4 Key Steps to Know Before You Can Close on a Home
Before a buyer can close on a property, there are a number of things that first need to happen. It can be a stressful time for both parties, especially if there's a hard deadline (e.g., the start date of a new job). Here are a few steps to keep in mind that will hopefully make the process a little smoother.
Review the Purchase Agreement
The purchase agreement needs to include the price, delivery schedule, and title information of the property. It also includes a number of fine print clauses that spell out what the homebuyer can expect during closing. As tricky as it can be to read and interpret the contract, it also gives owners a chance to understand more about the parties involved and the ways in which a deal could fall through. For instance, a lender can technically change the terms of the loan if the appraiser finds that the home is worth less than the buyer's winning bid for the property.
Compare Insurance Plans
Unless the buyer is paying for a home in cash, they'll need some type of home insurance policy to fulfill their lender agreement. Because insurance carriers will generally conduct a home inspection in order to determine the premium, homeowners will need to start looking for a carrier early on. The more the buyer can negotiate for repairs before moving in, the better their home insurance rates are going to be. With the average cost of homeowners' insurance being what they are, this is important. For instance, if the home's pipes are old, upgrading or sealing them can help an insurance carrier be assured that there's less chance of water damage after a covered event.
The Negotiation Phase
Some buyers may think that just because the home is in escrow, they've lost their right to negotiate, but this isn't true. Here are a few common scenarios where negotiation is not only acceptable, but highly encouraged:
- The inspection unearths a flaw that was not originally disclosed by the sellers.
- The neighbor of the property begins contesting the ownership of part of the yard.
- Buyers discover an undisclosed lien on the property after title inspection.
- It's taking longer for the buyer to sell their home than expected.
This phase is a balancing act for buyers. They should not be timid during this time, especially if the seller was not forthcoming about certain details of the property. At the same time, buyers who are too demanding may just have a seller call off the deal. Some minor flaws or disputes can be overlooked for the sake of moving the sale along.
From the plumbing to the cable, readying the home starts with being proactive. Just because the toilets flushed when the buyer first walked through the home doesn't mean the pipe system hasn't been compromised since then from lack of use. Call the internet installers, test the fuses, and double-check that there's enough room to move the furniture. Buyers are allowed to request repairs up until the day of closing, so it pays to be taking precautions during this time.
Part of getting ready to close on a home is having a good real estate agent to consult. It's not always easy for buyers to negotiate certain terms, especially if they're not considering the consequences if they choose to let certain things go. A real estate agent can make suggestions that can save buyers the hassle while still letting the buyer have the final say.