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Buying a home is a very stressful and intimidating process. You need to get pre-approved for financing, find the perfect home for yourself, make an offer. This does not end here as once your offer is accepted, you have to go through another stream of processes before you can celebrate your house ownership.
Ok, now you have found the right realtor, picked your dream house, made an offer and your offer is accepted. So, what’s next? One of the first major items in the escrow process is the home inspection. Hopefully, you took some time for yourself to have a quick celebration. Now, with the escrow clock ticking, it’s time to get busy so that the closing is smooth and on time. Hopefully, you already informed your lender of the accepted offer so they can get moving on your financing. Be sure to also contact your insurance agent to get your coverage ready.
Also Read: How to Find a Home & Make an Offer
When a buyer’s offer is accepted, it is natural for a buyer to wish numerous visits before the closing day. This includes meeting with real estate agents, inspectors, contractors, appraisers, and more. You will also make sure you schedule a final walk-through which your realtors will set up. Thus, if you are buying a home this fall, it is important for you to know what to expect as a buyer, especially when your offer is accepted.
Here are six steps you need to take once your offer is accepted.
1. Connect with your real estate team
Talk to your real estate team and tell them you are now under contract. This will get the ball rolling and your real estate agent will be on his toes to get you through the process. Set the dates and time quickly for closing and inspection. For this, you might need an extra person so be prepared to hire one. Your team can include a real estate agent, an inspector, attorney, and insurance agent.
2. Make your earnest money deposit
When you are in a contract, the seller expects you to make your earnest money deposit. But what exactly is earnest money? Earnest money is a show of good faith that you plan to go ahead with the home purchase. It can be around 1 to 3 percent of the total sale price. Come up with this cash, so your real estate agent can hold it in an escrow account. Later, it can be merged in our down payment or closing costs.
It is important to mention here that you will have to specify if you can get your earnest money back if the sale is not finalized. Thus, include a clause to make your funds refundable.
3. Get an Appraisal
An appraisal is the most indispensable part of mortgage underwriting. Lenders use the appraisal to make sure the home is worth the amount they want to borrow as it gives an estimate of the home’s value. A lender will schedule an appraisal as part of the loan application process, so as a buyer you will have to pay it. Generally, appraisals range between $300 to $400. If the appraisal price is more than what you expected, you can always ask for negotiations. You can also consider making up the difference in cash if you are motivated enough to seal the deal.
4. Buy Homeowners Insurance
By now, you must be excited about the closing as you would feel you are almost there. But, make sure you have proof of homeowners insurance ready at this point. Once you get a policy, the insurance company should prepare the documentation your lender needs to verify your coverage. Ask your insurance agent about the amount of insurance you need and what will be the right number. Homeowner’s insurance includes any damage from the wind, fire, lightning, or theft.
5. Look for an inspector
Rely on the agents working on your file. You can ask your realtor, mortgage broker, or even your solicitor for a recommendation. Your mortgage lender in some cases may require you to choose an inspector from their approved list. It is imperative to get a reputable inspector so that you can uncover any potential issues with the home. The inspection is typically paid by you and it is worth every penny unless you are a home inspector.
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6. Be present during the inspection
If an inspector does not want you there then that is a red flag. Look for a new inspector. The seller will not typically be there and it is preferable that they are not so that the inspector gets a completely unbiased opinion of the home. While the inspector goes through the house feel free to ask questions and I am sure he will want to show you several items.
After the physical inspection is complete, the inspector will deliver a report to you over the next few days.
So what should you expect from the inspection report?
Don’t get scared – the report may be lengthy – all homes have issues especially older homes. As long as you have a good inspector all the issues will be pointed out. The items you want to pay attention to are any major red flags. Small items can easily be fixed and you can have the sellers fix them prior to you moving in. Major red flags include items such as foundation problems, joist issues, floor support items, or roof problems. A good inspector will point these out to you to pay special attention to.
Once you have reviewed the report you have to decide if you want to fix the items after closing or amend the offer to ask the seller to fix certain items prior to closing.
Don’t get too picky on the little items but do pay attention to any medium or large issues to have the sellers fix as part of the purchase agreement. You can look to amend the purchase price to account for the issues that you may need to fix after you move in. If the problems are more than you can bear, then sometimes you have to simply walk away and look for the next property. Good luck!!
If you need expert advice in picking the right realtor for you, finding the house of your dreams, and approving for mortgages, leave us a message and we will reach out to you before you even know.