You’ve worked with your realtor to find the perfect house. Now it’s time to make it yours. Read on to discover how the closing process for home buying works — from making an offer to signing the final paperwork.
1. Making the Offer
An offer on a home is a formal, written contract. If the seller accepts your offer, it is your obligation to pay what you offered.
Your realtor will usually provide you with a form, which will ask for the amount you’ll pay, earnest money, who pays closing fees, and so forth. It may also include certain contingencies and disclosures, to protect all parties involved.
The seller will accept your offer, reject it, or change the terms and make a counteroffer. Once you both agree (and you’ve paid any earnest money) you’ll move on to the next step.
2. Getting a Home Inspection
As soon as you make the offer, reach out to a professional home inspector to have them go through the house. They’ll notify you of any problems they find.
With this information, you can revise your offer. If the property has far more damage than you thought, your offer may also allow you to get out of your purchase agreement entirely.
3. Applying for a Mortgage
Ideally, you’ve applied for a mortgage in advance, and gathered supporting information like bank statements and tax documentation. Once your offer has been accepted, you can submit documents about your particular home to the lender to finish your application.
Read through your loan estimate ASAP. You or the seller will also have to arrange a house appraisal, which may result in the lender changing the amount they’ll give you. At the end of the mortgage negotiation process, you’ll receive the final terms of your loan in a document called a closing disclosure.
This is also a good time to get homeowners insurance. You may also choose to get title insurance, in case there are any problems with the title.
The Final Steps of the Closing Process
You’re almost there. At least a day before you close, arrange to wire the funds to the seller. You should also do a final walkthrough of the property.
On the day you sign for the house, you’ll have done most everything already, and closing should just be a matter of signing papers. Make sure you bring all your documentation with you, and read through everything you sign. You may want to bring a lawyer along to see you through the process.
The closing process can be a long, complex journey. But with a little knowledge going in and an experienced agent, you’ll be prepared to handle each step, making the closing process as painless as possible.
Get started on the road to owning your dream home, schedule a tour of Light Farms today!