What to Do After Signing a Purchase Contract
Signing a Purchase Contract –
You’ve discovered your dream home, submitted an offer, and it’s been approved. Now what? Unless you have previously purchased a home, you likely have really no idea what occurs at an estate closing. From the time you begin your search and select a real estate agent until you obtain the keys to your new home, there is a substantial amount of paperwork involved. In this entry, we discuss what occurs between the moment your proposal is accepted and the time you formally become a homeowner.
Get a Loan Pre-Approval
This is not required to finalize a sale, but there are numerous benefits to doing so: it can help you close the deal more speedily, serve as a negotiating tool when discussing the selling price, and if you lock in a rate with the bank, you’ll be shielded if interest rates rise before closing.
Establishing an Escrow Account
An escrow account prevents both buyers and sellers from being defrauded. How? Since there are numerous stages necessary in concluding a property sale after the contract has been signed, an independent third party keeps the escrow account. An escrow account contains the transaction’s funds and papers until all related matters are resolved.
Employ a Seasoned Firm to Conduct a Title Search
After the purchase contract has been finalized, you must employ an expert title company to do the title search. As indicated in a prior piece, this is a vital phase in the purchase of a property and must be completed prior to the closing. The purpose of a title search is to identify any potential liens or other encumbrances that could endanger the purchaser’s ownership in the hereafter, such as unpaid taxes, judgments, secret deeds, unreleased mortgages, unknown heirs, forgery, and others. A qualified title company will be able to swiftly detect any potential dangers that could affect the future property owner’s claim.
Get Title Insurance
Once the title inquiry is done, the very same firm will issue a title insurance policy. This is done to ensure that, even if no issues were discovered during the title search, the owner is nonetheless protected in the event of a property ownership dispute.
Additionally, you may wish to do a pest check to ensure that your prospective new residence is not plagued with wood-destroying pests such as termites. Even though this is solvable, you must ensure that the associated costs are fair or that the vendor is willing to pay for them. Because a pest infestation can rapidly worsen, many lenders require that it be eliminated prior to closing the deal.
Conduct Home and Pest Inspections
This goes hand-in-hand with having a house assessment contingency in your offer to purchase. Even while sellers are required by law to execute a disclosure agreement in which they disclose any potential issues with their property, it is always suggested that purchasers have a professional, independent home inspection. Thus, if you discover a significant issue with the property you intend to acquire, you can either pull out of the deal, have the seller rectify the issue, or ask them to deduct the cost of repairs from the sales price.
Refinance The Offer
This relates to the previous point. If the inspections find that the facility has physical, architectural, or biological flaws, you may rework the offer – even if it has already been approved – to account for any necessary repairs. If the purchase agreement indicates that you have agreed to acquire the property “as is,” you may still request repairs, but the seller is under no duty to comply.
Invest in The Escrow Account
When you executed the sales contract, you provided the seller with a deposit of earnest money to demonstrate your serious intent to purchase the property. Once everything is prepared and agreed upon, further monies must be deposited into the escrow account. The sum required corresponds to the balance of the deposit (total down payment minus earnest money deposit) and the closing charges.
In rare instances, the vendor may agree to cover the buyer’s closing costs. If this is the case, the buyer would be required to pay only the remainder of the down payment.
Perform a last Walk-Through of The Property
When you sign a sales contract, it should stipulate that you have the right to conduct a final inspection of the home 24 hours before to the scheduled closing. Thus, you can check that 1) the property has been vacated, 2) it is in the shape you agreed to purchase it in, and 3) all agreed-upon repairs have been completed. Even though you are anxious to begin the relocation, you should never skip the last inspection. You don’t want to discover any unpleasant shocks when you move in that you can’t fix.
Sign the Documents
After all is said and done, you must sign the documents to transfer property and funds to the respective parties. Take your time to read every paper you are asked to sign before signing it.
Get Your Keys
After all documents have been completed and monies have been cleared, you will receive the property’s keys. Now is the moment to move in and begin to appreciate your new house. This article is intended to be an instructive guide. If you intend to purchase real estate, we suggest that you speak with a knowledgeable real estate agent and/or escrow officer as well. Contact us.