You’re Under Contract on a House… Now What??
After months of planning and preparation, countless hours spent searching online, and viewing several listings with your realtor, you’ve finally gone under contract on a house. Most people who buy home feel like they are at the end of their home buying journey, when really the most intensive part is just beginning. The following is what to expect once you’ve gone under contract on a house.
Keep realistic expectations.
While it’s exciting to be under contract on a house, nothing is certain until closing documents have been signed and you are walking away with the keys in hand. Keep a level head throughout the process and understand that even the best laid plans can fall through when you buy home.
Start working closely with your mortgage professional.
From the time you go under contract on a house until you get to closing you should be in close contact with your mortgage professional. Most likely you’ve been pre-approved before beginning the home buying search. Now you’ll need to provide documentation, sign disclosures, and check in on the loan process.
Earnest Money will be Deposited
The earnest money check that you provided after negotiating the sales contract will be deposited into an escrow account. Depending on the market you are purchasing in, an earnest money check can be between $1,000 or up to 3% of the purchase price.
Inspections and Appraisals
One of the big milestones after going under contract on a house is the property inspection. Homebuyers should be present at the inspection with a list of questions to ask the inspector. The property inspection will protect you from any major maintenance or repairs that need to be done to the property. You should ask questions regarding the past maintenance of the home and find out what you can expect for short term and long term maintenance.
The appraisal is another big part of the escrow process. Your mortgage loan approval is contingent on the appraisal coming back at a high enough value. The appraisal is also important to you as the potential homeowner. When you buy home, you want to be sure that you are not paying more for the home than what it is worth.
Documents and Disclosures
You will be reviewing, signing and turning in plenty of documents and disclosures in the time between going under contract on a house and closing. Your lender will require that you sign various disclosures that comply with federal regulations. They will also be collecting documentation to verify income, prior rental history, and any credit circumstances.
Decide on Homeowner’s Insurance
Once you’ve gone under contract to buy home you’ll want to start searching for homeowner’s insurance. Not all insurance policies are the same and neither are their rates. Your lender will require you to carry a minimum insurance policy, but you may decide that you want to carry more than that. Compare rates and service amongst the different insurance providers to make the most educated choice possible.
In the week before closing you will want to call various utility companies and have the utilities transferred into your name. You will set up the transfer date for the day of closing to protect yourself. This is typically a smooth process since utility companies handle these requests frequently.
Pack Up Your House
It goes without saying that you’ll need to start packing up your home in anticipation of your move. You’ll need to have arrangements for a moving company or a moving truck to do it yourself. This is also something that you’ll want to shop around for. Moving is often a category that you get what you pay for, so it may be worth it to pay a little extra and get truly quality work.
If everything else has gone according to plan it will be time for you to close on your new home. You should have received a HUD-1 Closing document from your lender that specified exactly how much you need to bring to the closing. Have these funds available in the form of a Cashier’s Check. Also, bring a form of government issued picture ID to the closing with you.
The time between going under contract on a house and closing can be very stressful. It is certainly a huge added responsibility on top of your other daily duties. Take time to decompress and stay proactive throughout the positive to make it a stress free as possible.