Buying a new home can be daunting. After you get through the obstacles of getting a home loan, finding your perfect house, you have to navigate the waiting period of making your offer. If you have a dedicated agent behind you, this process will go smoothly, but it’s best to have a good idea of what to expect along the way.
What Happens After Your Offer is Accepted?
You’ve made a strategic offer, and it has been accepted! Now, the next step is a deposit. The deposit seals the deal and makes the transaction official. Your deposit is usually a percentage of the home’s purchase price and applies to the final sale price. Be sure you have this deposit ready when you make your offer, as it can often make or break the sale.
What is Escrow?
After your deposit is secured, you’ll start the Escrow process. In Escrow, a third party holds the funds from your loan to disperse to the sellers until the sale is finalized. However, the escrow process has grown over the years to include many other finalizing factors. This is where all parties will complete the sale. Your home loan will be finalized, the home’s condition will be inspected, and the legal documents will be completed. Titles are exchanged, funds are dispersed, and the closing is completed.
Additional Closing Costs
Don’t get swept up in the excitement of putting down your deposit and forget about closing costs. Closing costs are additional fees that cover other expenses of the home buying process.
In California, these costs run about 1-3 % of the final home purchase. They include fees to the lender for preparing the loan, credit checks and loan processing fees, escrow fees, appraisal fees, title search and examination fees, and inspection fees.
After closing costs, be sure you have also reserved funds for after-the-sale fees like the pro-rated property taxes, homeowner’s insurance, and mortgage insurance.
Preparation is the Best Strategy
Buying a home is exciting, but it’s not without its difficulties. Being prepared with the right funds, savings, and paperwork can save you many headaches – and may even save your sale.