I wanna buy a home Part 4: I'm now under contract, what's next?
by Tomeka Givens
If you haven't already, be sure to read part 1, part 2, and part 3 in Tomeka's "I wanna buy a home" series.
The seller has agreed to your offer, signed it and you're now under contract. What's your next step?
STOP looking at other homes! You are legally bound to the terms of the contract you've just signed and cannot legally make offers on other homes.
Your next step will be to schedule your home inspection ASAP! Be sure to synchronize your availability with mine when scheduling, as I make it a point to be present at my clients' home inspections.
Note: While I have preferred home inspectors, by law, you have the right to hire any home inspector you want.
The home inspection is important as you will get to know every nook and cranny of your home. I advise you to allot about 3 hours and to dress comfortably as I'm not the agent who will have a seat while the inspection is taking place. --I'm all up in the mix, breathing down the back of the inspector's neck, and you will be right by my side.
This is the time to ask any and all questions about the property,
The home inspector is there to give you their professional unbiased opinion about the home. He's going to pick on some of the areas that need repairs or replacement (if applicable), but he's also going to point out the positives about the home.
At the end of the inspection you will pay the inspector directly per your agreement (check, cash, etc.) and you should have your report if not immediately then within 24 - 48 hours.
Between completion of the inspection and review of your report you will then decide what you would like the seller to address (i.e. repair or replace).
Understand during this process that no home is perfect...not even new construction.
Having said that, you will then decide what issues are deal breakers for you and relay this information to me. I will then list these items/issues on a Property Inspections Notice (PIN) and submit to the list agent for the seller's review.
The seller will have up to 5 days to respond with 1 of 4 options to your PIN: 1. agree to fix everything, 2. agree to fix some things, 3. agree to offer a credit in lieu (instead of) fixing issues or 4. not agree fix anything.
Understand! A seller is not obligated to fix anything you request, but you are also not obligated to move forward with purchasing their home. If you and the seller can't come to an agreement on repairs, then you can have the right to sign a release of the contract and funds walk away with your EMD and your search for your home continues. (The downside to this is you do not get back the funds spent on the inspection.)
In the event you and the seller reach an agreement with repairs, you then opt to move forward with purchasing the home.
Following this, you will give your lender the green light that you are moving forward with the purchase, then they will proceed with ordering the appraisal.
Most lenders may require you pay for the appraisal out of pocket. This price can range from $400 and up depending on the type of property and the area. You are welcome to ask the lender the costs ahead of time to insure you have the funds to pay when needed.
In the meantime, you will become "best friends" with your lender's Loan Processor, Underwriter and your title company's Title Processor. I highly recommend that you fulfill their requests ASAP. Remember, the sooner you give them their requested documentation, the sooner you can close.
Your lender will require that you purchase a homeowner’s insurance policy. You should not leave this to the last minute as you may find it beneficial to obtain a quote from various companies for the best rates.
My two cents:
- Start with your car insurance company and see if they will offer a bundle deal.
- Contact your cable & internet providers in advance about switching the address of service and be sure to give them your date of occupation.
- Contact utility, alarm company a few days before closing to plan to switch service.
- Your water bill will be transferred by the title company. It sometimes takes some time for the city to figure out that the home has a new owner. Understand, from your settlement date and forward, you are responsible for the usage, even if the bill is still in the previous owner's name.
- You are welcome to plan with a locksmith if you opt to change your locks (highly recommended).
Around 72 hours before your settlement date, you should receive your closing disclosure (CD) from your lender via e-mail. This document breaks down every red cent within the transaction...most importantly, the amount you are required to bring to settlement. Please understand that it is not uncommon for this amount to be off. If this is the case, call me and your lender for clarity and corrections...but sign them anyway. You are required to acknowledge receipt of this document by signing it. Time is of the essence and critical at this point. If you don't sign the CD by 11:59pm this will delay your settlement..
Example: if you're settlement is scheduled for a Friday and you receive your CD on Tuesday evening, you MUST sign acknowledging receipt by 11:59pm that Tuesday night. Anytime later will result in your settlement being delayed to the next business day, which in this case would be Monday.
Walkthrough: Just before settlement, we will schedule your final walk-through. This typically takes place either the evening before or the day of settlement. If repairs were done, a copy of the receipts should be delivered to me before the walk-through.
If you have any questions please contact me: