Below is list of some of the deadlines that you can expect during the process:
After all parties have agreed to the terms of the contract and the executed date is filled in, a copy of the contract and the earnest money must be delivered to the title company. The title company will carry out all the instructions of your contract and provide the title insurance. The address of the title company chosen will be on your contract, so you can communicate freely with them. Generally, your real estate agent will contact the title company for all key factors and they will review your final figures before closing. A good real estate agent can review the Loan Estimate and Closing Disclosure to make sure you have not been incorrectly charged.
The appraisal is required by the lender to insure the property's market value and to certify the property meets required standards. Two important areas to focus on are the appraiser's value and the lender-required repairs. Although the appraisal belongs to the lender, you typically pay the cost as required by the lender. Federal law entitles you to a copy of the appraisal.
You have the right to do inspections anytime prior to closing. Most buyers choose to get the property inspected during the option period. If there is a major item that must be addressed after the general inspection is done, you can:
- Terminate the contract within the option period.
- Propose a lower sales price.
- Request that the seller complete the named repairs.
- Split the cost of repairs with the seller.
A wood-destroying insect report may be required before closing. This report is filled out by a specially licensed inspector and is often done at the time of the general inspection to keep inspection costs down. This inspection report states if there is a current infestation, there has been an infestation, there are conducive conditions (areas that might attract), or the property has been treated. Please keep in mind that infestation in general is easily treatable.
After the Underwriter has reviewed and approved your file, they send it to the Closing team. Loan approval is the full and final approval to get your property closed. Sometimes the loan approval is conditional and you must provide documented proof that required property or financial conditions have been met.
All repairs are generally done after the loan approval. Sometimes a seller might agree to do them early, but don't expect this until you have been completely approved for the loan. Repairs include lender-required repairs that must be done prior to the funding of the loan. Lender required repairs take precedence over all repairs, because the loan will not be approved unless they have been completed. While required repairs are addressed in the contract, repairs that are needed after you are a homeowner should be a concern to you. Savvy real estate agents should always recommend a residential contract to protect you in the coming year.
After repairs are done, it is always recommended to re-inspect the property. Oftentimes, the inspector you originally hired will look over the work done for a nominal charge. Re-inspection should not be skipped, so allow yourself enough time before closing for the re-inspection of items where repairs had been requested.
Before closing, you must obtain homeowners insurance. You will need to provide your insurance agent with the address, square footage, and age of the property. Some insurance companies ask for additional information that can be provided by your real estate agent. Your insurance will not go into effect until your loan has closed and funded. Your insurance premium will be included in your closing costs, so make sure you don't pay for it up front.
The amount of your insurance premium is determined by the type of coverage needed:
- Replacement versus actual cash value of items in your house
- Replacement versus actual cash value of dwelling coverage
- Deductible amount
- Security system, deadbolts, and smoke alarms
- Discounts may be given if you use the same insurer for your auto insurance
Please remember that flood and earthquake damage are not covered by a standard homeowner policy. You may need to buy a separate policy to cover those types of risks, depending on the likelihood of occurrence in your area.
A survey will provide a graphic account of the property you are purchasing. It will show the structure fence line, boundary lines, encroachments, and easements of the property. The buyer customarily pays for the survey, but the cost can be negotiated if the property includes acreage.