FIRST-TIME HOME BUYER FAQ #3: My Offer Has Been Accepted…Now What?

FIRST-TIME HOMEBUYER FAQ#3

MY OFFER HAS BEEN ACCEPTED NOW WHAT?

CONGRATULATIONS! There are many steps involved but I will go over the more general ones for now.  NOTE: Steps can vary per state and per escrow.

First off, the first-time home buyer’s good faith check* is turned over to the 3rd party escrow company and processed (cashed) and held in account to be later incorporated into the down-payment funds pending close of escrow.

At this time your Realtor will schedule all necessary inspections. You have an option to choose your own licensed professional inspectors (not appraiser) as well but they need to be able to act FAST. The sooner-the better to get an idea of what is right and wrong with the property, leaving you plenty of time to negotiate repairs with seller should any be deemed necessary. There is usually a contingency period of 10-17 days based on the contract(s) in which the buyer has to complete their investigation and decide whether or not they are going to move forward. STUDY your contract, know what the timeframes are. Make sure you, the Realtor and lender are all on the same page in terms of known deadlines.

Buyer usually has to pay for the inspections same day at the time of inspection.  Inspections generally consist of:

  • Physical home inspection (PLEASE get one even if its a new home!)
  • Termite inspection (even if not built into the contract as a personal FYI)
  • Appraisal (contacted by lender and performed by outside co) to determine the home’s value based on recent sales of similar homes in the area
  • City inspections (depending on the city of purchase).

ESCROW PROCESS AFTER OFFER HAS BEEN ACCEPTED:  Here are just a FEW of the many steps involved once your offer has been accepted. [NOTE: The order and number of steps is subject to change per state, escrow, and oftentimes based on the results of other previous steps, so keep that in mind].

  1. Good faith check cashed – escrow opened.
  2. Inspections and appraisal performed.
  3. Repairs request, if any, discussed with buyer, negotiated by REALTOR.
  4. Final home price discussed with buyer, negotiated by REALTOR if appraisal comes in lower than agreed offer price. This is very important as some sellers in a seller’s market or highly desirable area may request that buyer make up the price difference using their own money – yikes!
  5. Homeowner’s Insurance secured
  6. Title report is reviewed and signed. You are looking for back taxes, easements, liens, and any other claims to title someone else may have on the property that could interfere with your purchase of or KEEPING the home.
  7. Natural Hazard Disclosure Report is reviewed and signed. You want to know if the home is in a flood zone, fire hazard area, on an earthquake fault, landslide area, radon area, and a plethora of other things you never considered that are extremely important to know.
  8. Escrow instructions thoroughly reviewed and signed (during the time of steps 2-7)
  9. Buyer Walk-thru and re-inspection if there were repairs needed that are not visible to the untrained eye or inaccessible (i.e. attic, under the house, wiring etc.)
  10. Loan is approved
  11. Escrow or mobile notary hired by escrow company schedules the signing of closing docs with buyer
  12. Loan is funded
  13. Home is recorded under buyer’s name
  14. I meet with you to hand over the keys to your new home! You’re excited, I’m excited! It’s a wonderful day!

When you are ready to buy, do not hesitate to give me a call at 310-508-4354 and I’ll be more than happy to get you started in the home buying process!

*good faith is different than a down-payment check in that it is a small % of the down-payment money paid upfront to show good faith that the buyer is committed to the escrow.

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