This 3-part series will explore the most commonly asked questions posed by home buyers.
I’ve found the house and I want to make an offer. What do I do?
You and your agent will discuss your desired terms (offer price, down payment, settlement date, etc). Your agent will then draw up the contract and send it to you for your review and signature. Your agent will need your loan pre-approval letter and your earnest money deposit check to submit along with the offer. The offer is sent to the listing agent and you wait for a reply, usually within 24 hours. Negotiations may take place, and once both sides have agreed to all terms, you are officially under contract, or “ratified.”
Can I submit offers on multiple houses at the same time?
No. If each seller were to accept each offer simultaneously, you would be contractually bound to purchase each home!
What is negotiable?
The short answer is “everything, within reason.” You are always allowed ask the seller to do something, and they will either agree, disagree or compromise. The most commonly negotiated items are: sales price, settlement date, seller credits, contingency timeframes, conveyed items and home inspection items.
What are contingencies?
Contingencies protect the buyer in the contract. The most common contingencies are home inspection, appraisal and financing. The home inspection contingency allows you to inspect the home and ask for repairs. The appraisal contingency gives you options should the home appraise for less than your loan amount. The financing contingency protects you in case you cannot get final loan approval. Each contingency ultimately allows you to walk away from the contract with no penalty, within a certain period of time.
Should I get a home warranty?
If the appliances in the home are newer it is probably not necessary.
How is a home warranty different than homeowners insurance?
A home warranty covers things inside the home (i.e., refrigerator, hot water heater) and homeowners insurance covers things outside the home (i.e., if a tree fell on the roof).
What happens once I go under contract?
Within the first week of going under contract, you will need to contact your lender to discuss the next steps of the loan and attend the home inspection. Please see the enclosed handout for more details.
What happens at the home inspection?
Your agent will schedule a time with the inspector to meet at the house. The inspector will walk around both the outside and inside of the home. They will test all appliances, faucets, light fixtures – anything readily accessible. They will not look behind walls, under flooring or point out cosmetic items. You can follow them through the home and ask questions as they go along. They will then prepare a report with their findings which you will use to decide if you will ask the seller to repair any items. The inspection takes anywhere from 1-3 hours.
What happens at the walk through?
Your agent will meet you at the home a day before or the day of closing. You will go through the home and make sure any home inspection items were repaired. You will also check all faucets, lights, appliances, and make sure the home is in substantially the same condition as it was the day of the home inspection.
Does everyone have to be at closing or can I sign for my spouse/significant other?
Unless you have power of attorney and notify the title company ahead of time, all parties to the contract must be at closing to sign.
What happens at closing?
Your agent will meet you at the title company, where a settlement attorney will conduct the closing. Typically, the seller and their agent are present as well. The settlement attorney will review the HUD-1 statement and will then have you sign a number of documents, briefly summarizing each one before you sign. The entire process takes about an hour.
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