The Home Buying Process
What Happens Next
Now that you have decided to buy your home, what happens between now and the time you legally own the home? Your Agent or Your Attorney may handle the following items.
There are several primary steps you’ll take over the next 30 – 60 days of your contract if you’re purchasing a re-sale property.
· Delivering Due Diligence and Earnest Money Fees
· Applying for your Mortage/Loan
· Getting Home Inspections
· Coordinating with the Closing Attorney
· Final Steps Before Closing
· Going to Closing
Due Diligence Fee: This is the non-refundable fee the buyer(s) pays to the seller(s). The amount is negotiated during the contract negotiations. The check is to be made out to the seller(s). It is delivered to the seller’s agent or seller once the contract is fully executed. As long as the home closes, the due diligence fee is applied to the buyer’s closing at the time of closing.
Earnest Money: The earnest money amount is negotiated during the contract negotiations. This check is made out to the Seller’s Real Estate Company’s escrow account or to the Attorney holding the fee in their escrow account. It is refundable up until 5:00 on the day of due diligence. After that time, it becomes earned by the sellers. As long as the home closes, it is applies to the buyer’s closing at the time of closing.
Apply for your Loan: Unless you are paying cash, once the contract is fully executed by all parties, the buyer should apply for their loan right away. The buyer or the buyer’s agent should send the fully executed contract to the loan officer. Once you submit the loan application, it is usually subject to a credit check, an appraisal, and sometimes, a survey of the property. *NOTE: It is very important you use a lender who is reputable, knowledgeable, and competent. You should ask how many of their loans close on time.
Getting Loan Approval: The loan approval process can feel invasive and stressful for some. Keep in mind, you’re asking someone (an entity) to give you thousands of dollars. Doesn’t it make sense they’ll want to verify you are who you are, you make as much as you make, the property appraises, and you’ll pay them back? At this point, your lender will begin the approval process once you apply for your loan. This will include a credit check, ordering the appraisal, documenting your financials and a variety of other verifications. It is very important you cooperate with the lender and expedite the information requested.
Home Inspections: Your agent will discuss with you the different home inspections you may want to consider. You’ll want your agent to schedule these right away. Keep in mind, if you do not close on the home, you’ll be responsible for the cost of the home inspections. Speak with your agent regarding attendance at the home inspection.
Inspection Repair Negotiations: There will always be something on the home inspection as no home is perfect. There are many factors that go into what repair items will be done. It is very important you work closely with your agent to determine what should be expected. Your agent will negotiate the repairs for you.
Schedule Closing: Your Agent will assist you in choosing an attorney. Once you’ve decided on an attorney, the agent will schedule your closing based on the closing date agreed to in the contract. The attorney will perform many tasks including a title search, checking the property taxes, checking the HOA fees, searching for liens, ordering survey in needed, and more.
Document Preparation: The lender’s loan package will be sent to the attorney prior to closing. The attorney will prepare these along with appropriate forms for conveyance and settlement.
RIGHT BEFORE CLOSING:
Utilities: You should contact the appropriate utility company at least 3 days prior to closing and have utilities transferred on the day of closing. If needed, your agent can give you a list of utility companies for the home you’re purchasing.
Final Walk Thru: It is customary for the buyer to do a final walk-thru the day before or morning of closing. The purpose is to insure everything that should be in the house is in the house, confirm home is in same condition it was at time of contract; confirm seller has removed all personal items, Insure agreed upon repairs have been completed. In most cases, this will take only 15 minutes. In some cases, it could take longer.
Settlement Statement: You will receive a copy of your settlement statement for review prior to closing. It is important you review for accuracy. Your lender can review with you and you can review with your agent as well.
Closing/Settlement: The closing attorney will oversee the closing of the transaction: seller signs the deed, you sign a new mortgage, the old loan is paid off and the new loan is established. Seller, agents, attorneys, surveyors, Title Company, and other service providers for the parties are paid. Title insurance policies will then be issued to you and your lender.
For a one-time charge at closing, title insurance will safeguard you against problems including those events an exhaustive search will not reveal.
What to Bring: You will need to bring your drivers license or other photo identification as well as certified funds to the closing made payable to the attorney. Ask your agent if there is anything else needed.
When Do I get the Keys: In North Carolina, the property officially belongs to the new home buyer once the deed has been recorded. This may happen hours after closing. It will not happen until you have given the attorney your certified funds and the amount you’re receiving from your lender has been deposited into the attorney’s account. It is best not to plan to access the property until after you’re fairly certain these things have taken place unless you have confirmation from the home seller they will give you the keys at closing.
Final Notes: There are many behind the scene things your agent will do for you. These are the basics. Please discuss all loan questions with your lender and everything else with your agent. We’re here to help!