From Offer to Keys – An Overview of the Purchase Process

I love first time home buyers.  They are excited, curious and terrified.  They ask great questions, want to be really involved in the process and are always so much fun.  As someone who has purchased four homes of my own and helps people buy and sell homes everyday, I often forget that first time home buyers have no idea what to expect from the process of buying a home.  So here is a quick guide on what to expect when you buy your first house.

Step 1: The Offer:

Once you find the home you love, it’s time for the big ol’ stack of paperwork.  Your awesome Realtor will guide you through the process.  Your offer will likely include several contingencies, the mot common being the financing contingency and the inspection contingency.  In a perfect world, you submit your well crafted offer and the seller accepts.  The tight inventory of todays market can make it a bit more complicated than that, but for the sake of brevity, we will leave it at that. 🙂

Step 2: The Contingencies:

Now that the offer has mutual acceptance (both the buyer and seller have signed and agreed upon offer), you have a very specified amount of time to do a lot of things:

1) The inspection:  If you had an inspection clause in your purchase and sale contract, you only have ten days from the date of mutual acceptance to find an inspector, schedule the inspection, have the inspection completed, review the inspection findings, and submit your inspection response to the seller.  I counsel my clients to have the inspection completed within three days of mutual acceptance to leave plenty of wiggle room for potential issues that may arise.

2) Financing:  Ideally, you would have already had a pre-approval letter from a lender prior to submitting your offer.  Once you are in mutual acceptance, you have 5 days to make your official, written loan application.  Failure to meet this deadline can cause a bunch of trouble, including losing your earnest money if you fail to get financing for the home.

3) Title review: A title that is free and clear of all liens and encumbrances is very important to the sale of the home.  The sellers will provide a copy of the title report and a copy of the title insurance policy for the buyer to review.  Once the buyer receives the preliminary title report, they have five days to review it.  After the five days, the buyer can not get out of the contract based on findings in the report without losing the earnest money.

Once you have completed all the time frames for your contingencies, there are still several steps you need to take.  During the week or two before closing, you will need to line up homeowners insurance and get the insurance information to your lender.  You are also allowed to do a final walk through of the property a few days before closing.  I highly recommend that you do so, just to eliminate any surprises after closing.

The final step:

Signing the papers!  The appointed escrow company will draft all the required documents to close the transaction.  One of the most exciting parts of the process is going to the escrow office and signing the biggest transaction of your life.  A common misconception is that the moment you sign the paperwork, the house is yours.  Not true.  The documents have to be signed by both the seller and the buyer.  Then the funds need to be appropriated to the correct parties involved.  Then the transaction has to be recorded at the court house.  In most cases, the buyer will sign documents then two to four days later, the transaction is officially recorded and the home is yours.  And that’s when my favorite part of the whole process happens.  I hand you the keys to your brand new home.  It warms my hearts every time!

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