You’ve applied for a mortgage, found the perfect home, and put down an offer. After your offer is approved, what happens next?
An experienced real estate agent can help you walk through all the next steps to get successfully to your closing when you get the keys. But there are things you should know to make sure the process goes as quickly and smoothly as possible.
Secure a mortgage
“Many new homeowners don’t know that just because you got a preapproval from one lender, doesn’t mean you are required to get the home loan from them,” says Margi Hamilton, a broker at RE/MAX Suburban, The Litsa Lekatsos Team, in Glen Ellyn, Illinois.
Shopping around for the perfect loan can save you thousands of dollars. You should meet with at least two or three lenders and compare their loan options and rates.
It’s not just about getting the best mortgage rates, too. Ask a lot of questions, and if you don’t feel comfortable with them, walk away. This is someone you will be revealing a lot of personal and financial information with for a few months.
You can also lock into a loan. Some closings can take from 45-60 days, and some can possibly take even longer. So, if your lender allows you to lock into a certain interest rate before they go up, then do it if you feel comfortable with that number. But only do it if you know it’s the best you can get and have checked around.
Schedule a home inspection
Even though you love the house you are about to buy, it still needs to go through an inspection. Also, lenders require an inspection before you buy the home.
An inspection usually takes place about 10 days after the offer is accepted. Hidden problems might be found on the roof, with the water pressure or the furnace – areas you wouldn’t normally check yourself. You may also want to pay for a termite or pest (such as rodents) inspection or a radon/asbestos inspection. Inspections are also your responsibility to pay for as the buyer.
But if the inspectors find something, sometimes you can use the estimates of fixing the problems to lower the price of the house or have the seller fix them before the deal goes through. This can be a big money saver.
Your real estate agent or lender might have some good referrals for you if they have been in the area long enough. No matter who you decide to go with, first see if they are members of the National Association of Home Inspectors, the American Society of Home Inspectors or the International Association of Certified Home Inspectors. Many states also have statewide associations.
Inspectors aren’t going to know if there is mold behind showers or bad electrical wiring in the kitchen unless lights flicker, but they’ll inspect is everything they can see, and as the buyer, you should follow them around to take notes yourself. The inspections can take several hours.
Schedule an appraisal
Most lenders require that the property be appraised, and usually the lender also finds that appraiser. You’ll get a report, just like you did from the inspector, showing the value of the home. If it is appraised less than what you have offered to pay, you might be able to negotiate with the seller to a lower price or make a bigger down payment to offset a higher appraised price.
Hire an attorney
Some states require a real estate attorney for the closing. Others just use title agencies. But having an attorney who knows real estate law and has gone through home purchase documents many times can help you feel assured that everything is written correctly before you sign anything and will be there at the closing for you.
“Ninety-five percent of the time, our clients have really taken our references for attorneys. Real estate is their primary job, and they can hold things up and get the job done on time,” Hamilton says.
Purchase homeowners insurance
Before getting your mortgage, a lender needs proof that you will have homeowners insurance. You’ll need to secure an insurance policy and start paying it before the closing.
Like with mortgage rates, you should be shopping around for the best insurance rates. Also, check to see if you need to get flood insurance or insurance riders for things such as a swimming pool or trampoline at your new house.
Do one final walk through
You get one more chance to do a final inspection of the home you are going to purchase a few days before the closing. Just make sure everything is where it’s supposed to be and things are in the same condition you saw it before.
Many people don’t understand that their real estate agents can help them in many areas before a closing. They aren’t there just to show you houses.
“I’ve gone to properties two or three times before the final walk-through to help the buyers get estimates for removing carpet, putting in new floors, and more. People want to move into their house but they want to get the stuff done quickly,” Hamilton says.
Hamilton helps her buyers, too, by giving them a little package of all the pertinent information they will need once they move into the house such as what day the trash is picked up, the email addresses and phone numbers to the utility companies available in that area, and information about their town, chamber of commerce and other stuff.
“What a lot of people don’t realize is there is a lot of communication between the buyer’s realtor and the seller’s realtor to keep things moving as fast as possible,” she says.