Congratulations on your offer being accepted! You have worked very hard to get this far, but there are many more steps that need to happen in order for you to purchase the home.
Earnest Money (EM) – This amount is outlined in the Purchase and Sale Agreement, and is typically about 1% of the purchase price. This amount has to be submitted via cashiers check or personal check to either Coldwell Banker Trust, or the closing company. This check must be received within two days of mutual acceptance (MA) of the purchase and sale agreement. This money is credited towards your closing costs or down payment at closing.
Inspection – This is a very important part of the process. In most cases you have 10 days from MA to perform any and all inspections that you want on the house. The first one would include an overall Home Inspection, you pay for this home inspection because it is for your knowledge and your property. I have three inspectors that I use and their information can be found under My Resources on my website. I always recommend that the buyer attends the home inspection because it is a good educational opportunity to learn about the house. If there are any additional inspections you want to make at this time you can have those scheduled as well (sewer line scope, roof inspection, crime inspection of the neighborhood, and any others you would like) After the inspection we have the opportunity to ask the seller to make any repairs that you feel are necessary in order to move forward with the home purchase. If the sellers are not willing to make the repairs you have the opportunity to back out and get your EM back.
Insurance – Home Owners insurance is very important and your lender will require you to carry it on the house as long as you have a loan on the property. You should shop a couple places before you decide on one carrier. You also want to make sure that this premium is a reasonable rate, if for some reason it is not and you do not feel like you can afford to carry insurance on the house, you also have the opportunity to back out of the agreement and get your EM back.
Documents – I will gather all the signed documents and get them over to your lender so that they can start working on the file. They will then contact you with questions and documentation that they may need.
Appraisal – If all terms of the inspection have been agreed upon then we move forward to the appraisal. The appraisal is ordered through your lender and is a third party to the transaction. They are sent to look at the house and assess value and make sure that there are no safety concerns with the house. Shall the appraisal come in below value there are three options that can happen, 1) the seller can come down on the price 2) the buyer can come up with the difference in cash 3) if neither parties agree upon these two options, then you can back out of the offer and get your EM back.
Processing – This is the longest part of the entire process! This is when the bank will be processing all of your documents, and verifying all of your assets. They will ask for OODLES of documentation and sometimes you will ask the WHY WHY WHY… but my advise is, give it to them, and give it to them as quickly as possible. Every time that they ask for documentation the quicker that you get it to them the more likelihood that the deal will close on time. The entire file then goes into final underwriting where they verify everything on the transaction. After everything is through underwriting they will distribute the Closing Disclosure (CD) this is a document that you are required to acknowledge and you have to have for 3 days prior to signing the final paperwork. This document goes over final interest rate, payment details, and all other terms of the loan.
Final Steps – During the 3 days we will do a final walk through of the house to make sure that all terms of the agreement have been met. If all terms have been met, we will make an appointment with the closing agent to sign the paperwork. Typically you will sign the paperwork one day, and then the next day is when the loan will actually fund and the transaction will be recorded at the court house. The house is not yours until it has been recorded at the court house, then I will give you keys and the house is YOURS!!
If you have any questions on this process please don’t hesitate to ask, I am here to make this process as smooth as possible!