Final Steps In The Homebuying Process

Learn what you can expect during the inspection and closing process when buying your new home.

You found the perfect home, applied for a mortgage, and are moving forward with making an offer. Congratulations! But do you know what to expect through the rest of the homebuying process?

While making an offer is a big milestone, there are still a few important steps before you get the keys to your new home. After your offer is accepted, you’ll enter into a period of inspections, appraisals, and negotiations. This is the time to ensure the property is in good condition and worth the price you’re paying.

Here’s what you can expect and what you need to know.

Home Inspection

Why Do I Need This?

Home inspections aren’t typically required by your lender to secure the loan, but they’re strongly recommended. A professional inspector will thoroughly assess the property by checking for issues, determining if the home is safe to live in, and a good value for your investment.

Who Do I Hire As The Inspector & Who Pays For It?

You can hire an independent inspector or ask your real estate agent for recommendations. When hiring one without a referral, look for someone who is affiliated with the American Society of Home Inspectors or the National Association of Home Inspectors.

You’ll be responsible for the cost of inspection and asking the seller for repairs. While you’ll spend a couple hundred dollars depending on the size of the home and add-ons, it’ll be worth it in the long run if the inspector finds anything that could be cause for concern.

When Do I Get The Inspection Done?

You’ll want to get the inspection done during your option period. This is an agreed upon period of time, after you and the seller have signed the contract, during which you can terminate the contract for any reason without risking your earnest money. It typically lasts between 7–10 days, but it can be any length of time you and the seller have agreed on.

What’s Included In The Inspection?

The inspector will check:

• The plumbing to ensure the toilets flush and that everything drains properly.
• The mechanical systems, such as testing the electrical wiring, heating, cooling, and ventilation.
• The structural pieces of the home, which is the most important part of the inspection. They’ll examine the foundation, support structures, walls, attic, and roof. These fixes are typically the most costly and complex, so it’s best to inspect them before finalizing the sale.

What To Do With The Inspection Results?

Review each item line by line and look for any major issues. Ask your agent to read over the results with you and see if they notice any red flags. If you find significant repairs are needed, you can request the seller complete them before closing or negotiate the price of the home based on the findings. If the seller declines and an agreement can’t be reached, you may be able to withdraw your offer.

Once you and the seller have agreed on everything, you’ll be ready for the closing phase.

Appraisal

Why Do I Need This?

An appraisal is essential because it provides an unbiased estimate of the home’s market value. Lenders almost always require an appraisal to confirm that the home’s value matches or exceeds the loan amount – protecting both the lender from potential losses and you from overpaying for the property.

Additionally, an appraisal can help in negotiations if the value comes in lower than expected, potentially allowing you to adjust your offer or request concessions from the seller.

Who Do I Hire As The Appraiser & Who Pays For It?

Your lender will usually handle hiring an appraiser for you by selecting an independent, licensed appraiser from a third-party company. This ensures the appraisal is impartial and meets legal requirements.

You’ll be responsible for covering the cost of the appraisal, which is usually included in your closing costs. The fee can range from a few hundred dollars to over a thousand, depending on the size and complexity of the property.

When Does The Appraisal Get Done?

The appraisal is typically done after your offer has been accepted and you’ve entered into a contract with the seller. Your lender will order the appraisal before or during the contingency period, and it must be completed before the loan can be finalized.

However, if possible, it’s a good idea to wait until after the home inspection is completed. This way, if the inspection reveals any major issues that could impact your decision to move forward with the purchase, you can avoid paying for the appraisal unnecessarily.

What Should I Do With The Appraisal Results?

After receiving the results, review them carefully to make certain the value matches or exceeds the price you’re paying. If the appraisal comes in higher than expected, great – you’re getting a good deal! If it’s lower, you may need to renegotiate the price with the seller, request repairs or concessions, or explore other options with your lender.

Your real estate agent and lender can help guide you through the next steps based on the appraisal outcome.

Closing On Your Home

This is the exciting part, because soon you’ll be a new homeowner! Closing on the house completes the sale and makes you the official owner. When the time comes, make sure you review your Closing Disclosure, which will outline the terms, final closing costs, and any outstanding charges or fees included in your loan. Your lender will send the disclosure to you at least three business days before closing.

Closing Costs

Closing costs include all fees required to execute the transaction – which includes attorney fees, title insurance, appraisals, points, and tax escrows. Typically these fees are paid up front. On average, closing costs total 3-5% of the loan amount.

What Will Happen During This Process?

The process will be relatively simple for you and involve these key players:

• The closing agent will calculate legal fees, transfer taxes, and coordinate the deed.
• The lender for the mortgage will provide documentation of the loan, including the note, mortgage, closing fees, and other paperwork.
• The title company will provide documentation of clear ownership.

Both you and the seller will sign a number of closing documents. Then, once the funds are delivered to the seller, you’re able to get your keys and move in.

Summary

Buying a home can be overwhelming, so it’s important to fully understand all the steps involved. Visit our website for helpful resources to simplify your homebuying journey and explore A+ mortgage options.