The Buying Process: Preparing for Closing on Your New Home
You still have some serious ground to cover before closing on a house. Here’s what you need to do:
Gather Your Team
When you’re this close to owning a home, you don’t want to do something dumb to mess it all up. So make sure you have a solid team on your side, starting with an experienced real estate agent—if you don’t already have one. You definitely need an expert who knows your local market because, let’s be honest, no one likes unpleasant surprises.
An agent can also help you network with other valuable team members you may need such as a(n):
Title insurance agent
Create and Complete Your Closing Checklist
After you gather your team of experts, they can help you review your contract and prepare for closing contingencies. Closing contingencies are conditions listed in the contract that must be met before the home transaction becomes legally binding. Contingencies may include:
Home inspection: To protect yourself from a bad deal, hire a home inspector to make sure there aren’t any hidden faults that could cost you big bucks after your seller is long gone.
Appraisal: This is required by your mortgage lender to keep them from loaning you more money than the house is worth. You or your real estate agent can arrange for a professional appraiser to estimate the property’s current market value. The appraisal fee will be included in your closing costs.
Loan documents: Even if you were preapproved for a loan, you still have a few more hoops to jump through to get final approval on your financing. Prepare yourself by organizing all your documentation: identification, income statements (pay stubs, W-2 forms), asset statements (bank accounts, investments), insurance information, and a copy of the contract. You’ll also need—if applicable—a divorce decree (child support, alimony information) and bankruptcy papers. For a detailed checklist or financing information, connect with a mortgage lender.
Homeowners insurance: Homeowners insurance is a must because it covers the cost to repair, rebuild, or replace your new home or items in your home if it is damaged or destroyed. Typical policies also protect you with liability coverage against accidents in or on your new property. Homeowners insurance is often required by a lender and is usually included in your monthly mortgage payment. So make sure you find a good insurance agent who can help you get the best coverage for the lowest cost.
Final walkthrough: Not to be confused with a home inspection, the final walkthrough—which your real estate agent will schedule—typically happens 24 hours before closing. At this point, all the seller’s belongings should be completely cleared out, except for anything you agreed to keep. Bring your contract to make sure the condition of the home matches the original agreed upon state. After all, that’s what a walkthrough is all about. Test major appliances, light fixtures, toilets, windows, doors—and basically anything you can think to test. Take your time and bring any unwelcome surprises to your real estate agent’s attention immediately.