Alright home-buyer, you’re under contract. Awesome! Now, the real work begins. What do I mean? Remember those contingencies we inserted in your contract? Yeah, they need to be fulfilled in order for us to get this property across the finish line. It’s going to go something like this:
- Home inspection within a limited time, typically 10-14 days.
- Home inspection results are negotiated. A number of things can happen if repairs are needed, such as, the seller will make all or certain repairs, or the seller will make no repairs. Either one can happen and that extends the negotiations a little further.
- If the seller does some repairs, they will need to be done by qualified professionals, preferably licensed and insured contractors, and then the repairs are re-inspected for quality and compliance. Proof of payment for repairs will need to be delivered to the closing agent and typically your Realtor.
- If the seller chooses not to do repairs, you can buy the home “as-is”, have the repairs made yourself or you can walk away.
- If repairs are done and agreed upon, the home inspection contingency is removed.
- Loan contingency. As soon as you get your contract ratified, you should be on your way to see your lender with a pile of papers including 2-3 months of bank statements, 2-3 years of tax returns and proof of employment, income and savings. Your ability to pay a mortgage payment will be weighed against your income and expenses. If you qualify, you will receive your pre-approval and you move on to the next contingency.
- Appraisal contingency. You offered a specific price for your potential new home. Your lender will contact an appraiser to go by and do an appraisal. The home will need to measure up to, or above, your offer price or a couple of things can happen. 1. You may need to bring money to the table at closing if the property didn’t appraise for what you offered. 2. You can ask the seller to drop the price to meet the appraisal. 3. You and the seller can each make concessions. You can add money to your purchase and the seller can drop his price. 4. You can walk away.
- If you pass the appraisal, your loan is approved and all repairs are made, you will get a “clear to close” from your lender.
- Once you have the clear to close, you will sit down with your closing attorney, title company or other qualified closing agent and sign a mountain of documents.
- The sale will be recorded in your courthouse and you will receive the keys to your new home.
Those are just the mechanics that happen after the ratified contract. There are just as many issues that you will face during the loan process. That’s a topic for another blog, but you can see that just signing a purchase offer is really just the beginning of the home-ownership process. The mechanics that follow get you the keys.