Making a purchase offer that the seller accepts is the easy part. The next phase is the escrow, inspection, and appraisal phase, and it can get pretty complicated depending on the circumstances. Being prepared is key to overcoming any obstacles that might hinder your home purchase.

Initial Agreement & Deposit

The initial purchase agreement is the first major legal step toward transferring home ownership. Keep these things in mind during this part of the purchase process: 

• Document everything. Keep digital records and hard copies whenever possible. Any verbal agreements and back and forth negotiations should be recorded as written agreements signed by both parties. We will be there to assist you in drafting any necessary paperwork, and ensure you have copies of all relevant documents. 
• Once the seller formally accepts your offer, you will be provided a closing timeline marking each step of the process. It is important you work with the seller to stay on task and stick to the timeline. Meeting the timeline requirements ensures a smooth transaction and avoids friction. We will keep you constantly updated during tis period. You will never have to guess as to the next step. 

Title & Closing Agent

A title company and/or attorney will serve as the closing agent. Their job is to make sure all legal requirements of the transaction are met. The closing agent holds title and deposit and escrow. They will conduct thorough research to verify that the property title is free and clear by date of closing. Any new encumbrances are added as necessary. Properties are often subject to restrictions such as building and parking. There may also be easements and encroachments that affect the property and limit your use and rights. It's important that all of this be clear prior to final closing.

Holding Title: Know Your Options

There are different ways to hold title to a property. And each has its own financial, legal, estate, and tax implications. This is especially true upon title transfer. Consult with an attorney or title specialist to determine what works best for your specific needs.

Home Inspections

After the seller accepts your offer, you will need to hire a licensed property inspector to inspect the home within an agreed upon timeframe indicated in the purchase contract. You may want to hire more than one inspector and compare inspection reports. You may also want to hire inspectors that specialize in certain areas like HVAC, roof, foundation, etc. Contact us today for a list of our recommended and highly trusted home inspectors.

Once the inspection report is complete, there are three possible outcomes: 

• Buyer is satisfied with results of the inspection, bringing both parties one step closer to finalizing the transaction.
• Inspection uncovers unforeseen defects, buyer requests a renegotiation of the purchase agreement
• Inspection uncovers major defects that are unacceptable to buyer, transaction is cancelled

Appraisal & Lending Approval

It is important to remain in close contact with your lender, who will notify you whenever additional documents are needed to move along the purchase process and finalize your loan. Make sure you submit all documents as requested and in a timely fashion. Otherwise you can unnecessarily hinder the purchase process.

If the purchase agreement is contingent on financing approval, your lender will send an appraiser to asses the value of the property. A professional appraisal assures the lender that your property is worth more than the loan in case of default. The appraiser will consider square footage, location, building costs, age, recent sales, and more in determining value. 

When you are within a couple weeks of closing, talk with your lender and make sure all your documents are in order. It will avoid any potential hiccups. 

Home Owner Association Approval

If your home purchase is conditional upon association approval, request any relevant documents from the sellers as soon as possible. Review the rules and regulations and make sure you are okay with everything. Submit any application documents and fees as needed within the required timeframe. Make sure everything is filled out thoroughly to avoid any delays. 

If the association wants to meet with you prior to approval, make an appointment as quickly as possible to get it out of the way. Most associations will give you a certificate of approval, which is required prior to move-in. Your escrow agent will ask for a copy of the approval letter, so make sure you have it ready. The letter is then recorded in county public records.

Homeowners Insurance

If you are using a home loan for your purchase, the lender will require you take out insurance on your property. Insurance costs depend on various factors, but the single greatest one is the value of the home. More expensive homes costs more to insure. We recommend shopping around with at least three insurance providers. You'll likely find a significant difference in cost, giving you an opportunity to save. Here are other ways to save on your insurance costs: 

• Consider a higher than average deductible. Increasing your deductible by just a few hundred dollars can significantly reduce your premium. 
• Ask for discounts. Don't be shy about asking your insurance agent for discounts. The worst that can happen is they say no. Safety features like a good alarm system, fire-retardant materials, and durable construction quality can help lower your premium. If you are over 55 you may also be entitle to a discount, or if you are a long-term loyal customer. 

Not sure where to start? We would be happy to recommend knowledgeable and trusted local insurance agents. Contact us today.