The Four Phases of Buying a Home - Phase 4
Contract to Close:
Set up escrow.
Deposit earnest money.
Set up home inspection.
Appraisal.
Final approval.
Final walkthrough.
Sign loan documents.
Get the keys.
Are you ready to take the next steps toward buying or selling your home?
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Video Transcript:
Planning After Your Offer is Accepted
The home buying process consists of four main phases: preparation, home search, offering, and contract to close. It is crucial to watch the videos on each phase to understand the entire process thoroughly.
Phase 1: Preparation
This is the most crucial step in the home buying process. Make sure to watch the video explaining this phase before moving on to the subsequent phases.
Phase 2: Home Search
This phase involves finding a property that you genuinely love and what to expect during the home search process.
Phase 3: Offering
This video explains how to determine what to offer on a home and what to expect while putting in an offer on the property.
Phase 4: Contract to Close
Once your offer is accepted, what should you plan for and expect? The contract to close phase varies from two days to six months, depending on the buyer's pace and the availability of homes of interest.
After your offer is accepted, you typically have a 30-day close period to take possession of the home and become the legal owner. Until then, you are in a pending status, meaning no other buyer can purchase the property as long as you close on it.
Contract to Close Coordination
Our team's contract to close coordinator will help you coordinate your earnest money and the various other components involved in closing on the home. This involves coordination with the escrow company, title company, lender, and listing agent. Earnest money, like a deposit when buying a house, is not an additional cost. It reduces your cash to close dollar for dollar. The amount you put down as earnest money varies and can affect the strength of your offer.
Home Inspection and Negotiating Repairs
We will help coordinate your home inspection with one of our vetted and verified inspectors. The buyer pays for the home inspection, but it is money well spent as it helps identify any significant issues with the house. If there are any necessary repairs, we will negotiate with the seller for either fixing the issue before closing or providing a credit for the cost to fix the problem. The inspection contingency in the real estate contract allows you to back out of the transaction for any reason if something significant comes up during the inspection or if a reasonable agreement with the seller cannot be reached.
Appraisal of the House
After the home inspection negotiation process, the appraisal is conducted by a neutral third party hired by your lender to ensure the home is worth what you are paying for it. If the home does not appraise for the contract price, the seller must either drop the price to the appraised amount or put the home back on the market. The cost of the appraisal is part of your closing costs, which are paid directly to your lender at closing.
Final Approval and Walkthrough
Once the underwriter at the mortgage company approves your loan and the appraisal, we will conduct a final walkthrough a day or two before the closing day. This is to ensure all inspection issues were fixed, all appliances that are supposed to stay are still there, the home is reasonably clean, and the seller has moved out.
In summary, the contract to close phase involves coordinating earnest money, conducting a home inspection and negotiating any necessary repairs, getting the home appraised, obtaining final loan approval from the underwriter, and conducting a final walkthrough before closing. It is essential to understand each step of the process and plan accordingly to become the legal owner of your new home.