You’ve found a house you really love, you’ve written an offer, negotiated, and it was accepted! What now? This process is typically a 30-45 day process.
The first step is getting your earnest money to your Realtor or your title company depending on your contract. Earnest money goes towards your down payment or closing costs when all is said and done, but it can be lost if you don’t live up to the deadlines in your contract. It is very important to keep track of those deadlines, and hopefully your Realtor will do that for you as well.
From there, you get the seller disclosures from the seller, and depending if it is new construction or existing, it will be a 7 page document that tells you everything they know about the property, in the form of a yes or no questionnaire. During the seller disclosure period you will also get the title commitment to make sure that the seller is who they say they are. That will be sent to your Realtor to review, where they can identify any red flags with you.
Next is due diligence time, when you make sure that you feel confident and comfortable with the purchase. What you’ll find is that you will write the offer super quick and then you will spend the rest of the time doing the due diligence. This is for anything that is vitally important to you. Making sure the house is in the right school boundaries, checking meth, mold, or radon, looking at the local sex offender statistics for that neighborhood, or anything else that is important to you. I have a whole list that I give to my buyers to go over that, but it is your turn as a buyer to do your due diligence. Utah is what is called a “buyer beware” state, meaning once you buy the house it is yours and you can’t go back to the seller and ask for additional repairs or things taken care of. So do your part as a buyer and inspect what is important to you during the due diligence period.
What comes after that is the financing deadline, which includes many steps. The lender needs to know that the house is worth the contract price, so they send out an appraiser. This is an extra cost to you as a buyer, and sometimes it is billed in your closing costs, other times it is charged to your credit card depending on who your lender is. The appraisal needs to be ordered fairly quickly because the appraiser needs time to go out and do the inspection, and get the report back. Once the report is back, and all the documents the lender has gathered from you, they take all that information, combine it, and send it to the underwriter. I think that the underwriting process is probably the worst part of buying a home, but that is probably why I’m a Realtor and not a lender. During the underwriting process they pick through the documents and try to find flaws and failures. It is their job to find the flaws, so if they suspect anything they will come back and ask for supporting documents to answer some of the questions they might have, and this is why the financing deadline is so long in your contract.
I always look for loan approval before the financing deadline deadline passes, because that will protect your earnest money. Once you have loan approval, that means that everything else in the process can begin to happen.
After loan approval is closing disclosure. The closing disclosure is a 3 page form that goes over all of the costs associated with buying your house, and if you don’t sign it at least 3 days before closing it will push your closing out. It is super important right at the end to make sure that happens.
After that, as a Realtor and buyer we will do a final walk through of your home to make sure that it is in the same condition that it was when we saw it and put it under contract. Sometimes people move, and things break, so I always make sure to check under the sink to make sure it isn’t leaking, toilets, water heaters, and so on. You want to do that closer to closing but you can do it up to 7 days before closing. I have gotten to the house and had things not be fixed that were agreed upon during negotiation, so we have to go back and verify that information and figure it out last minute.
Then we get to go to the title company and sign. This typically happens on your settlement deadline, and this is the most anticlimactic part of the process, because all you do is go to the title company, sign your life away and you don’t get anything in return. You don’t get your keys at this point, unless you are working with builders (sometimes they will give you the keys at signing), but for the most part you sign and wait.
What happens between signing and getting keys? A lot!
The title company sends everything to the lender and the lender reviews it one more time to make sure that everything is correct, and then they wire their money to the buyer’s title company. After that, the buyer’s title company wires their money to the seller, and the seller’s title company makes sure all the loans are paid off, and that is called funding and recording. It can be a quick process, or it can take 24-48 hours. During that time, depending on how your contract was negotiated, is when you get your keys and possession takes place. Sometimes possession is even longer, but that is typically negotiated up front so you’ll know what to expect. I have found that possession and getting keys is probably the biggest fight towards the end, so part of our process is making sure that everything gets resolved long before that happens.
Things to do before all of this include the transfer of utilities into your name, because we don’t want the seller to not transfer their utilities out and have you without power when you move in. Also, schedule a moving truck, possession typically happens on 5pm of that deadline or funding, so you want to know exactly when that is going to happen so you can plan your moving. If you are working with me I do offer a free moving truck, that you can use on moving day to make life a little bit easier.
This is a quick rundown of the contract to close process, if you are looking to buy or sell don’t hesitate to reach out to me I would love to help you.