Buying a Home, Part 3

You have found your home and you and your REALTOR® have successfully negotiated with the seller. Now what?

First, pat yourself on the back for making it this far through a very emotional process. Then, get ready for your next tasks: home inspection, homeowners insurance, loan commitment, and getting ready to move! This phase will take approximately 45-60 days.

Home Inspection

Part of the purchase agreement will address the home inspection. Within the inspection period (~5-10 days), you have the opportunity to hire a certified home inspector, review the report, and work with your REALTOR® to ask the seller to fix any issues.

It is extremely important that you use a qualified, certified home inspector. Your REALTOR®will most likely have several to suggest. The inspection can cost between $250 and $500, and you will be paying for it at the time of the inspection. The inspection will take about 1-2 hours, and while you don’t need to be there, you should be. This will be a great time to ask questions about long-term maintenance as well as any defects that are found.

After the inspection, the inspector will produce a written report, which will list material defects (issues related to structure or safety, or anything that will cost $500 or more to fix), marginal defects, and suggestions. Work with your REALTOR® to figure out which defects you want the seller to address. Your REALTOR® will put together a property inspection addendum to the purchase agreement with all requests.

Hopefully, the seller will respond and agree to everything requested. However, this does not always happen. When you receive the response from the seller, you need to decide whether the seller is adequately addressing everything you’ve requested. If not, you do have the opportunity to cancel the purchase agreement within the specified timeframe, and you should be able to receive your earnest money back.

Loan Commitment

At the same time that you are scheduling the home inspection, you need to work with your lender to finalize your loan. Your REALTOR® will send the accepted purchase agreement to your lender. Your lender will then ask you for quite a bit of documentation, including (but not limited to): paystubs, past taxes, and bank statements. It is vital that you respond as quickly as possible with all requested documentation. Any delay here can delay your closing.

The lender will also be ordering the appraisal to make sure that the home is worth the purchase price. Most of the time, the appraisal checks out successfully.

Homeowners Insurance

Your lender will also require that you obtain homeowners insurance for the home. If you currently have renters’ insurance, that insurance provider probably also has a home policy available. In addition, your REALTOR® may have insurance providers that can be recommended. Again, time is of the essence. Any delay in obtaining homeowners insurance can delay your closing.

Preparing to Move, the Final Walkthrough, and Closing

Finally, you get to prepare for your move! You will need to start packing, booking movers (or calling friends!), and planning when you are taking possession of your new home. Don’t forget to transfer all utilities into your name as of the date of possession.

Your REALTOR® will work with you to schedule a final walkthrough. Ideally, this will happen after the sellers have moved out and right before closing. This is a final opportunity for you to make sure that the home exists in the same condition after the sellers have moved, and that everything you purchased (appliances, etc.) has been left behind.

Assuming that no discrepancies are found in the final walkthrough, you proceed to closing. Your lender will advise the exact amount you will need to bring to closing to cover the remainder of the down payment, and you will need to bring a cashier check. The closing process will take about 1-2 hours, and this is where you sign all the paperwork to set up your mortgage and transfer the deed into your name. At the closing table, you will also receive at least one key to the home (the other keys will probably be in the home, waiting for you).

And that, my friends, is how you go from “For Sale” to “Welcome Home”.

Congratulations! You are now officially a homeowner!