Congratulations, you’ve found a home you want to buy. You’ve spent the time looking for the perfect home, and now that you’ve found it, you are waiting to make sure all the pieces fall into place. It may feel like an eternity, and keep in mind that it might be a day or two before you hear back, which is normal. Don’t stress. The process takes time, and the offer is just the beginning.
In fact, Kim Myers, an agent at The Jim Allen Group, said to remember that your agents are experienced in this part of the process, so rely on them to help ease your mind while you wait. “This is something that we do all the time. You don’t have to worry about this part of the process.”
As you wait, it’s good to know what the rest of the process looks like. From the moment the offer is made to the day you get the keys in your hands, the following information provides insights into what’s to come.
You’ll hear back from the seller’s agent first
“The first thing is negotiating the original offer if necessary,” Myers said.
There is a chance your offer could get rejected. If that happens, don’t stress. Talk to your agent to get insight into what may have happened and regroup. There’s always the possibility they received another offer or that your offer was simply too low. If they don’t get another offer, you can make another offer.
“There is a chance that the sellers will make a counter offer,” Myers explained. That means they may want to negotiate with you. Negotiations may include any number of things, such as them keeping the appliances in the home, or a different move-in date. “And once they make the change to the offer, then it is not valid until each party signs it,” Myers explained. “So every change that’s made, that’s made on the written offer goes back to having to be signed all over again.”
There’s also a good chance they accept your offer, which means they are happy with the price and terms you’ve outlined. From there, you’ll pay your earnest money, and the next steps begin.
Your lender works on finalizing paperwork
Once your offer is accepted, your mortgage lender will begin the formal process of completing your mortgage application. “You have to submit your pre-approval with any offer paperwork, so you can’t make the offer without having that pre-approval,” Myers said. Once the offer has been accepted and both parties have signed the offer agreement, you will go through the process to formalize the mortgage for the specific home you are purchasing.
Your lender will look at your tax documents from the past two years, review bank statements and retirement accounts, and will pull your credit to ensure you haven’t incurred new debt.
Your underwriter will review this information to finalize your mortgage as the next steps begin. Within a few days, you’ll have a loan estimate in your hands, which provides the details about your loan, including interest rate, term length, your monthly payment, escrow information, and closing costs.
Appraisal and inspections begin
Before your lender finalizes your loan, they need to make sure the house is a good investment, not just for you, but for the bank’s protection as they lend money to you to purchase the home. A licensed professional does the appraisal, which includes a review of the factors that drive the home’s value. These factors include looking at comparable homes in the neighborhood, the size and location of the home, its age and condition, improvements that have been made, and the local economy. This will ensure you’re paying fair market value. In a typical market, appraisals can take up to two weeks from the time your offer is accepted.
Myers explained that home appraisals help mortgage lenders know what they are willing to lend for the purchase. “Typically it’s 80 percent of the appraised value,” she said. She also said that some lenders allow appraisal fees to be paid within closing costs, while others have you pay for the appraisal up front.
Home inspections are also done by a licensed inspector who determines the condition of the home. Inspectors look at the visible systems and pieces of a home, such as the roof and gutters, plumbing, HVAC, and electrical systems. If any issues are found, it gives you, the buyer, the opportunity to negotiate any repairs before you are locked into the mortgage. Buyers are able to walk through the home with an inspector, and when complete, it may take up to two weeks to receive the final report. Once it’s finalized, your real estate agent will work with the seller’s agent to negotiate any necessary repairs before you agree to the final purchase.
“I think everybody should at least get a general home inspection. And I do tell all of my clients that, that we definitely want a general home inspection, even for new construction,” Myers said. “A home inspector will check it from top to bottom. I also typically recommend a termite inspection and radon gas, and then a survey. I give buyers advice on whether I can find a previous survey or whether they should go ahead and move forward with it.”
The title company gets involved
The title company in charge of your home has specific duties to oversee in the real estate process. They include finding any potential issues like liens against the home that may put your ownership at risk, providing the insurance policies that protect both you and your mortgage lender, and taking care of your closing and escrow account.
You will go to the title company the day of your closing. It’s important to know their work will ensure your closing goes smoothly.
Myers said The Jim Allen Group also has a closing department that works alongside the title company to ensure the process goes smoothly. “The closing department is amazing. They handle everything with the title company. As part of their duties, they also negotiate any of the repairs. We have a group of referrals that we use to go in and do any type of estimates on repairs or updates, upgrades, whatever needs to be done that’s found on that home inspection. Then we, the agents, step back in for the closing.”
You’ll close on your home
Once financing has been set and the work involved in inspections and repairs are complete, you’ll be able to close on your home. Depending upon the terms you’ve outlined in your accepted offer, it typically takes between 30 to 60 days to close on your home.
Take the time to review your paperwork and walk through the home a final time before you head into closing. Once you sign the final paperwork and pay your closing costs with the title company, the process is almost complete. Myers said it’s important to know that utilities are handled during closing.
“If you’re buying a resale listing, our closing department gets the list of the utilities from the sellers. They forward you those and then everything just gets transferred,” she said. Myers also advises closing on a Thursday morning to make sure things go smoothly.
“They get the keys after everything is recorded at the Clerk of Courts,” she explained. “People think that they’re going to leave the closing with a set of keys in their pocket, but they actually have to wait until it’s recorded. So if they close in the morning, which is optimal, like at 9 a.m., then it will probably be recorded before lunch. And they can get their keys the same day.”
Once the keys are in your hand, you’re ready to move in and start your life in your new home.
The time involved in closing on a home is well worth it. It means you’ll have the necessary time invested to make sure your purchase is sound and that your home buying experience is a positive one.
The Jim Allen Group provides access to information on this blog/website as a public service for educational purposes only. Although reasonable efforts have been made to ensure that all of the information made available is current, accurate, and complete…[read more]