Congratulations! You`ve just signed a contract on your dream house. You`re probably feeling excited and relieved that the buying process is over. But what happens now? Here`s what you can expect after signing a contract on a house.
1. Earnest Money Deposit
One of the first things you`ll have to do after signing a contract on a house is make an earnest money deposit. This is a deposit made to the seller as a sign of good faith. The earnest money shows the seller that you`re serious about buying the property. The amount of the earnest money deposit will vary depending on the location and the price of the property. Typically, the earnest money deposit is around 1-3% of the purchase price of the home.
2. Home Inspection
Once the contract is signed, you`ll want to schedule a home inspection. A home inspection is a thorough examination of the property by a professional inspector. The inspector will evaluate the condition of the home and provide you with a detailed report of their findings. This report will highlight any potential issues with the home, such as problems with the roof, foundation, plumbing, or electrical systems. Depending on the results of the inspection, you can negotiate with the seller regarding repairs or possible price adjustments.
3. Home Appraisal
After the inspection, you`ll need to schedule a home appraisal. An appraisal is an evaluation of the home`s value by a licensed appraiser. The appraiser will look at the condition of the home, the location, and the current real estate market to provide an estimate of the home`s value. The appraisal is necessary for the mortgage lender to determine how much they are willing to lend you to purchase the home.
4. Mortgage Approval
Once the appraisal is complete, your mortgage lender will review your loan application and the appraisal report to determine if they will approve your loan. If you are approved, the lender will provide you with a commitment letter outlining the terms and conditions of the loan. This commitment letter is a crucial step in the buying process as it ensures that you have the financing to purchase the home.
5. Closing
Finally, it`s time to close on the house. Closing is the last step in the home buying process. During the closing, you`ll sign all the necessary paperwork to transfer ownership of the property to you. You`ll also pay closing costs, which include fees for the appraisal, inspection, title search, and other expenses. Once everything is signed, the keys to your new home will be handed over to you, and you`ll officially be a homeowner!
In conclusion, signing a contract on a house is just the beginning of the buying process. There are still many steps to take before you can move in. But with the help of a good real estate agent, inspector, appraiser, and mortgage lender, you`ll be well on your way to owning your dream home.