and this inspector will just have WONDERFUL things to say about future abode. Â Mostly. Â He will, of course, point out many situations that "could be better" or "should be safer" or "will save you money tomorrow, if you fix it today". All of these, and many others, are fair game for the inspection. Â Homes don't "pass" and they don't "fail", it's all grey area. There are SO MANY things that can come up in an inspection, I couldn't begin to address them all here. Â But, typically, Â buyer and seller will agree that certain defects either need to be fixed (by the seller, at the sellers expense), or buy the buyer (also at the sellers expense via a credit off the purchase price - typically). Â But most buyers will need to accept certain issues and fix them after the closing at their own expense. Â Welcome to home ownership!
2. Now that we have that nasty business out of the way, its time to get the Purchase and Sale done. Â The P & S is usually doneÂ oppositeÂ the offer. Â The seller drafts it, the buyer changes it, and when everyone agrees, the buyer signs it, delivers his "large" deposit, and the seller countersigns. Â In many cases, theÂ Â P & SÂ supersedesÂ (that is overrules) the offer. Â Once both parties have signed, typically the offer no longer is an agreement between the parties, so the Purchase and Sale becomes the record of the agreement. Â Where the offer is 1-2 pages, this agreement typically is 8-14, so there's a lot more detail here. Â Most times, attorneys are in place on both sides, and the quality of the agreement typically reflects their expertise in this area, so choose carefully, and understand what you are agreeing to.
3. Appraisal: The bank is typically going to extend a mortgage on the property, and they need assurances that it is worth what the YOU have decided to pay for it. Â That's the appraisers job, and they will come out and inspect your home, measure it, and look at local data to determine if the purchase price is appropriate. Â If it's not, look out! Â Your deal could be in jeopardy, especially if your percent down is low. Â So it's best to get that appraisal done quickly, without much ado. Â Fortunately, problems at this point in the transaction are rare, as most buyers workÂ diligentlyÂ with their real estate agents to understand the homes market value. Â Most agents and appraisers rely on similar information, so if you did your homework beforehand, there won't be any surprises here.Â
4. Financing: Â Let's get some money! Â Financing is never an easy task, and it can take some time, and a lot of paperwork! Â Hopefully you have already started this, as banks can take 14-30 days to get a loan throughÂ underwriting. Â There's LOTS of steps here, talk with your loan rep and ask lots of questions (what happens after that? Â and after that?) so that you can keep an eye on the process from your point of view. Â
Fundamentally, buyers extend if they still aren't sure the bank is OK to proceed with their loan. Â And despite words like "Final approval" and "CommitmentÂ Letter" better words would be "Final Conditions for Approval" or "QualifiedÂ CommitmentÂ Letter". Â Banks can (and do) pull financing at the last minute, and the best way to make sure that won't happen to you is to push to get them everything as soon as possible. Â Don't let your financing contingency expire until you are comfortable with the letter the bank provides - and don't buy a lot of furniture until after close!Â
5. Close Preparation: Â Here is where you make sure the movers are lined up, and the utilities will be cut-over appropriately. Boxes anyone? Â You'll also need to do a walkthrough just before close to make sure the house is ready for you - as promised.Â
Â There's a lot at this step, but we've all moved before, so we probably know the drill. Â Hopefully your agent has sent you a handy checklist to help you out, but if not, check out the USPS. Â They have one.
6. Close: Â Ah, the big day. Â Get that wrist limbered up and sign, and sign and sign. An attorney will guide you through the paperwork, and assist you if there were issues at the walkthrough (along with your agent, who will likely recommend a course of action). And now you just have to go where you're going and unpack! Â How long can that take anyway? Â Right? Â
Good luck, and hopefully you'll have many good memories in the new place.