What to expect when buying your first home
- Deliver EMD to escrow within 3 days
- You have to deposit your earnest money into escrow within 3 calendar days. They will hold it as collateral incase you fail to perform your duties as a buyer and close the deal.
- Lender orders appraisal
- It’s the lender who orders the appraisal not the agent, escrow or seller. It is important the lender orders the appraisal immediately almost receiving the executed contract because you have 17 days to remove all your contingencies and the appraisal contingency is one of those. So get it done quickly! Just because your loan officer orders the appraisal inspection doesn’t mean it’s going to happen in 24 hours. Typically appraisers go out anywhere from 3-7 days after they get the initial order from the lenders.
- Schedule the buyer home inspection
- All parties have to agree upon the date and time to do the formal home inspection. This is also a contingency that needs to be removed in 17 days or less. Time is of the essence.
- Listing agent delivers to Buyers agent all seller disclosures
- Listing agent should send the buyers agent all of the seller disclosures: Transfer of disclosure statement, seller property questionnaire, lead based paint, smoke detector and water heater etc. There are about 10-15 disclosures, depending on the property itself and the type of financing used by the Buyer, from the seller that you as buyer need to read through and approve. You have to have those turn back again within 17 days of an open escrow.
- Escrow instructions, Preliminary title report and natural hazard reports from escrow
– Escrow is the third party that makes sure the buyer and the seller teams are playing by the same set of rules. They take your purchase agreement and reiterate it on their own forms and they need you to approve it. Escrow also wants you to fill out the statement of information. They want to make sure that you are who you claim to be and are not somebody trying to steal somebody else’s identity. Escrow will also connect you with title and natural hazardous disclosure report.
- Approve all disclosures at home inspection
- Review all of your seller disclosures during the home to inspection to figuratively knock out multiple birds with one stone.
- Appraisal report valuation
- This can make or break your deal. Fact of the matter is, the appraisal report has broken lots of deals. There are three things that can happen: appraisal report can come in at value, appraisal report comes in higher than contract price, appraisal report is lower than the contract price. This can be a challenging situation if the appraisal comes in lower than expected for all parties.
- Removal of contingencies
- Remove all contingencies within 17 days. When you remove the contingencies you are telling the seller that you are moving forward and indeed buying the house. But if you don’t close the deal remember the liquidated damages clause! If you cancel the transaction after removing the contingencies the seller gets to keep the deposit money you put into escrow as a penalty for the buyer not closing the deal. If you want to cancel the deal, cancel before the contingencies are removed on 17th day of escrow not after.
- Lender finalized details of loan
- They will finalize the underwriting. They will verify all your debt to income ratio and your employment. Be aware that there will going to be working in the background even though you might not see them doing a lot. They are investigating you and the documents you provided during the loan process to make sure that you can actually pay back everything you are promising to pay.
- Buyer’s final walk thru
- 5 days prior to escrow you can take a look inside the property before taking possession. Make sure they didn’t throw a wild party. Make sure everything is intact. Be sure that all the repairs that you negotiated are complete. You probably want to take a measuring tape and you want to measure for your fridge, washer/dryer, bedroom furniture, television etc. Be proactive and get an idea of what you want to do to the property during your final walk thru.
- Buyer signs loan docs
- You are going to sign your loan docs with escrow or they will send a mobile notary to meet you and explain the promissory note that you will be signing. Once you sign your loan docs then escrow will forward them back to the lender, the lender will review them and if it’s okay the lender wires all the remaining funds of your loan to escrow. Escrow then takes the money, they will give the order to the title company to record the new deed in your name and you have confirmation of recording. Once it records through the county, you are officially a home owner!
- Buyer gets keys!
– I give you your keys at that time you can do whatever you want as long as negotiated that way.