Navigating the Final Steps

Once you’ve submitted your winning offer and the seller has accepted, there a few critical steps that need to be taken before you can close and move into your new home. 

Step 1: Home Inspections
The purpose of a home inspection is to identify the condition of the home and allow the buyer to make informed decisions. Hire an experienced professional home inspector to take a look at the entire home, from foundation to roof and HVAC to the electrical system, as hidden defaults could cost you significant amounts after closing. After the inspection, the inspector will provide you with detailed report of his/her findings. Most lenders also require a termite inspection, so see if your home inspector offers these services or hire a separate terminate inspector. Other inspections a buyer may wish to perform include a fuel oil tank test (for oil tanks buried in the ground), a radon test, a septic dye test (if applicable), a water potability test and water recovery test (for private wells), asbestos testing, and mold and lead paint tests. Once you receive the findings from any inspections, you will then negotiate with the seller to have these repairs made. 

Step 2: Formal Contract
Once inspections are completed and deemed satisfactory, the seller's attorney will draft a formal contract of sale and deliver to the buyer's attorney. Buyer should review and discuss the contract with their attorney and request any changes from the seller. Once seller agrees to any changes, signed contracts are then returned to the seller’s attorney with a 10% contract deposit (this deposit amount can be negotiable but is typically 10%). The contract deposit check is made payable to the seller’s attorney who holds it in an escrow account until the closing. If applying for a mortgage, an executed copy of the contract should be sent to buyer's lender. 

Step 3: Appraisal & Title Search When financing the home, the appraisal is required and ordered by a mortgage lender to prevent them from loaning more than the house is worth. If the appraised value is less than the contract amount, you may renegotiate with the seller, but the seller is not obligated to lower the price. Note that if the appraised value is less than the contract price, you can still purchase the home but the lender will only lend an amount based on the appraised value and you must come up with the difference. If you and the seller cannot come to an agreement on the sale price, either party can void the contract. An appraisal is not required for cash purchases.  
The title search is ordered by the buyer's attorney to check for any liens, violations, easements or other concerning items of record. The title company will issue a title report certifying clear title and a title insurance policy. The title company will also perform a property tax search, a violations search and a survey inspection.  

Step 4: Loan Approval
Even if you obtained a pre-approval for a loan, you will need to work with your lender to get final approval. This process will require a great deal of paperwork, so make sure to be prepared and respond quickly. Upon satisfactory appraisal and underwriting review, the lender will issue a mortgage commitment letter. 

Step 5: Homeowners Insurance
This covers the cost to repair, rebuild or replace your new home or items in your home if either is damaged or destroyed. Homeowners insurance is required by a lender and is usually included in your monthly mortgage payment.  

Step 6: Final Walkthrough Not to be confused with the home inspection, the final walkthrough is typically scheduled by your real estate agent within 24 hours of closing. The purpose of the walkthrough is to make sure that the seller has removed all of the belongings from the house and that there has been no additional damage requiring repair since the inspection. Test major appliances, light fixtures, toilets, windows, doors—and anything else you can think to test. Take your time and bring any unwelcome surprises to your real estate agent’s attention immediately.

Step 7: Closing
Your closing date is the day you become the legal owner of your new home. A closing typically involves getting together all parties including the seller, the seller’s attorney, the buyer, the buyer’s attorney, the lender’s attorney, the title company representative, and usually one or both real estate agents. At the closing table, there will be a lot of paperwork to sign, so get your pens ready. The typical closing process includes:

  • Signing a settlement statement that lists all costs related to the home sale
  • Signing the mortgage note, stating your promise to repay the loan
  • Signing the mortgage or deed of trust, which secures the mortgage note
  • Paying any remaining closing costs

The seller will also sign documents transferring property ownership and the title company will register the new deed in your name, officially consummating the sale!

Brought to you by
Brittany & Christa

We're not your typical real estate agents. As former city dwellers, we appreciate the qualities that make city lifestyle so unique, from the convenience of walking to your favorite restaurant or corner store to the vast and diverse cultural and entertainment activities. But we’ve also experienced the challenges and frustrations that are motivating you to seek change. During our transition from the city to the suburbs, we had the same thoughts, concerns and questions, prompting us to create a better way to navigate the suburban home buying journey for others.