What happens after you sign a home purchase contract?
You’ve just signed a contract to buy your dream home – fantastic! But what’s next? Even after you’ve signed on the dotted line, there are a number of steps to complete before the deal is closed and the home is yours. To be prepared for this important stage, review these final steps in the homebuying process.
To help ensure the home is in the condition you expect before you commit to your purchase, you’ll typically want to hire a home inspector to conduct a professional inspection of the property. They will take a few hours to thoroughly examine the home, including the key structural elements and mechanical systems. This process is far more thorough than what an average homebuyer should examine on their own. A home inspection is important to help you catch hidden issues so you can negotiate a solution with the seller or back out of the deal.
While the mortgage process arguably starts when you apply to get preapproved, you won’t submit your official mortgage application until you have a signed contract to purchase a home. Along with details about the property you’re buying, your application will include your personal, financial, credit and employment information so you can formally select the details of your loan and have it processed. If you’re fully qualified and no issues arise, your loan should be underwritten and cleared to close without problem.
During the mortgage process, a home appraisal will be ordered on the home you want to buy. This will determine the value of the home based on its condition, features, location and other homes in the area that have sold recently. An appraisal is used to make sure that the sale price on your contract does not exceed the home’s appraised value. If the appraisal comes in too low, you may need to dispute the appraisal, increase your down payment or try to negotiate a price reduction with the seller to close the “appraisal gap.”
When the steps above and any other contingencies on your contract have been fulfilled, you’ll be ready for the closing of your purchase. This is traditionally an in-person meeting between you, the seller and any professionals involved such as agents and lawyers. At your closing, you’ll sign the final documents and pay your closing costs, and your loan will be funded, the home’s title will be transferred to you and a new deed will be recorded. Then, the home will officially be yours! If your contract allows you to move in immediately, you’ll receive they keys and can head straight to your new place.
Being prepared for the final steps of the homebuying process can help ensure you enjoy a smooth and successful home purchase. If you’re looking for home financing options and expert advice, contact us today.