Under Contract. Now What?
You have successfully navigated your financial qualifications, found the right home & came to terms on an Agreement of Sale. Now we just wait for settlement, right? NO! We covered steps 1-5 in a previous post. Here are the final steps to get to closing.
After the agreement is signed we will schedule any necessary inspections. Once these are completed we will try to negotiate for any needed repairs &/or credits towards the sale price to address material defects. We typically try to focus on major systems within the house: electric, plumbing, structure, roof, etc.
Step 7 Mortgage Application/Commitment
After the agreement of sale is signed, you must present a written mortgage application within ten days. Follow up with your mortgage company to assure that they have all paperwork necessary to provide you with a mortgage commitment (mortgage approval). In addition, be sure that you receive a Good Faith Estimate from your mortgage company to review the charges involved in closing your purchase.
Step 8 2nd Deposit
Usually within 15-20 days, you will owe a 2nd deposit. This is typically 5%- 10% of the purchase price. This is your good faith deposit & ties you into the deal & protects the Seller from you going into default. This money will be applied to your closing costs at settlement.
Step 9 Review Title Report
I will request the title report for your property. Once received we will review it to assure there are no judgments or liens against the seller or the property. If there are, the seller is responsible for taking care of them prior to settlement.
Step 10 Order & Set Up Home Insurance
Two or three weeks before settlement, you will need to decide on your homeowners insurance. Be sure your mortgage company & insurance company communicate with each other so that they have each others information. Your mortgage company will require your insurance binder at closing. Without insurance they will not fund your loan!
Step 11 Switch over Utilities
Two weeks prior to settlement, you should start the process of switching over your utilities to your name starting on the day of settlement.
Step 12 Pre-Settlement Walk-Through
The day before or the day of settlement we will perform a pre-settlement walk-through. This is to assure that the property is in the same condition it was in when you agreed to purchase it.
At settlement, you will need a picture ID (driver’s license), a certified check made out to the title company for the remainder of the amount you owe, and a blank personal check for any unexpected items.
Contact us if you have any questions on the buying process!