Basic Steps to Buying a Home: From Contract to Closing
Moving from the contract to the closing.
This step involves as much work as everything up to this point and is another reason why having a real estate agent working for you as a purchasing agent can be very helpful.
(This information comes from my experience as a real estate agent in the Tampa Bay, Florida area, and the information presented here and the sequence of actions may vary in other parts of the state and in other states.)
After you have a contract on a property and before closing it, you have your last few chances to make sure you know everything you can about the property. Also during this period, everything necessary for a correct transfer of ownership of the property must be completed.
The first thing that is generally done once a contract is obtained is to send a copy of the contract to whoever is handling your financing (if you are not paying cash). They will need a copy of the contract as soon as possible for everything to work. They’ll probably need other documentation from you along the way, and it’s best to get them what they need as quickly as possible.
The next thing to do is schedule any inspections on the property. You will have a specific time frame to perform the inspections, as stated in the contract, and at a minimum you must have a home inspection and a termite inspection. These are vital to you as they will inform you of any existing or potential problems (at least the ones that can be found through these inspections). You will need this information to be able to decide whether or not to proceed with the purchase. A well-done contract is important again at this point, as it can protect you in the event that inspections find serious problems.
When you have completed your inspections and decided to proceed with your purchase, the next steps can be started.
If you are taking out a loan to make the purchase, your lender will want to request an appraisal to make sure that the price you are offering to pay is backed by the estimated value of the property in the current market.
If you are buying a home, you will also need to contact your insurance agent for a quote on home insurance and, if necessary, flood insurance.
If you are buying a condo or townhome, you will need to verify that the condo association pays for the building insurance. If so, you can choose to also get optional insurance for the interior and your belongings, similar to renters insurance. In most cases, construction insurance is covered by the condo association, but in the rare cases where it is not, you will have to arrange your own comprehensive insurance coverage.
There are about 25 more things that need to be done for the closing to be successful that will need to be followed up to ensure they are completed and done correctly. Application for association of condominiums, transfers of public services accounts, property study, etc. The specific actions that need to be taken will vary depending on the type of property you are buying, how you are paying for the purchase, and various other factors. However, I won’t bore you with all that here. I just want you to understand that there is a lot to do and follow up to get from the point where you have a contract to the point where the property is yours.
One of the last steps you will take is a final inspection of the property. You will do this to make sure the property is in the condition it is supposed to be in, including any repairs the seller has agreed to make. This is usually done the day before closing or sometimes even the morning of the closing day. It is a very good idea that you plan to be there for this, if possible.
When everything is complete, the title company or attorney’s office handling the closing will have all the necessary documentation. Then they should be able to give you a final figure for how much you will need to bring to closing. You will need to bring it in a cashier’s check and you will need to bring your driver’s license.
This brings us to the point you were waiting for: closure. The next and last article I wrote on the steps to buying a home or condo will outline what you need to pay close attention to during closing to make sure you are getting what you were promised.