Once you make an offer on a home and your offer gets accepted, many people think there is not much more to it and that the home is virtually theirs. But hang on, there’s a lot more left before you own that home! Since we’re at the start of the home buying season, I wanted to use this article to explain the steps of what goes on in a typical transaction for a buyer purchasing a home.
- At this point, you’ve already met with a mortgage lender so you know what you can qualify for (unless you are making a cash purchase), you’ve found the home you want to buy, and your offer has been accepted. You are now in escrow!
- Escrow is opened with a title company. Your real estate broker opens escrow by sending a copy of the sales contract and addendums to the title company, as well as the lender (if applicable) and you (the buyers).
- Your broker will take your earnest money check and either deposit it into their client trust account or directly to the title company, depending on the length of escrow and the real estate office protocol.
- If this is a cash purchase, you provide your broker proof of sufficient funds. If you are obtaining a loan, you typically have 3 business days to formally apply for the loan.
- Your broker will order any inspections that you requested in the inspection addendum. This most commonly includes a home inspection, pest report, and in rural areas, pumping of the septic tank and septic inspection, as well as a well flow report and water quality testing.
- Your broker goes to all inspections and reviews the reports with you. Based upon the results of the inspections, further negotiations and/or repairs (repair addendum) may be necessary between you and the seller. Copies of any addendums need to be provided to the title company and lender, if applicable. Once any requested repairs have been completed, your broker either requests receipts of the repairs and/or may inspect the repairs with you.
- A seller disclosure form, in which the seller discloses any known issues about the property, is provided. You typically have 5 business days to review the seller disclosure and find it to your satisfaction.
- A preliminary title report will be ordered by the title company. Once the title report is received, you typically have 5 business days to review and determine if you find the report to your satisfaction.
- If you are obtaining a loan for the purchase, your lender orders an appraisal of the property.
- Once these items have been satisfactorily completed, your broker will remind you to look into obtaining homeowner’s insurance.
- If not already completed, your broker will transfer your earnest money to the title company.
- Once all repairs are completed and all parties are ready to close, your broker prepares a receipt of reports and removal of contingencies for signature.
- Your broker works with the title company and lender to coordinate the timing of closing.
- Your broker will provide you with a list of utility numbers so you can set up utilities in your name upon closing.
- Your broker shall review the estimated settlement statement and let you know how much money is required to close.
- Your broker goes with you to the title company while you sign your closing documents.
- Once the property records into your name, your broker contacts you about the transfer of ownership. Your broker also arranges to get you keys to the property.
Congratulations…You are now a homeowner!