Buying a home is one of the largest investments that you will make. It’s important to understand the home buying process. Once the purchase contract has been signed by both Buyer and Seller, the following steps are taken to get to closing.
Escrow Money Deposit
Submit your EMD (escrow money deposit) to your Agent or directly to the Title Company. Your Agent will get a receipt from the title company that the EMD was delivered.
Contact your Lender to start the Loan Application and process. (unless you are purchasing with cash) Contract may state: Buyer will make application within 5 days after effective date. Please note, your failure to comply with contract terms is a default, and the Seller must be notified
Schedule your home inspection and wood-destroying organism (WDO) inspection. Your Agent will contact the Listing Agent to let them know the time and date that it has been scheduled. The Listing Agent will then notify the Seller. You will get a report for each inspection. Your Agent should also get a copy of the reports. Your Lender and Title Agent may need copies of the WDO inspection report. If a problem arises, your Agent should do everything within their power to make sure all parties are aware of the situation and to see if the problem(s) can be resolved.
Your Lender will order an appraisal to determine value of the property. The appraisal may be ordered and paid for at the time of the loan application.
The contract will require a loan commitment within a certain number of days from the contract’s effective date. Make sure you do not delay in getting your Lender any needed documents or information requested. The Lender’s failure to provide the commitment within the required time may allow you or the seller to void the contract.
Title Insurance is Ordered
The Title company will get a copy of the contract and the financing information so that the title search can begin.
Required Repairs Ordered
Many contracts require repairs other than those covered by termite damage. The appraisal could show the need for a new roof, or you may have made the contract contingent on the Seller’s replacing a swimming pool vinyl liner, for example. As soon as loan approval is obtained, the work should be ordered. *Note: this may not apply for AS-IS contracts or Short Sales where the Seller does not have the funds to make any needed repairs
Required Repairs Completed and Approved
When the work has been completed, the appropriate party should inspect the work to be sure that it has been done properly.
The Lender or the Title-closing Agent often orders the survey after loan approval
You should purchase the hazard insurance policy as soon as possible in the transaction, especially during Florida’s hurricane season. If a hurricane or tropical storm develops, insurance companies stop writing insurance until the danger has passed. If there are several hurricanes at sea, the delay could be for a week or more, and could cause significant delay of a closing. You will pay for the first year’s policy in advance, plus two months. Your Lender and the Title closing Agent will need the information regarding your insurance policy.
Closing Date Set
You and the Seller will be contacted to schedule a closing date. Soon after loan approval, the Title-closing Agent should be able to set a closing date and time. Note: The Seller and Buyer may close at different times and may not be in the room together.
Pre-closing Inspection (Walk-thru)
You and your Agent will make a pre-closing walk-through inspection. The inspection is to ensure that
• the property is ready for occupancy;
• personal property the seller is required to leave remains on the property;
• all required repairs and maintenance have been completed; and
• the property has been maintained in the condition as it existed at the time of contract, ordinary wear and tear excepted
When the inspection has been completed to your satisfaction, your Agent will ask you to sign a pre-closing clearance form.
Closing Papers Reviewed
Usually this takes place a day or two before the closing date. The Title closing Agent will generate the HUD Closing Statement. You and your Agent will review the statement to make sure all figures are correct.
Amount needed for Closing
You will be given the exact dollar amount needed to bring to closing. You will need to either get a certified check or do a wire transfer (some Title companies require a wire transfer.)
You and your Agent will meet at the Title company. The Title closing Agent will conduct the closing and have documents ready to be reviewed and signed. Your certified check will be given to the Title closing Agent. CONGRATULATIONS! You are homeowners!
(note: This is the typical road to closing… Of course, every transaction is different and the above steps may vary)