You've got a house under contract! Now what?
You've been looking for a home and finally got one under contract!
In this market it's honestly no small feat just to get to this point. But now what?
Every contract can vary but the overall idea remains about the same. The time between going under contract is meant for doing due diligence and prepping your loan documentation. This will be a very generalized summary of the next steps in the process.
1. Drop off earnest money or coordinate to have it wired in. Often times earnest money is held by the title company that is processing the file and it's usually about 1% of the purchase price. Ask your agent if you're in doubt. earnest money is usually due within the first 3 days of the contract.
2. Schedule a property inspection. Do you want it tested for radon? Meth? Mold? Make sure you get the sewer line scoped all the way to the street.
3. Be responsive to your lender if you're getting a loan. At this point your loan officer will need a copy of the contract and will start asking you for a bunch of paper work. Don't get frustrated by this part, you are borrowing a bunch of money after all :).
4. Come up with an inspection objection if applicable. Do you want to ask the seller for any repairs? This is called an inspection objection and there is a deadline in your contract to do this by.
5. Reach an inspection resolution with seller, agree on the seller will and will not fix. There is a deadline for this as well. Usually at this point I would ask the lender to order the appraisal.
6. Continue working with your lender on putting your loan together while the seller works on any agreed upon repairs.
7. The appraiser will go to property to meet either the seller or the listing agent. Either way there is no need for you to meet the appraiser. The appraisal is a buyer's expense and how you will be billed for it varies by lender. Some ask for you to pay it directly, some roll it into the cost of the loan etc.
8. Once the appraisal report comes back hopefully all the news are good. If the appraisal comes in below agreed upon price this will likely be your final opportunity to renegotiate the contract. If the appraised value comes in above purchase price then you win! The seller will not have the opportunity to revise the price upwards. If there are any "conditions" on the appraisal that generally means some specific item or items were flagged by the appraiser as needing repair or correction and generally fall upon the seller to fix.
9. Once all of the repairs are complete and appraisal is in your lender will probably send your file through underwriting for final review. Don't be surprised if they ask you for documentation here that seems dumb or redundant. They have the money so they kind of make the rules.
10. Get a final closing disclosure. According to federal law this needs to happen minimum 3 days prior to closing. This looks like a financial worksheet that breaks down your final numbers that you will see at the closing table.
11. In between all these steps if you are taking a loan out you should not finance anything. Like at no point in your home buying process should you alter your debt to income ratio by taking out any new financing on anything at all. No new cars, no store credit lines, no new credit at all please!
12. Final walkthrough, basically make sure that the repairs are complete as agreed upon and that nothing unprecedented has happened to the house.
Start to finish this process usually takes 3 to 6 weeks with around 35 days being about average. Hope this helps answer some questions and spurs some new ones.
Any questions you have please feel free to contact us anytime!
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