8 Steps After The Offer Is Accepted
Congratulations your offer is accepted and your home is under contract. However, that doesn’t mean you’ve reached the finish line. There are still a number of important steps that must be completed before the purchase of the home is finalized. Below is a list of the 8 other steps to owning your home after going under contract.
1. Trust / Earnest Money
Trust Money is put down before closing on a home to show you’re serious about purchasing. It’s also known as a earnest money. When a buyer and seller enter into a purchase agreement, the seller lists their home as pending while the transaction moves through the entire process to closing. If the deal falls through, the seller has to re-list the home as active and look for a new buyer. This can be a huge set back for the seller. Earnest money protects the seller if the buyer backs out outside of their agreed upon terms in the buyer and seller purchasing contract. The Trust Money is held in an escrow account until the deal is complete. The exact amount depends on what’s customary in your market. At the end of the process, the Trust Money is applied to the buyer’s down payment or closing costs.
2. Inspections are Completed
Inspections begin way next. Your inspections are usually completed within a week of a home going under contract. Any issues that arise should be reported to the real estate agents involved. Following the inspection, buyers and sellers will have a time period to reach an agreement on any necessary repairs. Once the buyers approve the status of the home, after inspection, an appraisal should be ordered by your bank or lender.
3. Appraisals are Completed
The appraisal of the home will generally occur within a week following the inspection. If the sale price of the home matches the appraisal value determined, the sellers need not take any further action. If, however, the appraisal is lower than the asking price of the home, a negotiation may need to occur to ensure that the buyers are paying a fair price for the property. There are also bank and lending requirements in regards to the appraisal price.
4. Securing Home Owners Insurance
Before closing on a new home, the buyer should search for home owners insurance. Send the companies a copy of the MLS listing on the property. It is possible they will request additional details as well. After you have selected your insurance, both the lender and title company will need the information of the home owners insurance selection and rates.
5. Mortgage Details are Determined
After the appraisal, the lending process will move forward. The contacts will likely go to an underwriter who will put a final review on the purchasing deal. Then the bank or lender will send their final packages to the title company. These packages will disclose final interest-rate and mortgage payments.
6. Transfer Utilities
It is also important to check with the seller as to the date when utilities will be shut off at the property. The buyer should have water, sewage, and electric transferred into their name before moving in. Do not forget to contact gas companies if the house is on gas as well. If there is a lapse in coverage for utilities it could potentially result in damages to the home. Make sure your start date and their end date are coordinated to the same days.
7. Walk Throughs
On the day of closing, prior to the time of closing, make sure to have a final walk through to check one last time that the home and property are still in the exact condition outlined on the appraisal and inspections. This step might seem redundant, but failure to complete it might result in an unexpected and unfortunate surprise for the new homeowners.
8. Closing on the Property
Once the appraisals are done, your mortgage goes through, and the pricing details are discussed, you are just about done with the journey to home ownership. The final step is to get the “clear to close” and arrange a closing day. Make sure everyone brings ID and any other important closing documentation to the closing. After another round of intense paperwork and signing, it’s time to start planning the house warming party.
Having a home under contract is no small feat, and should be considered a major step in the process of buying a property, but it is not the end of the operation. The period between signing the contract and closing on the house is essential for getting questions answered and for learning as much as possible about the property and the details of the exchange. Make sure to be aware of all the important details and actions that need to be completed to ensure that the contract leads to the smooth sale of a home.
For more information about your real estate closing contact us here or call us at 865.671.0617. Also check us out on Instagram to stay up-to-day on everything happening at Crossland Title Co.