Once you have found a home and had a successful negotiation of the offer there are still many steps that need to be completed before you can move in. Here is a primer on the steps that take place between contract and closing from the buyers perspective.
Set The Inspection- It is the buyers responsibility to set and pay for any and all inspections on the home. There are no required
inspections in Colorado. As a buyers agent or a transaction broker, I provide a list of inspectors that my previous buyers have liked, but a buyer may choose and use any qualified home inspector. It’s a good idea to ask about their services and experience as well as the insurance they carry. The buyer is ultimately responsible for any damage that an inspector may do while at the home. Most inspectors now use digital photography and provide pdf reports which are helpful during a negotiation. In our area radon is common and a radon test is an additional test that an inspector will do for a fee. Read this post to learn more about radon. Keep in mind that all inspections shall be completed prior to the inspection objection deadline as stated on the contract.
Formal Loan Application – Once their is a fully executed contract your lender can then set up a file and start moving your loan forward toward underwriting approval. At this time you will have the option to lock-in an interest rate. While you may have already provided some documentation to the lender. Once they are in the formal approval process (as opposed to pre-qualification or pre-approval) you will undoubtedly need to provide your lender documentation on income, debts, tax returns etc. Please provide these documents as quickly as possible so that any delays can be avoided down the line.
Review Paperwork – The seller will be providing (in most cases through the title company) paperwork regarding the title transfer, property taxes and the Homeowners Association. Your agent and lender will also be reviewing the title documentation for anything abnormal but it is in your best interest to review them carefully yourself or hire an attorney to review them so that you understand what you are getting when you purchase this particular property. The HOA documents will tell you the rules you are agreeing to abide by as well as the financial structure and health of the association. The turnaround time on looking at this information is fairly quick so don’t put it off.
Attend The Inspection – The inspection is the best chance for you to get to know your new home in an intimate way. Following the inspector around for a few hours will give you some good insight on the overall condition of the home as well as a thorough understanding of the conditions that you may ask to be repaired by the seller. As an agent I usually just attend the summary or get the report via email. I leave the inspection itself to the experts. Keep in mind that unless the home is brand new there will be some items that the inspector will point out. It is the inspectors job to be detailed in their inspection.
Inspection Objection with Agent – The next step in the process is to decide a course of action after the inspection. A buyer in Colorado has three choices: 1) move forward as-is and don’t ask for anything; 2) terminate the contract; 3) make a list of unsatisfactory conditions on an Inspection Notice form and present those to the seller. Work with your Realtor at this stage to strategize the best negotiation scenario. It’s best to remember that in most cases focussing on the major issues and/or safety issues will allow for the most productive negotiation with the seller. In my experience, sellers get annoyed if a buyer asks for too many trivial issues. Keep it simple, be specific and hold to the major points.
Other Items – During this entire time you will be making plans regarding moving and packing. Contact your Realtor as to when is a safe time to put non-refundable money down on any services. During this time you will also need to start contacting the local utility companies. This is especially important for those who work at home or depend upon an internet connection. One of the most important things to remember is “DON”T BUY ANYTHING!” Lenders check credit again just before closing and taking on additional debt can spoil the whole deal. Wait on the furniture, wait on the appliances, wait on the new car until after closing. At closing you will need to bring good funds to the closing. This means that you need to bring either a cashier’s check or wire funds in advance to the title company. You will get the exact amount to bring a day or two in advance from the title company via your Realtor or lender.
Closing – Finally it is the day of closing. One of the last stops before going to the title company to sign papers is back to the house for a final walk through. During this final walk through you get one last look at the house to make sure nothing has changed. You make sure that the agreed upon inspection items are complete and you make sure the items that are included are still there. The closing itself lasts about an hour and the buyer does the majority of the signing. In addition to your money make sure you bring a picture ID. The closing is a time to close up any loose ends. Connect with the seller and ask about the neighbors. It is not a time to renegotiate or hold grudges about past negotiations. After an hour or so you will get the keys and you are ready to move in.
Throughout the process it is most helpful to have an experienced Realtor there by your side to help you along and negotiate on your behalf. I have been helping buyers in the Boulder Valley real estate market for over twenty years. I’d love to put that experience to work for you.