Making an offer on a house, much like a marriage proposal, is equally exciting and anxiety-inducing. After spending quality time browsing listings, hitting up open houses, and obsessively fiddling with mortgage payment calculators, you've finally found the house you want to spend the rest of your life with.
Making an offer on a house
You and your real estate agent put together your offer, aiming for the perfect dollar amount and closing terms. Maybe you even included an offer letter to show you're really committed to be making an offer on a house. Your agent submits the offer, but what can you expect next?
"Once you submit an offer, one of three things can happen," says Kevin Kieffer, a real estate agent in Danville, CA. "Your offer is accepted, your offer is rejected, or the seller counters your offer." OK, so then what?
If your offer is flat-out rejected
The seller might decide the amount you're willing to pay is lower than what she's willing to accept. If this happens to you, Kieffer suggests moving on, as it's likely there's too large a gap between you and the seller on what you think the home is worth.
If your offer is countered
If the seller counters your offer—coming back to you with a dollar amount that's slightly higher than yours—you're still in the game! You can try making another offer on the house to find a price that you are both happy with.
"It's time to relook and either agree to the counter terms or recounter with your terms modified slightly," says Kieffer. That back-and-forth goes on until either the seller accepts an offer or one of you decides to walk away.
If your offer is accepted
Once you reach the point of an accepted offer, things really get exciting.
"You will have to start your financing and schedule for a home inspection and satisfy all contingencies in your contract and move forward to your closing," says Rena Kovach, a real estate agent in Vienna, VA. Though the process is slightly different in every state, this is what your punch list should look like.
1. Get your financing in order. Hopefully you went into the home-buying process with a pre-approval for a mortgage. Now is the time to move forward with your lender on the amount of money you need to buy the house. Work with your mortgage broker to put together the mountain of paperwork most lenders need to see before giving you the thumbs-up. Your lender will require an appraisal by a licensed appraiser as part of this process, and will usually let you know when that needs to happen.
2. Have the home inspected. An inspection isn't required by most lenders, but it's a really, really good idea. The timeline for inspections is slightly different in every state: Some have you sign a contract and then do the inspection, others do it in reverse. Either way, there will be a limited time period when you can make changes to the deal based on the inspection. Depending on what the inspector turns up, you might ask the seller to make some fixes, ask for a concession, or even just walk away.
3. Find homeowners insurance. Almost every lender will require you to have signed up for homeowners insurance before approving your loan. Shop around and don't be afraid to negotiate. You can save money by bundling your homeowners insurance with any other kind of insurance you have, like auto insurance.
4. Move toward closing. While all of this is happening, your lender will be preparing your loan. If having a real estate attorney is common in your state, then your lawyer will be making sure everything is in order with the closing documents. The title company will probably want to see a survey, and if one doesn't exist, you'll have to have one done.
During this period, most of the work happens behind the scenes, with someone on your team—real estate agent, lawyer, lender, title agent—popping up to ask for a document here and there. Your primary job is make sure you have your down payment ready. Don't make any big purchases, because that can mess with your credit.
When everybody gives the green light and your loan is approved, it's time to head to the closing table and officially buy your home. Usually, you'll do a final walk-through of the property with your real estate agent a day or two before closing to ensure nothing has been damaged and that all changes specified in the contract were completed. Sign on the dotted line, and you're done! Now you can focus all your energy on moving into your new home.
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