You’ve gone on copious open house tours, found the home of your dreams, and finally your offer has been accepted! But wait, what are you supposed to do now? While a real estate agent can help walk you through the next steps, it’s important that you’re prepared for what lies ahead. Here are 11 things you need to know so that the process of moving into your home will be smooth and painless.
- Start the mortgage application process – You should already have a pre-approval
Contrary to popular belief, it is completely acceptable (if not strongly recommended) to meet with multiple lenders to discuss home mortgage options. This can be a time consuming process, so make sure you’re completely honest about the state of your finances with the various lenders. The more transparent you keep these conversations, the easier it will be to get a realistic idea of which loan is best for you.
- Hire an attorney
It’s never too early to hire an attorney to represent you in a home purchase. Many real estate attorneys will even make themselves available to review your offer before it is submitted. Regardless, you should at the very least retain counsel to negotiate and draft the purchase and sale agreement and represent you up to and at closing. Most states, including Massachusetts, require an attorney be present during a bank loan home closing, to represent the interests of the lender. If you have not already selected your own attorney, you can speak with the lender’s counsel to decide whether you are comfortable having that person also represent your interests. If it is a good fit, you will generally save significant expenses by “sharing” counsel with the bank.
- Secure a home inspector
There’s no doubt that you’ve examined your new home from top to bottom, but have you really seen everything? From roof repairs to water tank pressure, a licensed home inspector can give you the complete picture. You might also want to consider opting for a termite and/or pest inspection and asbestos inspection.
- Sign purchase and sale agreement
In Massachusetts, it is customary for buyers and sellers to sign a purchase and sale agreement (P&S). This legal document is signed after both parties have come to an agreement about the purchase of the home. The P&S will include the final sale price of the home as well as the specific terms and conditions about final closing costs. P&S money is rarely refundable, so you should be absolutely sure that you want to purchase the home before signing on the dotted line.
- Purchase insurance for your new home
This might seem obvious but, among the chaos of home buying, it’s easy to forget about the importance of purchasing home insurance. There’s a lot to consider when deciding which home insurance policy is best for you. Although standard policies typically protect against hazards to the home itself, like hail and fire, you might want to consider coverage for personal belongings and/or other structures on your property.
- Obtain mortgage commitment letter before financing contingency ends
Once your application has been approved, you should expect to receive a written mortgage commitment letter from your lender. This letter outlines the lender’s intentions, including:
- Type of loan being used
- Amount of money borrowed
- Length of the repayment period
- Interest rate and other terms of the loan
Since the term “mortgage commitment” is used loosely, you’ll need to clarify your lender’s specific conditions. If you don’t understand any specific terms or clauses, now is the time to ask. It is always a good idea to have your legal counsel review the letter before the contingency has expired.
- Arrange for movers
Even after you’ve finalized the paperwork, one of the most daunting tasks still lies ahead – moving your stuff. It’s recommended that you hire movers as far in advance as possible. When deciding which movers to use, don’t rely on a quote over the phone. To minimize confusion and possible miscommunications, make sure all of your conversations with the movers are documented via email.
- Transfer utilities into your name
The last thing you want is to make your big move, only to find the lights out in your new home. Each of your utility companies will have their own lead times, but it’s typically recommended that you contact each of them two weeks ahead of your move.
- Secure bank check for necessary funds at closing
Banking hiccups can happen, and you don’t want a cash flow problem to delay your closing. Avoid the issue entirely by bringing your down payment in a certified bank check – don’t even try a personal check. You can also wire the funds to the closing agent a few days early. One important thing to remember is to make sure your funds are coming from a source that’s already been approved. As an example, a closing cost/down payment loan from your parents might require advance approval from your lender.
10. Schedule final walk through
Ideally, you should schedule your walk through an hour before your closing. This walk through is your opportunity to make sure the house is exactly in the shape you expected and to double check any areas of concern that came up during the inspection. If you do run into issues, such as damage or unwanted furniture that should not have been left behind, immediately contact your lawyer. They’ve probably seen it all, and can quickly address the issue with the seller’s attorney.
11. Confirm time, date and place for closing
You’re almost ready to move into your new home, but not before you confirm the final details of your closing. Exactly where the closing is held, and who is present, depends on your state. You should, at a minimum, expect the home seller, seller’s and buyer’s real estate agents and attorneys, and lender’s counsel (if different from your own). There’s bound to be at least one curveball as you finalize the details, so allot at least 1 hour in your schedule.