You’ve looked at dozens of houses and finally found your dream home. Your real estate agent has negotiated with the seller’s agent and you’ve agreed on the price. While that’s a huge accomplishment, you’re not done yet.
After making your offer and getting it accepted, there are still many steps that have to happen, and they’re all critical. This is where you’ll appreciate the time and research you put into selecting your real estate agent, as it’s their responsibility to make sure the dominoes fall in order — and on time. And as an aside, this is also how the agent earns his or her commission — these are daunting tasks!
Corin Lujan, an agent with Northern Nevada Real Estate Group, says, “One of the most important things to keep in mind is when escrow will close and then work backwards from there.”
Once you’ve agreed on the offer, your agent should present you with a contract and plan of action, along with a timeline to obtain financing and the other items on this list. Pay serious attention to these dates, as missing any one could jeopardize your plans. This is particularly important in a seller’s market, where your seller has many other options.
The action plan could take several weeks from the first date to the last, depending on availability of inspectors and appraisers. Your agent should be able to give you a pretty good idea of how long it will realistically take.
Here are some of the items that will be included on your action plan:
- Purchase price: The contract will spell out the price you’ve agreed upon, as well as any special contingencies. Be sure to read this carefully to make sure it says exactly what you think you’ve agreed to.
- Earnest money deposited to title within one business day: You’ll need to pay the amount you’ve agreed upon, typically around $1,000. You’ll get your earnest money back if any of these occur: the home doesn’t appraise for the loan amount, the loan is not approved for other reasons, or the repairs are bigger than you’re comfortable with.
- Sellers Real Property Disclosure (SRPD) fully executed: The seller is required by law to disclose anything that could negatively affect the value of the property, including leaks, plumbing or electrical problems. Your agent should advise you of the elements to look for on this document. Read it carefully, and make sure you understand it before signing. Required within four calendar days of acceptance.
- Appraisal ordered by lender: Unless you’re paying cash for your new home, the lender will require an appraisal to determine the actual market value of the home. If it appraises for less than what you’ve agreed to buy it for, you’ll need to come up with the difference in price or try to negotiate with the seller on a lower price. Required within five days of acceptance.
- HOA documents: If your new home has a Homeowners Association, you’ll receive documents outlining your rights and responsibilities. You should thoroughly understand how these associations work before you buy, as they can affect not just your finances, but also your quality of life. You’ll have five days to review these documents and then decide if you want to cancel or move forward.
- Loan approval: Your loan company will let you know that you’ve been approved for the amount agreed to in the contract. Note: Before starting your home search, you should have obtained a pre-approval letter, a document stating the loan amount you were qualified for. It is not a guarantee to lend, though it carries significant weight. It also outlines the type of loan(s) you’re approved for: conventional, FHA, VA, fixed rate or adjustable rate.
- Inspections: For most, a home is the biggest purchase you’ll ever make. It’s imperative that you take inspections seriously and you understand what the inspector is telling you about potential problems with your new home. If the repairs are too big for you to accept and the seller is unwilling to make the repairs or give you credit for them, you can back out, and in most cases still get back the earnest money you’ve put down.
- Repair limit: Once you know what needs to be repaired, you and the seller will agree on what they’ll take care of and what they’re leaving for you. It’s common for the seller to agree to a financial deduction in lieu of making the repairs.
- Reinspection of repairs: If you’ve agreed that the seller will make the repairs, you’ll want to get them inspected again to ensure they were done correctly.
- Close of escrow: This is the transfer of funds and ownership. A title company typically acts as an independent third party to handle the closing.
Phew! That’s a lot of steps. Is it time to load up the moving truck yet? Not quite. Lujan recommends getting your new home professionally cleaned (including carpets) if that service wasn’t performed by the seller. She also recommends getting the home re-keyed. “You have no idea how many keys are floating out there, and it will give you peace of mind knowing you’re the only one with keys to your house,” she says.
Once you’re moved in, a good real estate agent can be a continuing source of information, whether you’re looking for a gardener, a maintenance person or a good preschool in your new neighborhood.
So NOW are you ready? Maybe so. Click to find a HIP-qualified agent who can help you navigate the complexities involved in real estate transactions. Everyone on this list can talk to you about the Home Is Possible programs and how they can help you on the path to homeownership.