What Happens Between An Accepted Offer And Closing
Sep 2, 2021
What Happens Between An Accepted Offer And Closing
Buying a home is a huge moment in every person's life. It's a moment you should celebrate!
Now that you've had a moment to enjoy the euphoria of moving closer to purchasing a home, it's time to get to work on the nitty gritty details.
Understanding what happens after your offer has been accepted and before closing can save you a lot of headaches down the road.
TALK WITH YOUR REAL ESTATE AGENT
This should be step number one after having your offer accepted. Your real estate agent should reach out to you so that you know that you're under contract.
Your agent can help you begin to plan your next moves and talk you through who you need to get you in touch next.
Keeping in close contact with your real estate agent is critical at this point so they can help you make sound decisions and offer you guidance.
MAKE YOUR EARNEST DEPOSIT
Once your offer has been accepted, you're officially in a contract to purchase the property.
Your earnest money is a good-faith deposit that is designed to protect the seller as they take the home off the market. It's proof of your intent to buy and it's the first official step in beginning the home-buying process.
Often, your real estate agent or a broker will open an escrow account to hold your earnest money deposit. Typically, your deposit is required within a few days of signing the contract, and can range from 1% to 3% of the cost of the home. If you don't deliver on time, the seller can cancel the contract.
Once the sale is final, the deposit will be pulled out of escrow and delivered to the seller as part of the purchase price of the home.
OFFICIALLY APPLY FOR YOUR LOAN
Chances are good that you've been pre-approved for a mortgage to get to this point, but that doesn't mean you have your loan in hand, yet.
Now is the time to send all of your paperwork off to your lending agency so they can start the loan process.
Your lender will need to verify your income, which means they'll be reviewing many of your tax documents and bank statements.
Thankfully, if you've been pre-approved by a lender, this process goes much more quickly (which is what can make you an attractive buyer to a seller). Make sure you contact the lender quickly to find out what other documentation, if any, you need to provide.
GET INSPECTIONS DONE
As a buyer, this is your opportunity to check the property for anything and everything that could be wrong with the home.
Schedule a home inspection as quickly as possible so that there is plenty of time for the home to be fully inspected.
Make sure your inspection includes structural issues, like the foundation and the roof; mechanical issues, like the HVAC and septic or sewer system; and environmental issues, like pests, mold, and radon leaks.
You may need multiple inspectors to fully go over the property. Bear in mind that there's no such thing as a perfect inspection, and even new homes will have minor issues. Your inspector(s) should explain to you what they found, and alert you to anything serious.
COMPLETE A HOME APPRAISAL
Before your lender gives you a loan for your new home, they're going to want to make sure that the appraised value is equal to or greater than the loan amount.
If the appraised value of the property is higher than the list price (and your loan amount) the bank will be happy and things will proceed smoothly.
If the appraised value is lower, it can create issues. Your lender won't want to give you more money than what the home is worth because it's not a wise investment for them. At this point, you may need to renegotiate with the seller, or the deal may be off.
CLEAR THE TITLE
A title search will need to be completed on the property to ensure that there are no liens against the home.
Unpaid taxes may be found during a title search, which is a simple fix. But things like undocumented easements or forgeries, which are major concerns, could also be discovered.
A survey of the property may also be included as part of the title search. This will help you confirm that listed acreage of the property is accurate and that none of the neighbors have moved in on the property line.
BUY HOME INSURANCE
Before closing on the property, your lender will require you to purchase a homeowner insurance policy.
Homeowner insurance will cover you in the case of fires, thefts, and damage from wind and lightning. However, if you live in a floodplain, you may need additional insurance.
Speak with your insurance agent to find out what coverage is right for you. Make sure you thoroughly read the policy and understand what's covered. If you have high-value items, such as fine jewelry, you may need to purchase riders for additional coverage. Don't be afraid to shop around for prices and coverage. Similar to auto insurance, getting quotes from multiple companies can help you secure the best rate and coverage.
TURN ON UTILITIES
As you near the closing date, you'll need to remember to have the utilities of the home switched into your name.
Getting this process started earlier rather than later helps prevent any interruptions in service. The summer can be a particularly busy time for utility companies, so filing your paperwork one to two weeks in advance can be beneficial. Get a list of the companies and start contacting them to find out what you need to get started.
CONDUCT THE FINAL WALKTHROUGH
Just before closing, you'll conduct a final walkthrough with the seller (usually within 48 hours of closing).
This is your opportunity to verify that all of the requested repairs were made (not to request new repairs) and to make sure that the home is ready for you to move in to.
Make sure to test that the lighting and electricity is working in the home; that all major appliances are in working order; that windows and doors open and close properly; that the HVAC system runs; that the toilets and plumbing are working; and that there is no new damage to the walls, floors, and ceiling.
Once this is complete, you're ready to move on to closing!
FIND YOUR NEW HOME WITH ORIZON REAL ESTATE
Our expert team of real estate experts is here to help you make sense of the home buying process. We want you to feel comfortable and confident as you go through the entire process. Our talented realtors will explain everything to you every step of the way.
If you're considering purchasing a home in 2021, call us today at 260-248-8961 to connect with an Orizon Real Estate agent.