If you have had your offer accepted, congratulations! That is a big step. You may think now is the time to relax. After all, you've worked hard to get a mortgage pre-approval, connect with a Realtor, see houses, submit an offer, negotiate, and agree to the terms. However, there is much left to do, so it's important to stay focused to get through the Escrow process. I have broken the next steps down into small, manageable tasks that will help you stay on track. Your Realtor will be there for you every step of the way, guiding you through each task. If you follow these 10 steps after your offer is accepted, you'll be on track towards closing your Escrow successfully.
You need to submit your Earnest Money deposit to Escrow very shortly after opening Escrow. If you don't remember how much Earnest Money is due, ask your Realtor to double check your Residential Purchase Agreement for the amount due. Usually, the easiest way to submit the funds is to set up a wire transfer from your bank account to the Escrow account. The Escrow officer will send you instructions for submitting the Earnest Money Deposit. The Earnest Money is essentially a safeguard for the sellers, who are taking their home off the market because you have expressed interest in purchasing it, in good faith.
Connect With Lender
After your offer is accepted, you'll need to re-connect with your mortgage lender. You already got your pre-approval from them, but now that you are under contract, it's go time. Your agent will send a copy of the fully executed purchase agreement to your lender. However, you'll need to touch base with the lender to see what additional documents they need from you to get the loan on its way to being funded.
You'll want to order a home inspection as quickly as possible. You'll have to find a time slot that works for you, your agent, and your home inspector. You want to have the inspection done, as well as the request for repairs negotiated prior to your contingency removal date. The vast majority of buyers will want a home inspection to make sure the home is in acceptable condition. There are many additional inspections you can do if you choose, though not all of them are relevant to every situation. Your Realtor can likely recommend a good home inspector that works in your area. You can opt to use this person, or hire your own home inspector. Once their inspection is complete, they will email you a full report with the findings within a few business days.
The company that is going to handle your Title Insurance will send your agent and you a Preliminary Title Report. This report will show any liens against the property, for example, unpaid HOA dues. Your Realtor can let you know if there is anything on the Preliminary Title Report that is concerning. There is usually nothing you need to do with the report, just review it and ask your Realtor or lawyer if you have any questions or concerns.
Home Owner's Insurance and Home Warranty
In order to get your loan to fund, you will need to have a Home Owner's Insurance Policy in hand. You can shop around at the various insurance companies to find a policy that fits your needs and budget. Often, the company that insures your car also offers Home Owner's Insurance. Once your policy is ready to go, let your lender and Realtor know.
If you requested a Home Warranty in your Residential Purchase Agreement, and it was granted by the sellers, it's time to order it. Usually, on the purchase agreement, the Home Warranty company is already noted. In California, the Escrow company typically orders the Home Warranty policy. Home Warranties can provide good value and peace of mind for home buyers.
Your lender will order an appraisal on the property. The reason for this is because they need to know whether the property is want is actually worth the amount of money you are asking for. If you offered $550K on a home worth $450K, this is not a safe investment for the bank. Usually, the appriser is accompanied by the listing agent. They often try to draw attention to the high points/upgrades of the home, and answer any questions the appraiser may have.
Utilities and Mail
When you are close to closing Escrow, you'll want to get your utilities turned on and transferred to your name. You'll want to get your gas and electricity going, and prepare to transfer Internet and cable over.
If you are going to be occupying your new property, you'll want to file a mail transfer with the post office. They will usually forward your mail to your new address for 1 year, which gives you ample time to update your address everywhere.
Talk to your Realtor to schedule a time to sign closing documents. This is often done with Escrow, though sometimes, a different Notary Public will do it. Either way, your Realtor will need to find a time that works for you and the person supervising the signing, so you'll want to get that scheduled.
Near the end of your Escrow, you'll do a final walkthrough of the property with your Realtor. This is NOT a time to re-open negotiations for repairs. Rather, you are looking for the property to be in a similar condition to when the contract was signed. You also want to make sure that everything the sellers agreed to leave has been left, and that their personal belongings are out of the property. Normally, the final walkthrough is quick and uneventful.
It's time to meet up for your scheduled document signing. You'll need to sign your finalized loan docs, and then these will be sent back to the lender, in order for the loan to fund. To this meeting, you'll need to bring a driver's license or other approved form of photo ID. The signing usually takes about 1 hour. If all goes according to plan, the loan will fund, Escrow will close shortly after, then you can get your keys and move in!
Buying a home is such an exciting time! It's tempting to get caught up in the joy of having an offer accepted, but you need to stay focused. There are numerous steps you need to take during the Escrow process. A good Realtor will guide you through each of these steps and never leave you in the dark. If your Realtor works with a Transaction Coordinator (as I do)--even better! Then, there are two people who are managing the timeline and making sure nothing falls through the cracks. As always, please reach out to your Realtor when any questions arise during any of the steps listed above. Once these 10 steps are taken and you receive your keys, you can celebrate, relax, and enjoy your new home!!