Home Buyers: Before Reaching the Closing Table “Be Proactive.”
Once the seller accepts your offer, there are a few things “you” the home buyer should be aware of before reaching closing day.
Once you “the home buyer” signed on the dotted line the real work begins. Everything from the loan process, disclosures, home inspection, and final walkthrough are very demanding and deserve your complete attention. Keep in mind. As you make your way to owning a home, there are some key things to focus on once the home buying process begins.
Let’s start with your home mortgage loan! Most home buyers need to secure a mortgage home loan to buy a home. As a matter of fact, securing a mortgage plays such a vital role to buying a home. Mortgage interest rates fluctuate daily, and even “if” you decide to lock-in your rate for 45, 50, or any number of days. It is important to know that “if” for any reason you exceed the allotted number of days of your lock-rate, you potentially may have to pay a higher rate.
You don’t want to wait until it’s too late, especially for those with a rate-lock. There are some things that can stop the loan process such as illegal renovations, open permits, etc. Make sure you are communicating with your lender and make sure there are no roadblocks for your lender to ensure you have a smooth journey to the closing table. Keep in mind – losing your rate-lock because it expired can be an expensive proposition that’s most likely avoidable.
As I mention – the mortgage process is vital to the home buying process. And even though some buyers feel once they’ve completed the loan application and once they’ve submitted all of their paperwork, their loan is ready to go and approved.
Hold on to your horses. In fact, some lenders verify income, check your credit and assets all the way till the very end. Avoid making any changes to your finances until after the closing date. Buying a new car, changing jobs, even getting a new credit card is not recommended without talking to your lender first. Keep in mind – even insignificant changes to your finances can throw a wrench into the mix and affect your ability to be approved for a home loan.
Property disclosures! Soon after you sign the purchase contract and it is accepted – you should receive the seller’s disclosures and any required reports. In most real estate markets, sellers are required to complete a sequence of disclosures regarding knowledge and familiarity with the property. By law, the seller must disclose property defects “as well as” anything that would negatively affect the property including neighborhood nuisances. And depending on your real estate market – you may even receive these disclosures before you make an offer.
Besides the seller’s disclosures – you should have the opportunity to review building permits, flood/earthquake maps, and any local or state reports. Don’t be afraid to ask questions about what you’ve learned. You’re required to sign off on these disclosures and reports so take your time and review everything carefully. However, once you sign the seller’s disclosures and required reports, your initial deposit is at risk if you don’t close escrow.
Inspect before you buy! One of the most critical aspects of the home buying process is a property inspection. Once a buyer gets an acceptance from the seller the property needs to be inspected. Buyers need to know what to expect going into the home inspection.
During the home buying process, you’ll have a period of time to do a home inspection. Keep in mind – buying a home is a significant purchase and will probably be the most significant purchase you make in your lifetime, and when you buy a home you want to be sure you know the condition of it.
A trained expert will do a thorough home evaluation of a home’s condition. The home inspector will conduct an impartial, in-depth look at the property. The home inspection is not designed to point out small latent problems of the home. The home inspection discloses to the buyer the condition of the foundation and the condition of the structure including all accessible portions of the structure, including, under the home, attic, & basement. The home inspector will point out the condition of the heating/air system, the plumbing, the doors, windows, and the electric system and list any problems, as well as any potential problems.
It’s up to the home buyer to hire a qualified home inspector and pay for it. The cost of the inspections varies dramatically, depending on the property, the size of the home, the scope of services and region. A basic range around $350 -$550, but that’s just what a typical home inspection runs in Long Beach. On a typical home inspection, the buyers should plan to spend roughly 2 to 4 hours for a typical single-family home; that’s enough time to do a thorough home inspection.
The final walk-through! Depending on location and agency, the final walk-through is an ascetic event, and in others, it’s merely a box to check. Here’s the deal. In most real estate purchase contracts, the buyer is permitted to do a final walk-through up to 24 hours before the closing. I highly recommend buyers be sure to take advantage of it.
Why? There are many reasons why a buyer should do a final walk-through. Before going to the closing table and signing you want to make sure the home systems are working, the seller has made any agreed necessary repairs, and of course “the seller has moved out.”
If things aren’t as they should be, the final walk-through allows you to postpone the closing until they the house is in the promised condition. It is important to keep in mind – once the home closes, not only is the home physically yours but also it’s completely your responsibility.
After the final walk-through – the good news is, the actual closing should be seamless and smooth.
In California, the two parties (both buyer and seller) don’t usually meet up at the closing table. Buyers separately go to escrow, sign their loan documents and wire the rest of their downpayment. And the sellers separately go to escrow, sign off on the deed and receive their funds electronically.
The easiest way to a smooth closing is to be proactive during the entire home buying process. Be on the lookout for red flags, do a ton of research, and have a professional Realtor by your side and on your team. The home buying process varies by market, and that’s why it is so important to get as much information upfront so you can avoid any and all unpleasant surprises.