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Almost There: From Contract to Close

Congratulations on signing a contract to purchase your new home! It’s thrilling to know that soon, you will be stepping foot in a brand new property, but there are a few more things you as the seller, as well as your lender, real estate agent, and attorney must do to complete the transaction and receive the keys. We’ll go through them step-by-step in detail so that you don’t run into any surprises:

Choose your Closing Attorney

Your realtor can recommend a closing attorney for you, one that specializes in real estate. Once they are selected, they will conduct research on the house and make sure there are no issues with the title, such as taxes owed. They will also get someone from their paralegal department to get in touch with you for your contact information and your social insurance number to confirm your identity. In the first couple days, your realtor will deposit the earnest money check.

Choose Your Lender

Within the first week of signing, you need to decide who your lender is going to be. If you’re not sure who to go with, consult Mortgage West – The Mortgage Centre for tips on how to choose between your bank and a mortgage broker. Be certain to choose a lender that is easy to reach and has a good record of closing deals on time. Your lender will require many documents from you including your tax returns, pay stubs, or the last two months of your checking account statements. Respond quickly to make sure your application is accepted before you sit down at the closing table.

Set Up a Home Appraisal

Your lender will then set up an appraisal. They make sure that the house is worth the asking price, and if it doesn’t appraise, the seller has the choice to lower the price. If they refuse, the buyer can void the contract and get their earnest money back.

Set Up a Home Inspection

Your relator will set up a home inspection for you, which usually takes from two to three hours depending on the size of the home. The usual unfolding of this process is that the inspector examines different areas of the home and raises any concerns he may encouter. An inspector will carefully check the major appliances, plumbing, electrical systems, the roof, and the foundation. At the end of the inspection, they will give you a synopsis of what they’ve found and later email you and your realtor a copy of the full report, which will include photos and full descriptions of any issues. Afterwards, you will sit down with your realtor and discuss what you want your seller to repair. You are allowed to negotiate for major issues, but nothing that is cosmetic. Your realtor will write out a list, send it to the seller, and request that those things be repaired. Once again, negotiations will go back and forth until you come to an agreement. When that is over, the seller must sign the repair addendum contract, which binds them to fixing the issues agreed upon. If you don’t agree, you are allowed to drop out of the contract and get your earnest money back.

Set Up a Termite Inspection

The seller will arrange and pay for a termite inspection and must be completed within 30 days of closing. If they discover any problems, they are responsible for treating it. Buyers usually don’t attend a termite inspection because it is a quick inside, outside, and crawl space examination. It is a clear “yes” or “no” answer from the inspector.

Shop for Homeowners Insurance

Your lender will likely require you to get homeowners insurance, which covers you against perils ranging from fire, windstorms, hail, lightning, theft, to vandalism. A good place to start is to see if your homeowner’s insurance can be bundle with your car insurance. Get some advice from your broker and real estate agent—they will surely give you some good tips. Shop around and get a good rate.

Schedule Electric and Water Hookup

The seller will schedule to turn off the electricity and water on the closing date, and in turn, you will schedule to turn it on. If you call first, the company will explain that it hasn’t been scheduled to be turned off; so contact your realtor and they will make sure that the seller calls to turn it off first. The technicians will come in, read the meter, and make the seller pay for everything up until that point.

Arrange Closing Cost Payment

Your lender will give you a good idea of what you will owe at closing and will constantly update that number as you near the end. You need to arrange for a cashier check or a wire for your required closing cost funds. Schedule some time to run by the bank or to wire because the exact amount owed will be given to you last minute.

Conduct a Final Walkthrough

Before heading to the attorney’s office to close the deal, make sure to conduct a quick 15-minute walkthrough of the house. Make sure that nothing has happened since you last saw the house so that you’re covered if anything has happened. It is rare, but houses have been known to spring last-second leaks, so keep an eye out for anything that might have changed so that the seller will be held responsible for payment.

Closing Table

When you sit down at the closing table with your seller, real estate agent, and attorney, ensure that you have everything you need beforehand. Bring your driver’s license and required funds for closing costs. You will then have many documents to sign. Both seller and buyer will sign a government standard contract which shows the price agreed, closing costs, and credits. The biggest credit will likely be from your lender, which will be paying upfront the remainder of what is owed to the seller for the house. Your earnest money will be refunded to you here. A prorated amount of the annual property tax will be credited to you, as well.

Get the Keys!

Congratulations! Once you have everything signed, you can grab the keys and head to your new home and start moving in your possessions. The process is a long one, but it is definitely worth the trouble because you have officially attained a personal and financial goal.