So far, so good: You were pre-approved for a mortgage, hired a helpful real estate agent, found a beautiful home and submitted your offer. What comes next? Making an offer is exciting, but it’s only the beginning of the home-buying process. Here are eight important steps that can guide you through to closing:
1. Wait for the response. After your agent submits your offer, the seller has three options: he can accept it, reject it outright, or respond with a counteroffer. If the seller rejects your offer without coming back with one of his own, it may be because your price was too low. It could also be that your offer included certain conditions that were unacceptable to him. Or perhaps he received multiple offers, and one of them was a higher bid. Often, however, sellers will send back a counteroffer, usually asking for a higher price. Or sometimes they’ll request a more favorable closing date or a change in one of your conditions. You must then consider whether or not to accept their counteroffer or make a counteroffer of your own.
2. Hire a settlement agent. Once you and the seller have agreed on an offer, you need to begin the paperwork. A settlement agent (also called a closing agent) can help you through this part. The agent, often a lawyer, can take care of the title search, obtain a property survey, ensure that any prepaid taxes and utility charges are divided fairly and handle any other legal requirements of the sale. If you are selling your current home as well as buying a new one, the settlement agent can also work with your lender to make sure you meet all your mortgage obligations and that all the funds are properly disbursed.
3. Get a home inspection. It’s always a good idea to make your home offer conditional upon a home inspection, if the seller will accept it. A professional inspector can identify trouble spots such as a cracked foundation or a rotting roof. A specialized inspection can also be conducted to detect the presence of termites. You can then request that either such problems be fixed or the price be reduced to compensate.
4. Arrange home insurance. Your mortgage lender will require that you take out a home-insurance policy to protect your home and the lender’s investment. Find out if any special coverage must be included (flood insurance, for example) and shop around for the best deal.
5. Start packing. Even though your moving day may be months away, start boxing up seldom-used items now -- packing takes a lot longer than you may think. If you’re planning to use professional movers, call around and get quotes from two or three companies. The pros can also provide you with boxes and tips for efficient packing.
6. Redirect your mail. In all the chaos of moving, it’s easy to forget basic things such as asking the post office to redirect your mail, or changing your newspaper and magazine subscriptions. Remember to notify your utilities, financial institutions and anyone else who needs to know your new address.
7. Prepare your kids. If you have young children, help them prepare for the move by talking about the changes they’ll experience. Reassure them that they will make new friends and that their current friends can still visit (if that’s realistic). While you’re at it, contact their new school as soon as possible to inquire about registration.
8. Close the deal. Before closing day, be sure to get a copy of the final settlement statement (also called a HUD-1) from your settlement or escrow agent. It will list all of the final closing costs for you to review and give you a chance to make sure there aren’t any discrepancies. Then, all that’s left at closing will be to sign those final documents, pay the outstanding balance and you will get the keys to your new home.