First Time Buyers; You Have an Accepted Offer. Now What?
First time buyers should understand the process a bit before going into it, as it will spare them some emotional expense, and being forearmed with what preparations to have made in anticipation of an accepted offer will go a long way towards also saving them time and headaches.
It also doesn't hurt sellers to understand this process as well, so they have an understanding of time frames from the buyers' side of things.
Here are items you need to be aware of and accomplish between the date your offer is accepted and the closing date. Good agents like our Ohio Realtors will prompt and help with some of these.
An Accepted Offer; A First Time Buyers Next Steps (Within 10 Days)
- Contact Your Mortgage Lender and Protect Your Credit: It's time to move from pre-approved to qualified and apply for the actual mortgage (there is a difference). Also you may feel like celebrating after getting an accepted offer, but avoid temptation. I've seen many deals go South because a happy couple whipped out the credit cards to buy home décor items all the way to a new car and a drop of even just a few points on your credit score can have an adverse effect. Your credit will be reviewed again, days before the closing.
- Order the Inspections(s): Home inspections, though not required, are absolutely a good idea. Having a professional inspection of your potential new home might cost a few hundred now, but could save you thousands in unforeseen home repair down the road, and the inspections are usually done within ten days of the acceptance date. It could be a general whole house inspection or could also include termite and radon inspections in addition.
- Order the Appraisal (If the home inspections were satisfactory): The mortgage lender will begin processing the loan and order an appraisal for your new home, and too, an appraisal universally recommended to not be ordered until after satisfactory inspections have been completed. Do let your lender know if you intend on inspections and it's highly recommended that you do. Buyers are required to pay for appraisals upon order, but may recoup the expense at the closing table, especially in transactions where sellers are paying most of the buyer's closing costs.
- Work with your Realtor who will prepare a Post Inspection Agreement: This document that your Realtor prepares will detail your repair requests, have you sign and then submit the document to the sellers via the seller's listing agent. Seven days is the typical amount of time to negotiate over repairs. Some buyers will take the extra step to have any agreement reviewed by a real estate attorney for peace of mind over any legal and financial issues if any repairs pan out to be very extensive or costly.
- If you are Leasing or Renting, Notify Your Landlord: Make sure you notify your landlord in a timely many that you are purchasing a home. Most landlords and property managers require a thirty day notice if you are moving, and you don't want to forfeit any deposits you may have made.
- Practice Patience: Buyers that are financing need to understand the time to arrive at the closing table varies based on many factors; the type of loan, the amount of the buyers' down payment, the borrower's credit score, the number of loans that are being processed and size of the mortgage lender's team, etc. Expect a typical time frame of three to eight weeks to close.
Within 30 Days of an Accepted Offer
- Arrange home insurance coverage: The majority of lenders require you pay one year's home insurance premium up front, so be prepared for this expense and ready to acquire a policy from a reputable source.
- Obtain A Mortgage Commitment Letter: Connect with your mortgage lender and get this important document completed. It may seem like things have "died down" at this point of the process, but be assured your life and credit profile are being further scrutinized, and your file is now being heavily worked on by the underwriters. Get this letter, touch base with your mortgage lender frequently and stay informed of this process and status of this highly necessary document.
- Select a Mover and Begin Making Arrangements: Around 30-45 days ahead of the closing date, start making arrangements and choose a reputable mover. Don't make set a firm date and time until you have confirmation of both the financial commitment letter and good confirmation of the closing date.
One to Two Weeks Before Closing
- Call your utility companies: Make arrangements to have your services transferred to your new home. Don't forget to have the current services discontinued; they are not disconnected automatically in most cases. This would include gas, electric, cable and internet. If your new residence has city water, this is handled by the seller's agent. If the home you're purchasing is heated with oil, you may incur the cost of any oil left in the tank at closing.
- Confirm Available Funds for Closing: Just as you're keeping a careful eye on your credit, keep an eye on your cash and make doubly sure you have the funds necessary to bring to the closing table. Your mortgage lender will have given you a "Good Faith Estimate" or GFE of the amount needed. If not, you'll need to contact them right away.
Make final arrangements with your movers.
1 to 2 Days Before Closing
- Arrange a time with your Realtor to conduct a final walk through of your new home. In all likelihood everything will be fine, but everything should be in the same condition as when you first put your offer in. I personally recommend that we visit the home on the way to the closing location. Once you're handed the keys, it's "your baby now" with no recourse.
- Verify the date, time and place of closing. I personally make sure my clients are made aware of the day/time and location of the closing with ample notice.
- Verify with your mortgage lender the amount of the certified or cashier's check you'll need to bring to the closing.
Gather, Prepare and Bring the Following Items to the Closing:
• Picture I.D. (drivers license, passport, etc.) The closing attorney will need to make a copy of it for the registry of deeds. (please make sure that is not expired)
• Personal checkbook. In case you have to pay for any incidental charges such as heating oil, bottled gas, taxes, etc. that have already been paid by the seller.
• Certified Check in the amount given to you by your lender.
• Your personal attorney, if any.