Congrats, you’re offer has been accepted by the seller! First and foremost, you must celebrate! Not sure what comes after popping celebratory champagne? We break it down below!
What is the due diligence period? Listed in your purchase agreement, the period is generally between 10 to 30 days, and it is the time give to complete an appraisal, conduct a title search, complete a home inspection, secure your lending, and purchase homeowners insurance. Be sure to check if any of the items are attached to any contingencies as well.
Earnest money, also known as a good faith deposit, lets the seller know you’re serious about buying their home. This is a top priority for you after your offer is accepted, so tackle this first! Earnest money is the cash that you will deposit into your buyer agent broker’s account – it is usually 1 to 2 percent of the sale price. Once you get to the closing table, that money will come back to you so you can complete the purchase of the home.
Schedule an inspection for your future home as soon as possible. If major issues are found and the seller isn’t willing to make repairs, this could be a deal-breaker. Even with new constructions, a home inspection can uncover defects or minor issues. A general inspector will look at the HVAC, roof, structural integrity, and find other noticeable repairs that need to be completed. If a specialized inspector needs to be hired, they will let you know as well. Once the inspection is done, your real estate agent will review it with you and help you decide what repairs to ask the seller to make.
After your mortgage lender receives the sales contract, they begin the process to secure your loan. With this comes a lot of paperwork. You’ll need to submit things like income tax returns, W-2s, bank statement, pay stubs, rental history, and credit verification. Check in periodically with your lender to keep track of the progress as well.
Before you close on your future home, your lender will need you to purchase homeowner’s insurance. Like other types of insurance, it’s important to shop around and carefully read the policy to know what’s covered and what’s excluded, what your deductible is, and if you need to purchase any additional insurance, like fire or flood, that isn’t included.
The seller is required to call and cancel utility services as of the closing date, although it is common practice to leave the utilities on an extra day in case there are any glitches. As the future owner, it’s your responsibility to call utilities companies to have them setup in time for your move. In general, make sure you complete this task at least two weeks before your closing date.
Close to the closing on your new home, you should do a final walkthrough with your real estate agent. This is to ensure that the seller has completed all agreed-upon repairs. Unless something major is noticed, this is not the time to request any additional repair requests.
The final steps after your offer has been accepted is to schedule the closing on your future home. The purpose of a closing is to finalize the sale – you’ll review and sign all necessary documentation. You, the seller, real estate agents, and the title company representative usually are present at the closing. Once the closing is complete – the seller will pass you the keys and you can move it and start building a new home!
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