Home Buying 101 in Bethalto, IL: Part 4 – I Have a Contract, Now What?

Home Buying 101 in Bethalto, IL: Part 4 – I Have a Contract, Now What?

Part 1: Know How Agency Affects You discussed the importance of finding a real estate agent to represent you.

Part 2: Will the Car Fit in the Garage? is about figuring out what is important now in finding your new home.

Part 3: What to Consider When Making an Offer talks about how to write an offer that is realistic and competitive. 

Congratulations on getting your offer accepted!  As we discussed previously, you now have a legal contract and your earnest money deposit will be deposited.  There’s a lot to be done in the next couple of weeks, and there are deadlines that must be met.  You and your agent will be in close contact to make sure everything stays on track.  Here are some things to remember:

• Loan application must be applied for immediately, if it has not already been done.  Your lender will tell you about their requirements for the loan and give you a “Good Faith Estimate” within 3 days.  This will give you a recap of your closing costs and pre-paid expenses.
• The home inspection is not mandatory but highly recommended.  It will need to be scheduled as soon as possible.  The inspection will take 2 – 3 hours and it is very important for you to be there to see things first hand.  You will learn a lot about the home and how to maintain it.  The home inspector will give you a written report that is several pages long.  However, keep in mind the purpose of the home inspection is to discover if there are any serious problems with the home. A serious problem could be something that is detrimental to the structure or the health and safety of those living in the home.  A serious problem is not something such as replacing worn, ugly carpet or a broken doorknob.  Once the inspection is complete, you and your agent will go over the report and decide how to respond.  You have the right to ask the seller to fix those things which are important to you.  The seller may agree to your request, or they may write counter response or reject your request.  Your agent will explain your options to you.

• The city inspection is mandatory in some communities and is not the same as a home inspection.  Whereas a home inspector will spend 2-3 hours thoroughly inspecting your home, the city inspection is usually done in 30 minutes or less.  The seller is not required to pay for the city inspection and / or mandated repairs, but you can negotiate this with the seller.  The home must pass the city inspection before closing can take place.
• The termite inspection is usually required by the lender.  It is customary for the buyer to pay for this except with VA financing.  Again, the seller is not required to pay for treatment or repairs if infestation and/or damage is found.  But you do have the option of declaring the contract void if an agreement cannot be reached between you and the seller.
• An appraisal will be ordered by your lender.  An appraisal is not the same thing as a home inspection.  The purpose of the appraisal is to prove to you and your lender that the property is worth what you have agreed to pay for it.    The lender will not lend more than the appraised value. In the event the appraisal comes back with a value lower than the contract price, your agent will explain your options to you.

While you are busy working on your to-do list, there are several others who are working to put the rest of the puzzle together so that the closing can take place as agreed in the contract.

Your lender will be working on your loan commitment, the title company will be doing a title search on the property, and your agent will be managing the entire process.  All agreements or changes to the contract must be in writing and signed by all parties of the contract. DO NOT add debt (credit card, new car, furniture, etc) or spend money you have set aside for closing.  DO NOT change jobs or quit your job before closing as it could severely affect your loan.  Talk to your lender before you make any changes.

You’re in the final stretch now!  In Part 5 – Understanding Why Title is Important I’ll explain which options are available to you in Illinois and the differences between each.

Real advice. Real answers. It's Real Estate simplified. Helping buyers and sellers negotiate and manage their real estate transaction successfully.  

For real estate help in the Bethalto, Wood River, Alton, Godfrey areas email Stacie at stacie@mybethaltohome.com