It’s finally happened. You found a great house available on the market, toured it, made an offer, and your offer was accepted by the seller. Congratulations! But this is only the tip of the iceberg. Now that you and the seller have shaken hands on your intent to transact, it’s time to bust out the checklist and get your agents involved.
Now that the hard part is over, now that your bid has been accepted, what next? As a homebuyer, this gray area between bid-accepted and purchase-closed can be confusing. We’re here to help you understand the next stage by laying out your best actions step-by-step.
1) Schedule Inspection and Appraisal
As soon as your offer is accepted, have your agent call their reliable home inspection and home appraisal connections. As real estate professionals, they will have worked with many of the inspectors and appraisers in town and know who to call for good, friendly, and accurate service.
The home inspector will look closely at every corner and stairstep to ensure that the house is in a safe and livable condition. It’s their job to detect signs of leaks or dry rot behind the fresh layer of paint and stager’s furniture.
The appraisal is for the bank, assessing the monetary value of the lot and structure itself, beyond current market demand pricing.
2) Order a Survey and Title Check
Next, make sure the property itself is all in good order. Consider ordering a survey of your property to help define exactly where your lines are in comparison to neighbors. This will tell you if the fence line is correct and whether to expect property line-related drama sometime in the future.
Even more importantly, however, is getting a title check. The title check confirms that your seller is the sole or authorized owner of the property and that the property can be sold legally, as-is, without a lien.
3) Ask for Concessions, or Offer Them in Negotiations
Now it’s time to negotiate. Sit down with the seller, their agent, and your agent to determine the right way to approach the negotiation. Some sellers are silent and wait for you to make a negotiating point first. Some have a few very specific negotiation points they want but would be willing to sway on other subjects. Work with your agent for assistance in conducting a fair, friendly, and effective negotiation as you and the seller prepare to close the deal.
You can ask for concessions, especially if the house “failed” certain inspection items you want to be repaired. Or you can offer concessions to incentivize the seller to move faster, cover more closing, or offer a slightly better price.
4) Secure a Homeowner’s Insurance Policy
Every new homeowner needs homeowner’s insurance. To be frank, you want that policy before the house is even officially in your hands. A homeowner’s policy from Day 0 means that nothing can permanently go wrong. During the moving process, additional coverage is a great idea. Moving insurance and property damage insurance as you make the household transition protects the home you’ve just purchased (or are about to purchase) from any unnecessary disasters during a time when you should be the most joyful.
Put a little time into building your homeowner’s policy. Choose a few policy add-ons that make sense for your region like flood or sinkhole insurance.
5) Purchase Title or Mortgage Insurance If Below 20% Equity
If your equity is below 20%, meaning you put less than 20% on the down payment, then you will also need to take out mortgage insurance, sometimes called title insurance. This protects the bank if you skip out on the mortgage after taking the loan. This policy pays the bank if you should become unable to pay for the rest of the loan.
Once you have reached 20% equity, you can cancel your mortgage insurance policy.
6) Complete Negotiations; Review Terms
Now is the time to complete your negotiations. You, your seller, and your respective agents have had time to think the situation over, look at the inspection reports, and consider which negotiation points you care about most. If everything else is settled, this is often the stage where the contract is sent to legal professionals for review, and everyone makes sure their best interests are covered before the document is signed. Let your real estate agent be your guide as you draft the final version of the home selling contract.
7) Triple-Check Your Finances and Mortgage Plan
Before you close, triple-check everything. Make sure your finances are in the right place for this and take a peek at your credit score. Check to make sure your income can support the cost of house maintenance and the mortgage along with an otherwise full lifestyle. Check the mortgage terms and make sure you are 100% familiar and comfortable with them.
It can be helpful to visit your financial advisor and mortgage lending agent to ensure the purchase you are about to make is well-aligned with your current finances and will leave you, as a new homeowner, in good financial standing.
Once you’ve done the triple-check, you are almost to the point where you can relax and enjoy one of the most exciting times in your life, becoming a homeowner.
8) Have Your Lawyer & Agent Review the Closing Contract
Once the terms are complete, have a legal professional look over your selling contract to make sure it is legitimate, fair to both parties, and hasn’t missed anything critical or typical. It is very common to hire just a few hours of a lawyer’s time to have your papers checked.
9) Do a Final Walkthrough
As you prepare to close on the house, take one last walk through the building. Check every door, appliance, and floorboard. This home is about to be yours and everything should be perfect. Whether you’re planning to DIY a shabby-chic transformation or bargained for final repairs and touch-ups before your move-in, make sure everything is how you want it to be before you sign that contract in finality. You can absolutely plan renovations after purchase but have those renovations already planned and priced when you negotiate for the house.
10) Sign the Contract, Purchase the House
Finally, you’re ready to sign the purchase contract, activate your mortgage, and buy that house. Buying a home is an incredible feeling, whether it’s your first house or your tenth. Closing means the house becomes yours and your initial escrow payment goes toward your first year of property taxes and maintenance costs.