Making a purchase offer that the seller accepts is the easy part. The next phase is the escrow, inspection, and appraisal, phase, and it can get pretty complicated depending on the circumstances. Being prepared is key to overcoming any obstacles that might hinder your home purchase.
The initial purchase agreement is the first major legal step toward transferring home ownership. Keep these things in mind during this part of the purchase process:
A title company and/or attorney will serve as the closing agent. Their job is to make sure all legal requirements of the transaction are met. The closing agent holds title and deposit and escrow. They will conduct thorough research to verify that the property title is free and clear by date of closing. Any new encumbrances are added as necessary. Properties are often subject to restrictions such as building and parking. There may also be easements and encroachments that affect the property and limit your use and rights. It's important that all of this be clear prior to final closing.
There are different ways to hold title to a property. And each has its own financial, legal, estate, and tax implications. This is especially true upon title transfer. Consult with an attorney or title specialist to determine what works best for your specific needs.
After the seller accepts your offer, you will need to hire a licensed property inspector to inspect the home within an agreed upon timeframe indicated in the purchase contract. You may want to hire more than one inspector and compare inspection reports. You may also want to hire inspectors that specialize in certain areas like HVAC, roof, foundation, etc. Contact us today for a list of our recommended and highly trusted home inspectors.
Once the inspection report is complete, there are three possible outcomes:
It is important to remain in close contact with your lender, who will notify you whenever additional documents are needed to move along the purchase process and finalize your loan. Make sure you submit all documents as requested and in a timely fashion. Otherwise you can unnecessarily hinder the purchase process.
If the purchase agreement is contingent on financing approval, your lender will send an appraiser to asses the value of the property. A professional appraisal assures the lender that your property is worth more than the loan in case of default. The appraiser will consider square footage, location, building costs, age, recent sales, and more in determining value.
When you are within a couple weeks of closing, talk with your lender and make sure all your documents are in order. It will avoid any potential hiccups.
If your home purchase is conditional upon association approval, request any relevant documents from the sellers as soon as possible. Review the rules and regulations and make sure you are okay with everything. Submit any application documents and fees as needed within the required timeframe. Make sure everything is filled out thoroughly to avoid any delays.
If the association wants to meet with you prior to approval, make an appointment as quickly as possible to get it out of the way. Most associations will give you a certificate of approval, which is required prior to move-in. Your escrow agent will ask for a copy of the approval letter, so make sure you have it ready. The letter is then recorded in county public records.
If you are using a home loan for your purchase, the lender will require you take out insurance on your property. Insurance costs depend on various factors, but the single greatest one is the value of the home. More expensive homes costs more to insure. We recommend shopping around with at least three insurance providers. You'll likely find a significant difference in cost, giving you an opportunity to save. Here are other ways to save on your insurance costs:
Not sure where to start? We would be happy to recommend knowledgeable and trusted local insurance agents. Contact us today.