The Steps a First Time Homebuyer Takes From Signing a Contract to Getting the Keys
Congratulations – you have a North Carolina Real Estate contract! What’s next? As a first time homebuyer, the process will be new to you, and it can be stressful. A good Buyers Agent can review the main steps and options with you before you go under contract. The key areas are loan approval, repair negotiations, legal arrangements, utilities/insurance setup, and funding. We will give you some guidelines here, but every transaction is different, so ask questions!
As the buyer, you must stay on top of gaining loan approval, providing required information quickly, paying required bank fees, and keeping in touch with your lender. If the home does not appraise for at least the purchase price, or if you cannot get a loan as described in the contract, you may be able to walk away from the deal with a refund of your earnest money. However, you will not get a refund of what you paid the lender to appraise the property.
Your agent will schedule the inspections called for by the contract and help you draft a repairs request. The seller may or may not agree to make all requested repairs, so be prepared for another negotiation. And depending on several factors (contract alternative 1 vs. 2, cost of repair contingency, repairs needed, seller’s response to repair request, and more) you may be able to walk away from the deal and get your earnest money deposit back if things do not work out as specified in the contract. Again, you will not get a refund for what you paid the inspectors.
You will need a closing attorney, who will review the contract, initiate a title search, order a survey (optional), work with you to schedule the closing meeting, work you’re your lender to properly record all related costs, conduct the closing meeting including explaining lots of documents, record the deed, answer questions, and a abundance of other services. You may have special needs, such as if you need to be out of town and need to grant Power of Attorney to someone else to attend closing and sign for you. Discuss those needs with your agent and your attorney well in advance of closing. Again, if the deal falls apart, you may still incur some expenses, such as for the title search and survey services.
You will need to select a company to provide home owner’s insurance a couple weeks before closing, in order to allow the attorney and the insurance agent to communicate. At least a week before closing you will need to contact appropriate utilities and arrange for the electric, water, gas, cable, and other services to be turned on in your name.
No surprise here – buyers usually have to bring some money to the closing meeting! How much? The attorney will provide a document, called a HUD Statement, detailing all your costs and all the funds available to you – and you’ll have to pay the rest, with a certified check typically. But you get that right before closing. So you need to have an estimate of how much you will need in advance, and make sure you have the funds in a checking account well in advance. Don’t expect to move money from a stock account or other source just before closing – the bank may insist on a few days to let a deposit clear before letting you use the funds for a certified check. And don’t expect the Good Faith Estimate you lender gives you to be an exact estimate of what you will need – those documents typically have to leave off several non-bank costs and credits. Talk with your agent to get the best picture of the amount of money you need to bring to the closing. Then, bring your checkbook, just in case there are some extra charges.
the bottom line is that when you are buying real estate, think of moving from the point of signing the contract to a successful closing as a project, and select a Buyers Agent who will act as a good project manager – one with the communication skills, work ethic, and attention to detail to handle all the things that come up.