The home buying process comes with more than just having found the right home. Some would say that the real work begins once your offer is accepted. If you recently went through having your many offers rejected or having fear to not find the right home, then you have learned that home shopping can be tiresome.
Since your offer has been accepted and you are now purchasing a home, I want to share some insight of what is to come.
Here are 5 Things You now need to Prepare for.
- Due Diligence Period & Earnest Money
If you are a First-Time Home Buyer, you may not be familiar with the term Due Diligence Period. Or perhaps you are a seasoned home buyer, that just needs a little reminder.
In Real Estate, Due Diligence is the period immediately after the acceptance of a Purchase and Sale contract to buy a home. This time period is very crucial in determining if the home is the right fit for you (the buyer). For the seller, this time period means inspections and possible further purchase negotiations.
During the Due Diligence period, you will be ordering a home inspection to determine if your home investment is protected. This report is sort of a full generic “status” of the condition of the home. As a home buyer, you need to prepare for the report findings.
If the report shows safety concerns, be prepared to ask the seller for these items to be resolved prior to closing. Usually, there are many maintenance issues that may come up; these are fully negotiable. As part of the negotiating process, you may try to negotiate a lower selling price or closing concessions due to the report findings.
Due to our recent housing law changes, the Appraisal is usually ordered by the lender financing the home purchase. The Appraiser performing the inspection will provide a written report usually within a couple of days of the home visit.
The Appraisal results can unfortunately break a home sale. For example: if the home purchase price is $200,000, and the appraisal comes back at $190,000; this means the lender will only finance $190,000.
At this point, you (the buyer) will either need to pay the difference ($10,000) at closing or should seek to negotiate the selling price to $190,000 with the seller.
The seller may either accept the new negotiated selling price of $190,000, or may advise you that he/she is firm on the selling price of $200,000.
What happens next? Unfortunately, someone will need to budge. Again, if neither you (the buyer) or the seller agree on a new selling price, then this is often the death of a home sale.
- Home Owner’s & Flood Insurance
During the Due Diligence period, you should begin to shop around for a home owner’s insurance policy. Depending on the location of the home, you may also be required to purchase a flood insurance policy. Make sure to check with your local Real Estate Processional or with FEMA Flood Map Service Center; to see if the address is considered to be in a Flood Zone or Flood risk.
- Walk Through & Closing
A Final Walk Through should be done and is highly recommended before closing. Some choose to do this on the same day of closing, while others may do it a day or a couple of days before. This is really up to you and your REALTOR®, depending on your current timelines.
Closing Day has finally arrived. You have probably been informed on Wiring Instructions, closing time, and items that need to be brought to closing. Do not forget your legal identifications. Common acceptable identifications are your driver’s license and passport. Make sure to ask what is accepted prior to closing day.
You have made it! Congratulations and Welcome to Home Ownership!
I hope this post shed some insight and prepared you, the Home Buyer, for what is to come next after you home offer is accepted.
Do you have questions or comments? Please let me know!