BNI Growth Partners Power Team
Guide To
Home Purchasing
Step 4 - Under Contract Phase
Now that you are under contract, you will have to arrange
for several items to be done, and your lawyer will be there to assist you with
each step. Usually the following items need to be handled right away:
- Obtain a Home Inspection
- Remaining deposit funds will be due
- Mortgage commitment needs to be obtained
- Review of HUD form provided by and reviewed with your
lawyer
Relevant BNI Growth Partners Real
Estate Power Team Members Are:
Real Estate Transaction Lawyer,
Real Estate Agent,
Home Inspector,
Mortgage Broker,
Insurance Agent
Obtain a Home Inspection
This is your chance to thoroughly inspect the home inside
and out to determine if there are any problems with the property. Be sure to get
the service of a home inspector that understands the property type you are
purchasing as well as the homes infrastructure (electrical system, sewer system,
heating and air conditioning, …). Prior to the actual home inspection, they
should go over details of what they will be doing for you and listen to you
about your concerns. During the home inspection, your inspector should go over
details about what their concerns are, if any, and how to maintain the home and
infrastructure.
Examples of things they may discuss are:
- Electrical system
- Heating system and expected life
- Air conditioning system
- Roof condition and expected life
- Water problems
- Sewer system, especially if it is a
septic system
- Insulation issues
- Foundation
- Insect infestation
- Radon test
- Appliances
- Many other aspects not mentioned
here
Depending upon the results from this Home Inspection, you
may request certain items to be repaired or for an allowance to repair it on
your own. Usually nothing unexpected is found and no new negotiations are
needed.
Remaining Deposit Funds
Check your contract and with your lawyer, your remaining
agreed upon deposit funds are most likely due within a short period upon
attorney review being completed. Usually you will provide your lawyer with a
check made out to the seller’s attorney’s trust account to be held there till
closing.
Mortgage Commitment
Once you have completed attorney review you need to contact
the mortgage company you decided on using and get the process going. Your lawyer
should initiate a title search and the mortgage company should order a home
appraisal to be done, This takes time, and you will not get a mortgage
commitment in time unless you contact all parties that you are ready to obtain
the loan. The home appraisal will determine if the agreed upon price for the
property is reasonable and represents market value equity to support the
requested loan amount and at what terms. The title insurance checks things such
as; that there are no other liens on the property, encumbrances such as past due
taxes, and that you would be able to own the property free and clear.
Review of HUD Form
Your lawyer should provide
you with this a few days before your property closing so you know what your
closing costs will actually be. If at all possible, try to get a good faith
estimate of this sooner from your lawyer or some mortgage companies will provide
you with one so you get an idea of what your costs may be.
