Alright! The high-stress part of the homebuying process that is the option period is over. You made record time on scheduling inspections, getting estimates for repairs, and negotiating any contract changes while working with your lender AND getting a homeowners insurance quote. Congratulations! But you still have some work to do before you have a new home. The next steps you can anticipate include the appraisal, getting documents to your lender, turning on utlities, scheduling closing, and having a final walk through of the home.
Typically we like to have the lenders order an appraisal right away, and often the listing agent will meet the appraiser at the property. The lender will get that report back in a day or two if not sooner. The goal for both sides is to see the home appraise for at or above the sales price. If it does not and the lender won't loan based on that, we can either renegotiate the price or back out. Hopefully this situation doesn't happen to you, but if it does, take it one step at a time.
At this point your lender/loan team are likely sending you documents to sign or requests for documents from you. This is what I lovingly call the "whack-a-mole" part of the homebuying process: you need to treat each request from the lender as a mole that must be whacked/responded to as quickly as it pops up. At the end of each month/beginning of the next, they'll want bank statements and other documentation tracking all your money (even down to $100 into and out of accounts sometimes) and they need all that info back promptly. When they have all they need, they'll give us a "cleared to close" notice, meaning all is moving along just fine and we're ready to go. You should also be getting the Closing Disclosure document. This document shows all the costs and fees of various services including survey, title company, etc. They may not send it to your real estate agent directly (new TRID rules) so it's a good idea to forward it on. It's always a good idea to have the lender walk you through it and get anything corrected that needs correcting ASAP.
As the closing date gets closer and everything is proceeding according to plan with your loan, you'll want to set up utilities in your name. Sometimes companies can take up to a week to establish service, so make sure to do this early. It's best to have the utilities turned on the date of your closing. Providers vary by location so make sure to do some research on that early if you have questions.
Closing - How Do You Pay?
Closing is what we call that meeting at the title company where you sign all the documents, hand over a very large check, and ideally get some keys to your new home. You can either wire the down payment amount to the title compay or, more preferred, bring a cashier's check for that amount to the closing table. I recommend carrying a cashier's check to closing simply because wires can inexplicably take days and it's just easier to hand over the cashier's check. Your lender will release their wire for the loan amount directly to the title company hopefully the day before so that it arrives in time for closing. That wire from the lender has to be in the title company's hands, along with the approval from the lender, before we are considered "closed and funded" at which point you get the keys to the house.
Not So Fast - Buyer Walk Through
Coming up to closing, you will want to do a walk through either the day of or day before closing. Prior to this appointment, it's important to make sure you have any receipts for repairs from the Sellers if any were negotiated in the option period. The walk through entails a quick visit to the house to confirm the home is in the condition it was in when you entered into the contract. If the roof has a hole or a wall fell, for example, you do not want to close until Sellers remedy the issue.
Closing Time - Turn off all the lights and...
It's usually best to schedule closing between 11am and 2pm on the deadline day as spelled out in the contract, and that's the time that you'll go to the title company and sign all the documents. Ideally all parties are present for closing, but it's not required. If someone can't be there, you can arrange a Power of Attorney well in advance for someone else to close on that missing person's behalf. The title company typically draws up this document and lender signs off on it. It's great when the Sellers can sign before you do, but if not, it just means you'll get the keys later. Once you and the Sellers have signed, the lender must approve all documents, then if the funds are at the title company, they can be disbursed and you'll be considered "closed and funded." That's when you get the keys and we pop champagne.
Got questions? Let me know! I'd love to assist!
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