#1. Be Patient.
Buying a home can be one of the most exciting and stressful times of your life. It is easy to become overwhelmed. Through it all, the most important thing to remember is to be patient. The average closing takes between 30-60 days from the signing of the contract to the closing table. This may seem like an eternity, but rest assured, there is a lot to do in that period, as you will see below.
#2. Get Pre-Approval for a Mortgage.
Before submitting an offer on a house, you should apply for a mortgage pre-approval. It is better to work with a local lender if possible, as closings will typically move faster. Your lender will guide you through this process, and you will need to work diligently with them to secure financing. The pre-approval process will also allow you to better understand how much house you can afford.
#3. Do not make any drastic career or financial decisions during this time.
Changing jobs or careers during the home buying process can affect your ability to obtain a mortgage and close on the sale. Lenders will look at your financial history and any disruptions or significant changes can make them more reluctant to lend.
#4. Do Your Homework when House Hunting.
Do your homework when searching for a house. Make sure that the house is not just the right house, but that it also fits within your budget. You should compare prices of similar homes in similar neighborhoods. It is also a good idea to see what price homes in the neighborhood have sold for in the past.
After you have toured several houses, and narrowed your choices down to one, it is time to submit an offer. Once your offer is accepted, you will sign the purchase contract. Now things will move quickly for the next two weeks.
#5 Have an Attorney Review Your Contract.
The very first thing you need to do after signing your contract is to contact an attorney. This is very time sensitive. The standard real estate purchase agreements have an attorney approval contingency requiring attorney approval within 2-3 business days. This means that your attorney needs to review and approve the sale within that time.
Your attorney will review your contract to make sure that it is fair to you and identify any potential issues. After the attorney completes the review, they will issue a letter to the seller’s attorney approving the contract or disapproving the contract with proposed changes. This process usually takes a day or two. A good thing to do during this time is to speak with your attorney or their paralegal regarding what documents they will need from you.
#6 Get Your Home Inspected.
After the attorneys send their approval letters, you should arrange to have the house inspected. If you do not know any inspectors, your attorney can recommend one to you.
Your inspector should be thorough and not afraid to get on a ladder and poke around. After your inspection, a Property Inspection Notice and Addendum (PINA) will be completed by you and the seller. The PINA will be included with the purchase contract.
#7 Have a Closing Checklist and Use it.
Then the process will slow down – a lot. Draft a checklist during this time of all of the items that you will need to complete before closing. Ensure that your lender’s requirements will be met, price out and pay for your first year of Homeowner’s Insurance, start packing, pick up a new hobby or just relax. While this is going on, your attorney is working to obtain approval to close on the house from your lender’s attorney.
And, then the fun begins again.
Once you get the final “clear to close,” and the closing is scheduled, arrange for a final inspection of the house. At this time, you and the seller will need to determine who will have the keys, garage door openers, key codes, etc. to the house post-closing. A day or so before the closing, you will need to call the utility companies and municipal water to have the bills changed to your name.
Your lender will give you a Closing Disclosure Statement three days before closing that lays out how your loan is going to be disbursed and any checks you will need to bring to closing. Your attorney will walk you through this and answer any questions that you may have.
Attend the closing, sign your name 200 times (give or take 100) and, surprise! You are now a homeowner.
Having an experienced attorney review your contract and guide you through the home buying process is the best way to ensure a successful closing. For more information, please contact our office for a free consultation.
Disclaimer: This blog is made available by Kloss, Stenger & LoTempio for educational purposes only. It is not intended to provide legal advice nor form any attorney client relationship between the reader and Kloss, Stenger & LoTempio. You should always seek professional advice from a licensed attorney for any legal questions you may have.