The Process as a Buyer Part 2
Don’t have time to read? Try this Link for Video! https://youtu.be/d34_w12Pp9w
Congrats! You have submitted an offer and it has been accepted. Part one is complete, onto part two. This part can be overwhelming and sometimes frustrating, but that is why I am here. That’s why it is important to work with a Realtor. It is wise to go into the process understanding that there are points during the process where everything could just fall apart. This is what makes the home buying process so emotional and stressful. So many different things could happen- loans denied, jobs lost, natural disasters, discovery of structural defects, or mold! Your Realtor will be your resource when something goes wrong and can advise you on what to do next. I will remind you first, not to panic. We will discuss it together, what are your options? Is it time to walk away and start again, or can the deal still be saved? I will be there for you not just as a resource, but also as a friend. So it is important to keep in mind that until the keys are in your hand, anything can happen, but eventually, everything will be OK.
TRANSACTION CALENDAR- Working with your agent, you will figure out the transaction calendar. Depending on the market, the time of year, and other factors a timeline will be determined. This calendar will plan out dates and deadlines – when the Inspections will be done and how long you will have to submit a repair proposal if needed. All contingencies in the contract will be spelled out along with all the other items that will be addressed during this period. Now would be a good time to contact a moving company, inform your landlord, or list your own home, if you hadn’t already.
*SUBMIT APPLICATION TO LENDER: You were already pre-approved, but now you need to submit your Mortgage Application to your lender. Your lender will also require an appraisal, so that should be scheduled as well. The lender will determine who and when the appraisal is done as it is a requirement for them. The inspection is the responsibility of the buyer. Your Realtor can recommend an inspection provider.
*INSPECTION & APPRAISAL– You can choose your inspector. You can choose whomever you like. A referral from your Realtor, a professional acquaintance or friend. Someone you feel will do a good and thorough job. The inspector takes an extremely close and detailed look at the property to discover any problems or issues that may arise. Items that could cost money to repair.
*REVIEW with AGENT- Once the inspection report is provided, it is time to review with your agent. At this time, renegotiations with the seller are possible based on the findings in the inspection report. It will be up to you to decide which items are important to you. If a critical item is discovered, the buyers can opt out, or they can request the item be repaired, or the costs of the repair be subtracted from the originally agreed upon price of the home. The appraisal will also be reviewed. Depending on the type of loan and its requirements there are options. If the appraisal comes back higher than the originally agreed upon price of the home- Congratulations! You got a great deal! If it comes back lower, there are some options. You can offer the seller the Appraised value – but they are not obligated to accept. Depending on your loan, you may need to pay the difference if the sellers do not want to lower the price. Either way, do not panic. Your agent will be there to discuss your options and decide on the right path for you.
*REVIEW with LENDER – Once inspections and appraisals are final, the final figure for your loan will be determined and all documents will start to come together.
*REMOVE CONTINGENCY – Now that inspections and appraisals are complete and any issues have been addressed, the time has come to remove the contingencies from the contract and move forward with the final phase of the sale.
ESCROW- Every time someone buys a house on TV or in a movie the phrase “We are in escrow!” comes up somehow. Surely all of us have heard the term, but do we all know what it means? When one is in Escrow in the home buying process, the buyer and seller work with a third party- the Closing Agent- (who is neither the buyer nor the seller) to temporarily hold money, paperwork, or other assets for a transaction on their behalf before the transaction has been finalized. The lender will send all the final loan paperwork for the buyer, the title agency will submit their paperwork from the seller and the seller’s lender will provide their paperwork. Escrow is the final collaborative step before closing. During this phase you will receive your final Mortgage Closing Disclosure that will detail all the final closing costs, and exactly how much money you will need to bring to the closing table.
CLOSING- This is it! The day you have been waiting for. It has finally all come together. Closing can be done with the Buyers and Sellers separately, or everyone can come together at the same time. All the final papers are signed. Typically, this is also when you will get the keys to your new home! Occasionally, there is an alternate possession date different from the closing date due to the logistics, but that will be determined in advance as a part of the purchase agreement. The title company will send all the signed documents to the lender and the lender will transfer the funds for the home purchase and the new title will be recorded.
CONGRATULATIONS – The process is complete, and you can move into your NEW HOME!