You found the home you want and your agent submitted an offer. You are now entering the time frame known as Contract to Close. It is too early to celebrate because there is lots to do over the next 30 – 60 days. This process can be stressful but a good REALTOR and LENDER can help smooth the way.
Be ready to negotiate with the seller. Depending on the housing market in your area you may or may not have the upper hand. The seller can reject your offer, give you a counter offer, or accept your offer as written - which rarely happens in Lubbock.
Your ideal or preferred closing date will be included in the contract. In Lubbock, TX it typically takes 30 – 45 days to close a deal. Know that even if both parties agree to a date, there can be delays in closing. The most frequent delays I see are due to lender processing. To minimize delays you should stay in touch with your lender and get them any documentation they need promptly and ask them if all is on track.
Once the contract price and terms are agreed on by both parties you will need to schedule an inspection. The inspection should take place as soon as possible since the inspection and any subsequent repair negotiations should take place during your option period. The option period in our area is normally 10 days.
Don’t freak out as you review the inspection report. You will see things marked as ‘deficient’ but you are invested at this point; you have decided this is the home you want, you have paid for the inspection, so ideally you will negotiate and move forward with the purchase. Your agent can write up an amendment asking the seller to repair items. In lieu of repairs, a seller will sometimes lower the sales price or give an allowance. If no agreement is reached you can terminate the contract.
The home has to appraise for the sales price or more or the bank will not give you the loan. Even if you and Mr. Seller agree on a sales price the appraisal can come in lower. One of my buyer’s last year got to purchase the home for $5000.00 less than they had agreed to pay! Woohoo! In many cases the seller is sort of stuck and will sell their home for less but some seller’s may owe more for their home than its appraised value. Owing more than a home appraises for is sometimes referred to as being ‘under water’ and if that happens your purchase may be dead in the water.
Even though you are excited and anticipating what you will need for your home, don’t go on a shopping spree. Don’t buy a new car and even if your boss is being impossible, don’t quit your job. Your lender will run your credit again a day or two before closing. If your income to debt ratio shifted, or credit score tanked, then you won’t get your home loan…or your home.
If you plan to do some updates, NEVER order custom cabinets, counter tops, or drapes before you close on your home. Even a day before closing something could go wrong and then you will not only be crushed about losing the home you wanted but also out a lot of money.
Your agent will schedule an appointment a day or two before closing for you to do a walk through of the home. At this time you can tour the house to be sure everything looks okay and check on repairs that were done (if it is something you can check). You should also be provided with invoices for any work the seller paid to have done on the house.
If you have any hope of moving into the home on the day of closing, schedule your appointment at the Title Company as early in the day as possible. You will have possession of the house upon closing AND funding. Your lender reviews your documents and transfers the money to fund the loan. Funding is usually later in the day or sometimes the next business day.
On the day prior to closing, you review your closing statement which breaks down your expenses and gives you the amount to bring to closing in the form of a cashier’s check. The closing may take around an hour and the escrow officer will explain all documents to you as you sign. You may have wrist fatigue from signing all those forms but at the end of the day you will have purchased your home!
You want expert guidance when it is time to buy or sell a home. Call me for a free, no-obligation consultation about any real estate needs!
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