Contact MargaretCrofton Homebuyer Asks “What’s Next?”
January 20th, 2012 Categories: Questions and Answers
Crofton MD Real Estate Q&A
Q. 
Now that my contract on a home has been accepted, what’s next?
A. That’s a question shared by many first-time home buyers, and even some people who have previously purchased a home. Every transaction is different, so the list may vary from one house to the next, but this will give you a general idea what to expect, including information you will receive and things you must do:
CONTRACT TO CLOSING CHECKLIST FOR HOME BUYERS
- Good Faith Estimate – The lender’s estimate of your closing costs. You may have received this from your lender already. If not, you will receive it shortly. The Good Faith Estimate (GFE) will outline your closing expenses from the lender, title company, and other third parties such as any condo or HOA association. When you receive this, please send a copy to me so I can review it and suggest to the lender any changes unique to your contract.
- Appraisal – The appraiser’s opinion of the property value. Hopefully the appraisal will come in at the sale price agreed by you and the seller. If the appraisal is low, we will have a problem: Either you will have to come up with more cash or the seller will have to drop the price. Please pray to the appraisal gods, cross your fingers and toes, and carry your favorite good luck charm in your pocket until the appraisal comes in. Appraisals can be very unpredictable in this market.
- Loan commitment – Final loan approval, based upon receipt and review of all required verifications, including a satisfactory appraisal.
- Postal Service – After your loan commitment is in hand, you can start notifying your credit card companies and others of your new address and the effective date of your move.
- Moving Arrangements – After your loan commitment is in hand, you can finalize your moving plans. (Don’t assume you can’t afford professional help because local moves are probably less expensive than you expect.)
- Home owner’s insurance – Required by the lender to protect against expenses incurred due to fire and other hazards. Check with your family and friends to find out which insurance company and agent they use and why… but make your own decision based on comparison shopping for cost, benefits AND services. A policy must be paid a year in advance and a copy provided to your lender before they will release your loan proceeds to the title company. At closing, the lender will collect an extra two months of insurance premium, and 1/12 of the annual premium will be part of every monthly loan payment so the lender will have enough to pay your insurance next January.
- Utilities – Contact the utility companies prior to closing. The Settlement Notice I send you will include a list of them and their phone numbers.
- Pre-Settlement Inspection – We will schedule this three-five days prior to the scheduled settlement date, and confirm the day and time a week earlier. The purpose of this inspection is to make sure the property is in the condition you expect, that all the appliances are in working order, and the home inspection repairs have been completed satisfactorily.
- Closing funds – A certified or bank check for the amount due from buyers at settlement. The good faith estimate from your lender will have this amount, but you should contact the settlement company to find out if anything has changed before you go to the bank for your closing funds. (Their contact information will be on the Settlement Notice I send you.)
- Settlement – Settlement is when all the final paperwork is completed and all the money changes hands, other than a few items paid outside closing (POC) such as your insurance and lender charges, if any. I will provide you with a Settlement Notice that includes the date, time, and location of closing, contact information for the settlement company, and a checklist to help you prepare for settlement.
- Happy Ending – When you walk out of settlement, you will hold the keys to your new home in your hands. Congratulations!
If you have any questions about the home-buying process, feel free to contact me. No cost or obligation, of course.
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