You have spent lots of time house hunting with your Realtor®. You’ve narrowed down your choices to the home of your dreams and have made an offer.
Your real estate agent calls. Your offer has been accepted. You are on your way to becoming a homeowner.
But there are still many steps to take before you can call that house your home:
Apply for a mortgage loan
Unless you have enough cash to pay for the home, you’ll need to apply for a mortgage loan. You’re probably preapproved for a loan, since most Realtors® insist on it before taking you on as a client. Meet with your loan officer right away to start the application process.
Be prepared to deal with a lot of paperwork and questions, and lots of back and forth between you and the lender. If you are patient and cooperative, it should all go smoothly.
Get appraisal and home inspection
If you are getting a loan, you will need to get an appraisal and a home inspection. Both are very important.
An appraisal will give you a detailed report on the value of the home. A trained appraiser does this. If the home’s appraised value is less than the purchase price, you will either need to make a greater down payment or negotiate with the seller to lower the price. You won’t get a loan for more than the appraised value.
A home inspection will tell you if there are any major issues with the home. You’ll want an inspection even if you aren’t getting a loan. Go over the report in detail with the inspector and make sure that you know how serious any problems are. The inspector will tell you about minor issues as well as major ones and explain what needs to be done to correct the problem. You may be able to get the seller to pay for necessary repairs or lower the price to adjust for the cost.
Get your funds ready
Make sure that the funds you need for closing are accessible. If you need to pull money from an investment, do it right away. Keep the paperwork for the transaction to show your lender that you liquidated funds to get your down payment. You’ll need a cashier’s check at closing.
Get insurance for the property
In most cases, homebuyers are expected to pay for homeowners insurance up-front, before closing. Your lender will need proof of insurance before approving your mortgage.
Plan for moving day
You will need to start packing. Create an organizational system to make it easier on you and the movers. Start asking for recommendations for movers and get price quotes.
You will be allowed to do a final walk-through of your new home 48 hours before closing. This allows you to make sure that the items that should remain (per your contract) are still there and that no significant damage has occurred since your offer was accepted.
If you find problems, you can postpone the closing to give the seller time to make repairs. It is important that you catch every problem during the final walk-through. If you spot them after closing, they are your problem.
This is the day when you sign the mortgage documents and officially gain ownership of the property. It takes at least an hour. Most likely your Realtor® will be there, as well as the seller, the seller’s Realtor®, the closing officer and perhaps the mortgage broker.
You will need to bring ID and a cashier’s check to pay closing costs, which you will know in advance. Your spouse will also need photo ID. In some states, spouses are required to attend and sign papers even if they aren’t on the mortgage. Check with your Realtor® about this.