What Happens Between an Agreement to Buy and Closing?
After looking at several houses and choosing the right one, you’re most likely eager to move in as soon as possible. Before you can, there are several important things that must happen between the initial purchase contract and the closing.
You will need to secure a mortgage. Even if you were pre-approved, you’ll need to obtain a loan for a specific amount of money for the specific house you want. The lender will take another look at your income, assets, debts and credit score to see if any significant changes have occurred recently. The lender will also require an appraisal to make sure that the amount of money you want to borrow is in line with the value of the property.
A home inspection is critical before closing on a house. Many serious problems are not visible, but they can be expensive to repair. The house should be thoroughly inspected by a professional who can spot issues with the roof, foundation, windows, plumbing, electrical system and other areas that need to be addressed. A termite inspection is often required and is a good idea even if it’s optional since termites can destroy a home and the damage can go unseen for a long time.
As the buyer, you’ll be responsible for the costs of inspections. If problems are found, you can ask the seller to have repairs made. If the seller refuses, you’ll have the right to renegotiate the sale price or to walk away. If repairs are made, the seller should furnish proof and you should have the property re-inspected to make sure the repairs were completed in a satisfactory manner.
A real estate attorney will handle the closing paperwork and distribute funds. The contract and the lender may have specific requirements regarding the qualifications and duties of the closing attorney.
If you’re taking out a mortgage, you’ll most likely have to obtain homeowners insurance. This will need to be done in advance so you can present your policy information at the time of the closing.
Once a closing date has been agreed upon, the buyer and seller will need to transfer the utilities. The seller should contact the utility companies and request that services be canceled on that date, and you should ask the utility companies to commence your services on the same day.
Do Your Part to Close the Deal
A lot of things need to happen in the relatively short period of time between an agreement to buy a house and the closing. Talk to your real estate agent so you understand each step in the process and what you need to do to help things move smoothly.