Here is a step-by-step list of the details that must be taken care of between the time you sign a contract to purchase a house and the time you close.
The contract will specify a date for closing, and that gives you a general timeline for completion of these tasks. The closing is usually 4 to 6 weeks after the offer to purchase has been accepted.
1. As soon as the contract is signed, apply for any financing you need to complete the purchase.
Before you began the home buying process, you may have been pre-approved by a lender -- but now you must give a copy of the signed contract to the lender you have chosen.
If you were not prequalified, you must apply for a mortgage. During the process, you must furnish the lender information about your assets, debts and credit history.
2. On the first business day after the contract is accepted, the listing agent will deliver your earnest money check and a copy of the contract to the escrow company.
The earnest money lets the seller know you are serious about wanting to buy the home. The escrow company is a secure third-party approved by both you and the seller. The money is held in escrow until all the terms of the agreement are met, reducing the risk of fraud.
3. Schedule a home inspection as soon as possible, for the first available time. We recommend that the inspection be done within 7 days of the offer to purchase. Your Tyre Realty Group agent can make recommendations for inspectors.
The inspector will examine the home inside and out to make sure the structure is sound and the systems are functioning properly. (Find more details here.)
You should attend the inspection. The inspector's written report will be ready in about 48 hours.
4. When you receive the inspection report, review the results. If there are no issues that must be addressed, your agent will notify the seller that you have accepted the inspection.
If there are any problems, you may want to renegotiate the home's purchase price to reflect the cost of any repairs you will need to make. You could also keep the purchase price the same but try to get the seller to pay for any repairs. Or you can cancel the contract and back out of the deal. Your agent must notify the seller or the seller's representative your decision in writing.
Your Tyre Realty Group agent is a knowledgeable ally during this sometimes difficult negotiation process.
5. Most contracts require a document stating that the home has no termite infestation. If a licensed specialist discovers any termites or other wood destroying organisms, treatment and repair may be needed. Who pays for this termite inspection and any repairs necessary is determined by the contract terms.
6. Then it's time to notify your lender to set up a home appraisal. The appraisal is an educated guess of how much the property is worth. You can't borrow money for a mortgage without an appraisal, so it's a critical part of the process. Here are more details.
It usually takes 3 to 5 days for the appraisal to be scheduled and conducted, and the results should be ready in 7 to 14 days.
7. After the appraisal process is complete, the lender can make a decision about your loan application. The lender will consider the appraised value along with the information about your income, credit and assets. If your loan is not approved, you will be able to cancel the contract -- however you will lose any earnest money.
8. You need to call your insurance agent to get quotes for homeowner's insurance. The insurance must be arranged before the closing and the policy must have enough coverage to satisfy the lender.
9. You need to select a real estate attorney to handle the closing. Your Tyre Realty Group agent can help you select an attorney that meets the requirements of both your contract and your lender.
The attorney does a title search to make sure there are no issues with transferring ownership. The attorney also will prepare the necessary paperwork and handle the receipt and distribution of all money required in the transaction.
And the attorney will handle the closing -- a meeting between you and the seller to sign the papers that make the house yours.
10. About 3 days before your closing date, call the gas and electric company (in Greenville, NC, it's Greenville Utilities) and ask to transfer your new home's utilities from the seller to you. If you have a telephone land line or cable television service, arrange for them to be set up in your name as well.
If you are purchasing new construction, it may take a bit longer to apply for and set up services.
11. You must get a bank cashier's check for the amount of money you are required to pay at the closing. You usually will not find out the amount until the day before -- sometimes even the day of -- your closing.
Your attorney will calculate the total. It includes money for:
Note: With most mortgages, the lender puts property taxes and homeowners insurance in escrow. Those charges will be figured into your monthly payment, and your lender will pay the bills when they are due. The lender needs to collect a certain amount upfront, to make sure the funds are available to make the payments.
The cashier's check should be made out to the title company. Your Tyre Realty Group agent will give your the name of your title company.
12. Before the closing, you should do a final walk-through of he property to confirm that it's in the same condition as it was when you agreed to purchase it. Your real estate agent will schedule this. Here are more details.
13. For the closing -- usually at your attorney's office -- you should bring a driver's license and a the cashier's check for the closing costs that you will owe. The seller will bring keys to the house, garage door openers and codes for the alarm system.
14. At the closing, you and the seller will be signing a lot of legal documents. Your real estate attorney will explain them as you go along. Make sure you understand what you are signing. Ask any questions you may have before you sign.
After all of the documents are signed and the cashier's check collected, you are the owner of the home!