If you’ve been concentrating on just getting an offer accepted, you get to this point and feel lost. No worries! Below is all the information you need to get you through to closing. Warning: it’s A LOT of information; I suggest printing it out and put it on your fridge so you can check off each step as it’s completed. Also, this information is based on the promulgated One-to-Four Family Residential Contract (Resale) specific to Texas. Also, if you’re purchasing a condo, you may have slight changes/additions to what is listed below. I suggest checking with a trusted realtor for specifics in your state.
□ Option Money/Earnest Money – Option money is an amount you give to the seller to take his/her home off the market so you can have it inspected and give you some time (usually 5-10 days) to make a final decision on whether you plan to move forward in the purchase or to terminate the contract. Earnest money (usually 1% of the purchase price, but could be any amount) is money you put up to show the seller you’re putting this offer in earnest; you’re a serious buyer. Option money is given directly to seller, but upon closing if this box is checked, will be returned to you. Earnest money will be delivered to the title company or other third party (law office, Title and Abstract, etc.). While earnest money says, “upon execution…”, this and the option money are usually delivered within three days of execution date. These can be delivered by the buyer, the agent, or sometimes the law office or title company can send a courier to pick up and deliver.
□ Execution Date - Your offer is accepted and executed (meaning last agent to approve signs and adds that date). This is the point where all deadlines originate.
□ The survey (and T-47, which is an affidavit stating what, if anything, has been changed) should be delivered to you within a reasonable amount of time, if not already.
□ Seller’s Disclosure, if it hasn’t already been provided to you, should be provided within 2-3 days from execution date of contract. Or, if you’re purchasing the house for an investment, and it doesn’t matter to you what shape the house is in, then you would check the box that the Seller does not need to provide it.
□ Inspection – you’ll want to schedule this as soon as possible to allow plenty of time for actually having the inspection, getting the report back, reviewing it, possibly needing to get other people out to give specific estimates (i.e. if the inspector notes the roof has some damage, you may want someone out to give you an estimate for that repair), and offer, if needed, an amendment to the contract to have repairs completed or ask for money in lieu of repairs.
□ Behind the Scenes - Once the amendment for repairs is signed and executed, things will seem to slow down. You won’t hear much from anyone, but know that the title company, mortgage specialist and agents are all working to get this transaction to closing by the date on the contract.
□ DO NOT make any major purchases or open up any new lines of credit prior to your closing date. These actions will have a negative effect on your credit score and it could impact your ability to close.
□ Homeowner’s Insurance - Please contact your insurance company and get a homeowners’ quote. Please deliver that quote to your lender ASAP if you have not done so already. The insurance should be effective your closing date. If you were able to negotiate a home warranty policy, relay this to title so it will also be credited back to you from sellers at closing.
□ Buyer Approval. This means the buyer must have met underwriting qualifications from the lender. This should happen in about 2-3 weeks. Your lender is processing all the paperwork in order to get you the loan you’ve requested by closing. Always make sure you get all requested paperwork to them as soon as possible. Delaying on your part will most likely cause a delay in closing, which could mean extra fees, more taxes, etc.
□ Final Walk through – I always recommend a final walk through prior to your closing time just to make sure everything is in proper order with the property. If you find an issue, delay closing until you can reach a resolution. If you close before a resolution is made, then you have accepted the house as is.
□ Closing! This is when you become a homeowner!!! Plan on arriving at the title company 10 minutes prior to closing time. You will need to bring your driver's license with you. Plan on closing taking about an hour. (Credits you will receive at closing will include the option check that was paid, the earnest money, and Taxes prorated from January until your closing date). Once everything is signed, it will go back to lender for final approval. Once they approve, they will fund the transaction and you will get your keys! This could take a few hours to a couple of days, depending on who you use (so choose wisely, young padawan).
s always, you know you can text, call or email at any time with any questions!