Insider's Guide to Saving Money &
Eliminating Risks When Buying Your First Home!
Chapter 7 – Closing The Deal
Drawing up contracts, having the final walkthrough, and going to the closing are the last steps you will have to take when buying your first home. This is the time when having a real estate agent you can trust, and a little knowledge of home buying comes in handy.
But what about all of those other miscellaneous fees that will come up before and during the closing? You should be aware of additional fees when you apply for a loan and when you are closing on your new home.
Contracts
Your purchase offer was the first contract you will be involved in when you want to buy a home. You should refer to this contract during the closing period to make sure that your rights are covered and that you are getting everything you pay for.
By writing a solid purchase offer that outlines what you want from the homeowners, you will be protected in case of disagreements and other issues before closing. But a purchase offer is just one of many pieces of paper you will have to see and sign before you can move into your home. Other contracts include:
- Contingencies
- Builder contracts
- Mortgage contracts, and
- Closing agreements
These contracts may vary in length depending on the forms being used and the information that will have to be included.
Contingencies
Real estate contingencies can be added onto an existing contract or can be created as a separate contract depending on what you would like to include in the purchase offer. Contingencies can include a wide range of items, including:
- Home inspections and pest inspections
- Home appraisals
- Financing
- Septic system tests
- Appliances that will stay in the home, and
- Property surveys
Contingencies can make or break a sale, so you should be sure to use the correct forms when filing contingencies and to word them correctly.
You will need to include a resolution for repairs that may need to be done before you can move into the home. If it is agreed upon in writing that the homeowners will take care of all or some repairs that may be found during a home inspection, this will save time later on.
You should also include ways to get out of the deal that include loan denial, repairs that cannot be fixed, and lead, mold, or radon that is found in the home. Having a way out of the contract will save you money and time.
If you are buying a home that is for sale by owner, you should find an attorney or real estate agent that is willing to help you create a contingency list and edit it where necessary. Do not rely on the seller’s agent because they are after their client’s best interests and not yours.
Builder Contracts
If you are buying a new home from a builder, you will have to sign a builder’s contract that states you have the financial means to pay for a new home, that you have decided on a location for your new home, and that you are ready to build.
You should hire an attorney at this point to go over the contract to see if there are any problems that will have to be ironed out before you begin building the home.
Mortgage Contracts
In order to complete your home buying, you will have to be approved for a mortgage by a lender and you will have to sign a contract in which you agree to an interest rate, monthly payment schedule, rate plan, down payment, and other fees.
These contracts are standard loan contracts that will explain the consequences of not paying your mortgage. You should read this paperwork carefully before signing anything.
Closing Agreements
These are the final contracts you will have to sign before you get the keys to your new home. You should read this paperwork carefully and be prepared to pay any closing costs at this time.
Home Warranties
If you are buying an older home, you may want to purchase a home warranty that will cover repairs that will have to be made during your first year of ownership.
While a home inspection will catch any immediate repairs, no one can foresee an oven falling apart or a dryer burning out. Since you may not have a lot of extra money left over after paying for closing costs, down payment, and mortgage payments, having extra insurance will allow you to make the repairs you will need.
Most policies will cost between three-hundred and five-hundred dollars. Coverage will begin the day of your closing and will last for a year. You will have the option of renewing the policy if you would like at that time. If you need to have an appliance repaired, you may have to pay small co-pay at the time of the repair.
Not all policies are the same, so you should do your research to find the best deal. Compare the types of repairs that are covered under the policies and choose the one that fits your home.
Closing
When you finally arrive at the closing, you should expect to:
- Sign contracts
- Do a final walkthrough
- Pay closing costs, and
- Get your keys
The closing can take an hour or two, but usually moves quickly because there is little left to do. At the closing you will probably meet the homeowners. This could be the first time you will meet them. This is a good time to ask if there is anything about the home you will need to know.
Sign Contracts
When you sign the contracts, read them carefully to make sure that everything that has been discussed is in the contract. Ask questions that you may have at this time.
Final Walk Through
The final walkthrough of the home will take place before or during the closing. This is the final chance for you to see the home before it becomes yours. Make sure the items on your contingency are in place so that you can sign the contracts.
Paying Closing Costs
Typically, the buyer will have to pay the closing costs associated with buying a home. But in a buyer’s market, you may be able to add a contingency that states the seller will be responsible for all costs. This may appeal to sellers who want to sell their home quickly.
When deciding who should pay the closing costs, you should research laws that may be in place that dictate who pays for what. Many times, buyers and sellers will agree to split all costs including closing, home inspection, pest inspection, and home appraisal costs. You will have to negotiate with the sellers to see which you will be responsible for.
Get Your Keys
After signing the contracts, you will receive the keys to your new home. This is an exciting feeling and one that will be with you for a long time!
Congratulations! You now have The Complete Home Buyers Handbook!
Now you know what to expect in purchasing a home...
why not call a Realtor!
Call or Text: 405-820-1740
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