Being in Windsor real estate for as many years as I have, one of the very best calls to make is to a buyer telling them their offer has been accepted. Once the celebration is over however, it’s time to get back to work. This is when it is critical for a buyer to step up to the plate to ensure that the home closes on time and with little issues.
So what happens next? My suggestion, is to sit down as soon as possible with your real estate agent and create a “to do” list which will outline the next necessary steps to closing on your new property.
1. Follow up with bank:
If you have a pre-approval letter (and it’s always recommended to not start your housing search until you have one), then it’s time to contact your lender to get the ball rolling. Be prepared for lots of paperwork and make sure that the information they require is turned in on time. It doesn’t take much to delay the closing process, so be organized, patient and cooperative and it should all go well.
Your bank will require an appraisal before they will loan any funds, therefore a professionally trained appraiser will visit your new property and determine its value. As a Windsor real estate agent, I am always asked at this point: “What if my house doesn’t appraise high enough?” If your home is valued less than what you are securing a loan for, you will need to make up the difference. For example: If you agree to pay $250,000 for a home, but an appraiser comes in at $225,000, then you need to make up the $25k as you won’t get a loan for more than $225,000. If this happens, the first thing I tell clients is not to panic, as its time to head back to the negotiation table.
Review the appraisal. Your real estate agent will check to see that the appraiser has all the current comps available. Sometimes mistakes are made with appraisals, so review line by line.
Order a second appraisal. Get another opinion. Again, mistakes or inexperience can happen with first appraisals.
Ask the seller to lower the price. If the appraisal came in correctly, then you need to renegotiate with the seller. Maybe the seller will agree and lower the cost to $225,000 or they will ask to meet you half-way, and offer to sell at $235,000. Regardless, the ball is in your court because they know you can walk away. And chances are, they will need to lower the sales price regardless or wait for another buyer to come up with the extra cash. If the home you are buying has been on the market for a while, the buyer may be very inclined to lower the price.
Walk away. If the seller won’t lower the price and the bank won’t loan the money, then consider walking away. Look at it from this point of view: Do you really want to spend more on a home than what it is worth? Based on what our real estate market has been like in the past several years, it may take some time before you build up any equity. No one can predict what will happen to home prices, but it’s never wise to spend more than something is valued at.
Buying a home can be a nerve-wracking experience. But the inspection process can be a nail-biting time for both the buyer and the seller. This is where both parties will discover if there are any issues or repairs needed for the home. And no matter how strongly you feel about a property, do not waive your right for an inspection. Even if you are paying all cash for your home, you never want to ignore this. Attend the inspection along with your agent and ask any and all questions that you may have and then go over the report in detail once you receive. Remember, a bad inspection does not mean the deal is done, unless you want to walk away. Often, sellers will make the necessary repairs or lower the price of a home to adjust for the cost. More will be discussed this in a future blog.
3. Get Funds Ready:
Make sure the funds you need to close on your property are easily accessible. If they are in an account that takes several days to withdraw or requires transfers, start the process. It’s a good idea to keep all paperwork so you can confirm to your lender that the transaction has been initiated. It never hurts to be prepared.
4. Get Insurance:
You will need to show proof of homeowners insurance prior to obtaining the mortgage.
5. Make moving day plans:
Make arrangements for movers if necessary, packing, turning off and on utilities, etc. We will be concentrating more on this in greater detail in the following days.
6. Plan Final Walk-thru:
You will need to go through a final walk-through 48 hours prior to closing. This is to confirm that items you requested in your contract are still there and no damage has occurred since your offer was accepted. If you do find problems, then a closing can be changed so buyer can make the needed repairs. It is important that you make sure you catch every issue during this final walk-thru. Anything that happens afterwards could be your problem.
The day is finally here! Here, you will sign what seems like a volume of paperwork, and then finally, you will be the official owner of your new property. Your real estate agent and mortgage company will provide you with what information you will need for this meeting, but of course, you will need a cashier’s check for closing costs and a form of identification.