7 Parts of Home Buying that Most Consumers Know Nothing About
by Ed Kunkel, Jr., Realtor® and U.S. Army Veteran
What an exciting time it is! You made an offer on a home that was either accepted or you and the seller came to an agreement in terms. First of all, congratulations!
Now more work begins – you have lots to do in a short amount of time, and it’s important to have a good plan.
Here are 7 parts of the home buying process most consumers are clueless about. Learn these things, and you know more than the typical home buyer.
1. The Home Inspection
It’s very likely that your offer is subject to an inspection – even if it’s a brand new home. Inspections are important, and it’s worth every penny to have a quality licensed inspector go through your new home. Every market area is different as far as what is customary, which is all the more reason to have a Real Estate professional representing you through your experience.
What is customary for Western Washington, where I’m from, is to have a structural and pest inspection completed, and can commonly be done by the same inspector in one visit to the property. Inspections can cost anywhere from $300-500, and can last for longer than an hour. Your agent can and should give you recommendations to help you choose an inspector. And most inspectors I know appreciate having the buyer client present during the inspection to have conversations about their findings as they go, and to answer questions about maintenance tips, and other issues.
2. The Appraisal
Some consumers may confuse an inspection with an appraisal – these two parts of the process couldn’t be any more different. Inspectors are not concerned about a home’s value, their task is to thoroughly inspect the condition of a home from top to bottom, and disclose all findings – good, bad, or indifferent. In an appraisal, the task is to determine the value of the home to justify loaning money for it. Sometimes the appraiser deems it necessary to add conditions to the appraisal that must be met before the sale is final. Conditions can be anything from fixing missing steps, to getting a 5-year roof certification, to replacing faulty siding. It’s not a safe bet however to expect the appraiser to act as an inspector and/or a negotiating tool to convince the seller to make repairs.
3. Title Insurance
The title company will search available records for any liens or clouds on the title that may exist on the home you’re buying. It’s obviously important to both you and your lien holder that clear title will be conveyed. Northwest MLS forms are written specifically to mandate that the seller will authorize the buyer’s lender to apply for a home owner title policy at the seller’s expense, unless otherwise agreed upon. If you want to learn more about title insurance, the best resource for answers is the title company that is covering your sale. The title company should be listed in your purchase contract.
4. The Home Insurance Binder
It’s time to go see your insurance agent and talk about bundling your insurance needs. If you don’t have a regular insurance agent, have your Real Estate agent give you some referrals to follow up with. You will need a homeowners policy as a lending condition, and it’s best to get this taken care of once you are past your inspection and you know you are committed to completing your purchase.
5. The Complete Walk Thru
There are a dozen or more reasons why this is important, but I will only mention a few. If you negotiated some repairs after your inspection, you should carry a copy of your contract with you to go through and make sure the repairs meet or exceed your expectations. Also, look at the ceilings, walls and floors for any damage which may have occurred during the sellers move out. Did the seller leave any trash behind? Are there any fixtures, appliances, or other items that are missing from the home that should still be present in the home? If there are any issues that need to be resolved, this moment in time is where you have the best leverage as the consumer before you go to signing.
6. Setting up a Signing Appointment at Escrow
Your escrow officer will be in contact with you to gather information from you as needed, and to prepare you for what you will need to bring in to your signing appointment. Part of your signing will likely include documents that are notarized, so make sure you have two pieces of identification. Make sure that you follow through with what they ask from you to make your life easier. Take the time to read your loan documents, ask questions if you don’t understand something. Your appointment is not a race to get done, take your time.
7. Taking Possession
It’s a common thing to not have your keys to the home right away. Unless you have a special arrangement in your purchase agreement, you cannot take possession of the home until title has been transferred to your name. This usually happens quickly, as long as your loan gets funded in a timely manner after you sign at escrow. For more clarification on when to expect your keys, ask your agent.
Ed Kunkel, Jr. is a Managing Broker/Realtor® at Keller Williams Realty in Olympia, Washington. Visit Ed here. Ed’s Military History: Veteran – U.S. Army and Air Force Reserve; Highest rank, E5; 11 years combined military service.