Congratulations -
You've Selected A Home...
Now What ?
Table of Contents:
A. Home Buying Timeline
B. Ten Important Questions To Ask
Your Home Inspector
C. The Closing
A. Home Buying Timeline: Time Prior To Desired
Moving Date.
My Moving Date Is? ________________________
2-3 Months (prior to moving)
-Home Inspection
-Closing Arrangements
5-6 Weeks (prior to moving)
-Moving Arrangements
-Monitor Mortgage Process
-Arrange for any School Transfers or Registrations
-Arrange Homeowners Insurance
3-4 Weeks (prior to moving)
-Start Basic Packing
-Make Address Changes
-Arrange for Utilites at New Home
-Purchase Decorating Items (example: draperies)
1-2 Weeks (prior to moving)
-Verify Mover
-Verify Closing Details with Settlement Agent
-Verify any Final Mortgage Details
-Verify Final Walk Through (typically done just before closing)
-Packing
________________________________________________
B. Ten Important Questions
to Ask Your Home Inspector
1. What does your inspection cover?
2. How long have you been participating in the home
inspection profession and how many inspections have
you completed?
3. Are you specifically experienced in residential inspection?
4. Do you offer to do repairs or improvements based on
the inspection?
5. How long will the inspection take?
6. How much will it cost?
7. What type of inspection report do you provide and how
long will it take to receive the report?
8. Will I be able to attend the inspection?
9. Do you maintain membership in a professional home inspector
association?
10.Do you participate in continuing education programs
to keep your expertise up to date?
C. Bringing It All "Home" -- the Closing
After the searching for a home is done, the negoiations have been
completed, the house has been inspected, and the mortgage
has been applied for and committed to, the focus suddenly turns
to the Closing. An understanding of the elements of and players
in the closing, as well as a concise preparation for it, will eliminate
many nervous hours as the day approaches.
What is Involved?
It is the proverbial "signing on the dotted line:" the process
of which will put the title to the house in your name, verify
homeowner's insurance on the property,commit in writing to the
terms of the mortgage, and usually, put the keys to the house in
your hands. In general, you will leave the closing and go to
your new home as a homeowner. The weeks and months of
anticipation are all settled in the short amount of time that
you spend at the closing.
Closing procedures will vary from locality to locality. In some
areas, the buyers and sellers (as well as their Real Estate
Agents) will attend the closing. In other areas, only the
buyers will be present. The closing will take place at the
office of an Attorney, a Title Company, or an Escrow
Company. In general, though, the closing will be attended
by all of the buyers involved and their Real Estate Agent,
as well as the Closing Agent, who has reviewed all of the
components of the house sale and who is the one who will
say "sign here" more times than you have ever heard in
your life!
What forms are involved?
Although there may be additional documents involved,
the primary items which are dealt with at the Closing are:
- The Settlement Statement
- The Contract
- The Loan Papers
- Title Insurance
- Homeowner's Insurance
- The Title of Deed
- The Down Payment and Closing Costs
The Closing is your final opportunity to make certain that
everything related to the purchase of your home is
correct. It is important, therefore, that you do adequate
preparation prior to the day of Closing. Although your
Agent will most likley review all of the items needed to
Close, it is a good idea to be familiar with the process.
The following are the most important items that you
will need prior to or at closing.
-A Closing cost estimate:
-Homeowners Insurance Policy
-Settlement Statement
-Certified Funds
Signing the Deal: Closing / Settlement / Escrow
It might seem as though once a sale agreement has been signed that the buying process is complete. Not only is it not over yet, but some of the most complex aspects of a real estate transaction now begin.
Once a contract for the purchase of a home has been accepted, a series of inspections and checks are typically required to satisfy buyers and lenders. REALTORS® can help buyers complete the transaction process by assisting with the many requirements found in a typical sale agreement. The REALTOR® also helps the buyer prepare for closing, that is, finalizing the sale.
What’s in a Sale Agreement?
A sale agreement sets a purchase price for the home and a series of terms and conditions. For instance:
- Contracts routinely depend on the ability of a buyer to obtain financing and/or sell their current home, which is why most sellers prefer buyers with mortgage preapproval letters.
- A growing percentage of transactions involve a home inspection, or a physical review of the home by a trained and independent observer. Generally the buyer’s agent arranges the inspections, which the buyer typically pays for.
- Lenders will establish numerous conditions before granting a loan. They will want a title exam, title insurance to protect against title errors, termite inspections, surveys and an appraisal to assure that the home has sufficient value to secure the loan.
When Should You Close?
With online transaction management now available, closings can occur within a week in some areas - at least in theory. In practice, it takes time to arrange financing, conduct inspections, obtain appraisals, locate replacement housing, contact movers, pack and actually move.
While instant closings are not practical, neither are closings too far in the future. The problem with closings much past 60 days is that loan rates are difficult to lock in. If mortgage rates go up, it's possible that the buyer will no longer be able to afford the home and thus the deal may fall through.
The result of these considerations is that most homes close 30 to 45 days after a sale agreement has been signed.
What Happens during Closing?
Before closing, buyers typically have a final opportunity to walk through the property to ensure that its condition has not materially changed since the sale agreement was signed.
“Closing” is also known as "settlement" or "escrow." It is usually a brief office meeting to sign the paperwork needed to complete the sale transaction. All necessary papers have been prepared by closing agents, title companies, lenders and lawyers. This paperwork reflects the sale agreement and allows all parties in the transaction to verify their interests.
Settlement is increasingly computerized and automated. One of the best parts of settlement is that there is very little that buyers and sellers need to do. In many cases, buyers and sellers don't need to attend a specific event; signed paperwork can be sent to the closing agent via overnight delivery. Some areas have services that allow most of the transaction to be completed online. If buyer and seller are present, they may be at the same table, or they may complete their papers separately.
Whatever the process, the outcome of the closing is the following:
- Property title is transferred from seller to buyer.
- The buyer receives the keys.
- The seller receives payment for the home.
- From the amount credited to the seller, the closing agent subtracts money to pay existing mortgage and other transaction costs.
- Deeds, loan papers, and other documents are prepared, signed and filed with local property record offices. Usually the closing agent also completes the paperwork needed to record the loan.
- Transfer taxes are paid and other claims settled (including closing costs, legal fees and adjustments).