It has been a journey to get where you are…. getting financed to buy a home, going to open houses every weekend, scouring the internet for a new home, and finally getting an offer accepted on a new home. But now what?
Getting your offer accepted is only half the battle.
After getting an accepted offer on a home and going under agreement there are many steps along the way is an opportunity to delay your closing or in extreme cases kill the deal. Lets take a look at the steps to take after an accepted offer that can be a stumbling block for some homebuyers.
What To Do After Getting An Offer Accepted On A Home
The first thing to remember is you have signed a legal and binding contract. There are dates that must be adhered to and steps to be taken to get to the closing table. If anything is missed, it could delay the closing or even get the contract cancelled and your home deposits will be forfeited.
13 Steps To Get To Closing Day After An Accepted Offer
Keep Your Credit Status Quo
It is very important to keep your credit profile status quo. Do not pay anything off, do not open new lines of credit, do not do anything with your credit without talking to your loan officer.
Seemingly innocent an innocent action like closing an unused credit card could impact your credit score significantly enough impact your credit score enough to have your mortgage denied. Or, don’t think opening a line of credit or credit card at a furniture store may not seem like a big deal if you have no balance on it.
Wait until after you close to make any changes to your credit.
Read Your Contract and UNDERSTAND It!
Take the time to read your contract and understand your obligations and important dates that must be met by you. Many missteps are made by homebuyers that unfortunately delay their closing or cause them to lose your deposits, all because they didn’t take the time to understand their contract and in some cases even read it!
Everything you need to know about the sale of the home you are about to purchase is spelled out in your contract. Pay close attention to the contingencies in your real estate contract as well as the associated dates.
But even past contingency dates, your contract will spell out how the home is to be delivered, how a sellers and buyer are to be notified, how the title needs to be delivered and much more.
One of the first things you need to do if you haven’t already is make sure you good faith deposit gets where it needs to go. Most contracts have a provision where the buyer is putting an earnest money deposit in escrow. The contract is not binding until the deposit is received by the escrow agent.
In some states the escrow money is tendered with the offer. But, in many states, the selling agent delivers the check after the offer is accepted.
Make sure your deposit gets to where it needs to be, don’t let your deposit money be a reason your deal is cancelled.
Notify Your Lender
Immediately notify your lender that you have an accepted offer on a home. Your loan officer will get the application for your loan squared away and let you know what documents will be needed for underwriting of your home mortgage.
The lending process is going to be a constant from the time you put an offer on the house until you close on a home.
Be proactive and fill every request from the lender quickly. If your lender is not in constant contact with you, take the lead and contact your lender every few days.
Obtaining your mortgage is going to be the biggest step after have an offer accepted.
You have a short period of time to conduct any home inspections. Schedule a home inspection as soon as you get an accepted offer on a home.
Typically, you will have a 5-10 day period for a home inspection. Do it as soon as possible, so it gives you time to do any due diligence after the home inspection.
One your inspection is done, take the time to carefully read your home inspection report, ask any questions of the inspector and the home seller and call any professionals if there are areas of concern.
If you have any issues with the home inspection, you may be able to negotiate a resolve with the seller or if it is a huge cause for concern totally back out of your contract. But do so in a timely manner, as spelled out in the home inspection contingency in your purchase contract.
Once you have completed all home inspections, let your lender know that the appraisal can be ordered.
The appraisal is an important step in the lending process and it takes time. It confirms the home is worth at least what the bank is lending on for the home. Many lenders will require you pay up front for the appraisal. Pay the appraisal fee immediately.
You want to get the appraisal cleared and confirm the house appraises for the purchase price before the mortgage commitment is due. Do not release mortgage commitment if the appraisal process is not complete by the mortgage commitment date.
Your lender is going to require you have insurance on your home before they lend you the money. In your lenders, eyes, worse than you not paying your mortgage, is the house being destroyed by a fire or other catastrophic event with no insurance coverage.
Don’t wait to the last minute to get insurance coverage. Get several quotes and compare prices and policies to get the best deal you can.
Make sure your insurance coverage coincides with the day you take possession of the property.
A title search will be performed by the closing attorney to make sure the seller can deliver a clean title. But it should be done early in the process to discover any title issues, have them cleared up before closing.
While this piece of a closing is done behind the scenes, you should stay on top of it to avoid any last minute issues. Most title issues are minor, but they do take time to fix.
The most common issue is a previous mortgage has not been properly discharged. While not a big deal, it needs to be taken care of before you can close on your mortgage. And, that usually does not happen overnight.
Switch Utilities And Notify
About two weeks prior to moving, call the utility providers to make sure you have accounts opened and the utilities will be on for your arrival. It costs you nothing to switch account names, but if you forget and the utilities get shut off, it will cost you money to turn the utilities on.
This is also a good time to do an address change with the Post Office to make sure your important mail gets where it needs to go. Take the time to notify anyone that sends you important mail…. service providers, doctors, credit card statements, banking and investments statements, etc…
Switching utilities and taking the time to notify people of an address change won’t delay your closing, but it is an important step in the closing process.
Most purchase contracts has a mortgage contingency allowing for a buyer to receive mortgage commitment by a certain date. If mortgage commitment is not obtained by that date, then the buyer can void the contract with no recourse to them.
Your mortgage commitment is a formal letter from the bank committing to lend you money under certain conditions, for a period of time.
Often the conditions are boilerplate like re-pulling your credit report and verifying employment on or one day before you close on your loan. Other conditions may be more serious, like the bank is still trying to source down payment money and should be discussed with your attorney before releasing mortgage commitment.
Once you say you are all set on your mortgage, you are fully committed to close and if you should default all your deposit money is at risk.
The closing disclosure or CD is one of the most time sensitive documents during the process. Your final CD must be signed 3 days before closing. The Federal three-day rule allows plenty of time to review the closing disclosure and discuss any discrepancies from the initial CD.
The closing disclosure spells out the terms of the loan as well as all the accounting of your escrow money deposit and your closing costs. Make sure you review and sign the same day you receive it.
Don’t skip your final walkthrough. It may have been several weeks to a few months since you last saw the home. You want to take the time to make sure that everything is in working order and the house is being delivered in the manner you last expected and as your contract spells out (in case you agreed to the seller doing repairs or leaving something behind).
Once you close on your home, most contracts state that the home is being delivered as-is. You will not have any recourse after you close.
Schedule your walkthrough, preferably after the home has been vacated but also give enough time to rectify any issues if possible. Unfortunately, some buyers are still moving up to minutes before you close. If that is the case, delay the closing if possible to give time for you to properly view the home.
At this point everything should be all set. You should know how much money you need to bring as well as have had time to do a final walkthrough and review your final closing disclosure.
Make sure you have identification with you as well as a bank check with any money you had to bring for the transaction. The lender’s attorney will not accept a bank check for any monies that need to be brought to the closing.
Schedule your closing early in the day to give time for any last minute hiccups. In many states you do not own the house until the deed is recorded at the registry of deeds. Electronic filing with the registry of deeds has certainly sped up the recording process, but there is a filing deadline in the late afternoon.
Pay attention to the closing steps to avoid any closing delays along the way. The escrow period between the time you have an offer accepted on a home and closing can be hectic. Usually you have 30 to 45 days to close and the pace can be fast.
While these steps may leave your head spinning, working with a competent Massachusetts Realtor or one in any state, will leave you in good hands. A REALTOR, acting in your best interest, will know the steps you need to take and will outline what you need to do.
The escrow period between the time you have an offer accepted on a home and closing can be hectic. Usually you have 30 to 45 days to close and the pace can be fast.
Accepted Offer On A House, Now What? has been provided by Kevin Vitali of EXIT Realty. Thinking of buying a home? Call Kevin, his 20 years of experience will get you effortlessly to the closing table. 978-360-0422.
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