If you think you get anxious between the time a home is listed and your actual tour appointment, wait till you put an offer on a home! It is nerve-wrecking to say the least and you will second guess yourself a bunch. Even after the offer is accepted and the contract is signed, you are still not quite out of the woods yet, so start a “to-do” list and keep yourself organized, because it will get overwhelming quick. From our personal experience, here is what to expect once the house hunting is over and the buying process begins.
1. Write the Earnest Money Check. The amount will be included in the contract and we had two days to give it to our Realtor after the contract was signed. Think of it as a deposit… the money is to “hold” the house and show you are serious about the offer. Your lender will receive a copy of the check and they will take it into account during closing.
2. Read and Sign Your Lender’s Documents. We were provided documents to read, documents to e-sign (Good Faith Estimate – GFE), and documents to print, sign, scan and email (Uniform Residential Loan Application.) Even though these are initial documents to start the process and you will be given final documents later on, read everything, review them carefully, double check the numbers, and ask questions before signing. (Note: If you are like us, and got a pre-approval six months ago, you will need to provide updated personal documents like bank statements, pay stubs, etc. to your lender.)
3. Schedule the House Inspection. Ask your Realtor for references and be mindful of the due diligence time period in the contract so you get this done in time. We were there during the inspection, and I would recommend for you to be there too because there is a lot to learn and a lot of small details you would normally miss. The inspection lasted around three hours and we were given the report that same night.
4. Schedule a Termite Inspection. Lenders sometimes request a Termite letter and we had to get one. This inspection was pretty quick, because the owner’s exterminators were there the previous month for maintenance. We had the house and termite inspection done on the same day (Friday) and we got the letter the following business day (Monday).
6. Post-Inspection Contract Addendum. Using the house inspection report, your Realtor will add an addendum to the contract were the seller will agree to fix some, most, or all of what the inspector found and recommended to fix. In our case, the sellers took care of most of the items and gave us an allowance to fix one of the items ourselves. Your Realtor will send this to your lender. As a general rule of thumb, ask your Realtor before sending/forwarding documents.
5. The Appraisal. If nothing major is found during the inspection, the appraisal is the next step. You do not have to be present for this one, and the appraisal is scheduled by your lender but paid by the borrower (you). During this step you are looking for the house to hopefully appraise for more than what you paid for.
6. Lock-In Your Rate. If the appraisal goes well, your bank will go ahead and send you more paperwork to sign and lock-in the interest rate.
7. Homeowners Insurance. You are the one who decides who will be your provider, so the approximate monthly cost that your lender uses on estimates will likely differ from the actual. Shop around for quotes.
8. Closing Instructions. Once all of the above is ready to go, the attorney’s office (our attorney was selected by the lender) will send you an email with instructions regarding where the closing will take place, and wire transfer instructions for the down payment and closing costs.
9. Transfer Money. I doubled checked with our bank two weeks before closing to make sure I knew what the steps involved were. The money has to be already transferred at the time of closing for everything to go smoothly, so I decided to wire the money a couple of days before closing just in case. If the actual settlement fees are a bit lower than what you wired (the number you got from your lender), you will get a check for the difference during closing, if they are a little higher you can write a personal check for the difference.
10. Closing Day. It was very quick and informal. Sign a bunch of papers, meet the sellers, shake hands and you are done!
11. Schedule Contractors. We wanted to remove the popcorn ceiling and install new carpet before moving in. We started getting quotes the month of our closing and scheduled contractors and movers.
12. Utilities. Ask the sellers what date they will be cancelling their utilities. If you are having work done on the house before you move, make sure the contractors have at least water and electricity. Turn on water, power and gas. Cable can wait until you actually move in.
13. Pack and Move. Congratulations, you have completed the buying process! If this is your first home, the hardest part is behind you (although buying furniture is not that easy), but if you are like us and still have a house to sell, congratulations you are half way through the buying/selling stress.