After looking at what seems like a million homes, you have found one you like, made an offer and your REALTOR called to tell you, “Your offer has been accepted and you are now in contract.” Congratulations! Now what? First, your agent should provide you with a next steps to-do-list. I normally send an email message out to my clients outlining the steps to closing escrow and picking up the keys to their new homes. Here is a basic overview of the steps to completing the purchase:
1.) Immediately follow up with your loan officer and update any documents they might need. For example, updated pay stubs or bank account statements. Your contract date to release the loan contingency is X date. Review the Good Faith Estimate with your loan officer and REALTOR. Discuss a strategy of when to lock rates. Your deposit check will be held in escrow within 48 hours of confirmed acceptance of the contract.
2.) Make arrangements with your lender in regards to how the appraisal will be ordered and the manner in which it will be paid for. Find out the typical turn around for an appraisal report from your lender. Your contract date to complete an appraisal and to assess the value is X.
3.) Decide what inspections you want to complete on the home and schedule them asap. The contingency period to inspect the property per the contract ends on X date. If you need recommendations for inspectors, let me know. I always recommend you be there for the inspection but if you can or can not, I will be there. (Not all agents attend inspections.)
4.) Begin working on home owners insurance. You will need to complete any shopping and determine what type of coverage you will need and who you will be obtaining insurance from. Once you have an insurance agent and/or policy provide your lender with a copy of the policy information and agent contact information.
5.) Review disclosures provided by the seller in a timely manner. Ask questions and get answers. If further investigation is needed about any part of the disclosures provided, complete prior to releasing applicable contingency.
6.) Review inspection reports and decide if any repairs are needed prior to closing. Work with your agent to decide if any estimates for work are needed and schedule a time to obtain said estimates. Consult with your agent on whether or not any part of the contract should be amended based on inspection reported findings.
7.) If the home has a Home Owner Association, make sure you have received the Convenants, Codes, and Restrictions, Financial Statement, Insurance Policy for the Home Association. Review this big pile-o-papers carefully. Ask questions and get answers to any concerns you have about the HOA and/or management of the HOA.
8.) Talk to neighbors. Find out about the neighborhood. Walk around at different time periods. Assess noise, activity, parking etc., before releasing the physical contingency. I provide my clients with a list of questions for neighbors. I also recommend they visit CrimeReports.com and review police reports for the area.
9.) Appraisal OK, Loan Approved, Loan Rate Locked, Disclosures Read, Physical Condition Released...you are now very close to closing escrow on the home. Complete a final walk-thru to make sure all is as it was ( or better) when you made the offer. Review the Settlement Statement, referred to as the HUD statement with your loan officer and agent.
10.) Decide how you will hold title on your new home. Sign loan documents, title documents, final contract, and escrow documents. Bring a photo I.D. and a cashiers check made out to the title company for the remaining balance of closing costs and down payment. Once the loan has funded, the escrow officer will work with the county recorder to record the title in your name. Once recorded, your agent will provide you with the keys to your new home. Congratulations!
Now of course, this is the straight forward closing steps and it is not uncommon to have some zig zags along the way. Make sure you are in constant communication with your lender and REALTOR. Be aware of time lines and take time to read the documents provided. If you do hit some speed bumps, work with your loan officer and agent to find the solutions or the way out of the contract. When making this large of a purchase, do not leave anything to chance. If you stay on top of the process, the next phone call you’ll be receiving is, “Congratulations! The title is recorded and you are now the new home owner!”