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HOMEBUYERS – You Are Officially Pending, Now What?

The home buying process can be a bit overwhelming, especially if this is your first home purchase.  There are certain time-restrictive deadlines that must be met and many different hands involved to help a transaction move to closing.  Parties include the Buyer of the property and the Seller of the property, your licensed Realtor®, Inspectors, the Title Company and/or Closing Attorney; and, if the Buyer is securing financing, a Lender.

Let’s dive into what you can expect after you sign a contract on a home:

Effective Date:

The “effective date” is the exciting day the contract is signed and delivered to all parties.

Deposits:

A third party holds all the earnest money deposit(s) related to the transaction in an escrow account on behalf of the Buyer and Seller.  Also referred to as the escrow money, the deposit is made in good faith and is submitted either with the offer or due a few days after the effective date.  Refer to your contract as to who is holding the escrow account which will include the company name, address and telephone number.  A second deposit may be due later if these terms are agreed in the contract.

Mortgage Financing:

Preferably before preparing an offer for purchase, you’ve already contacted a mortgage broker, such as Prosperity Home Mortgage, or a bank, and have obtained a pre-approval letter.  Application for a mortgage must be submitted within the time frame noted on the contact.  In Florida, the default is 5 days.  This is also a good time to shop for Homeowner’s Insurance – as this must be in place prior to getting final loan commitment.

Inspections:

There are certain inspections that are recommended, such as a general home inspection, roof, mold inspection, pool and/or seawall.  The inspection results determine if everything in the home is functioning as it should be and to learn what potential issues may arise in the future.  Request a Seller’s Property Disclosure from your Realtor®, as it may be useful to your property inspector.  Upon receipt of the inspection, you may provide written notice to the Seller of any property defects along with your request for repairs.  The contract terms will determine if the Seller is responsible for repairs or if the repairs are negotiable.

Associations:

If the property you are purchasing is a condominium or has a homeowner’s association (HOA), HOA Board approval may be required.  The Buyer is responsible for the fees associated with the application, which varies by community.  It’s recommended that you request a copy of the community association documents to review.  When purchasing a condo in Florida, the Seller is responsible for providing the condo docs and recent financials to the Buyer.  If required, submit the application promptly to ensure no delays in closing.  The Seller will be required to provide an Estoppel Certificate, obtained by the closing agent, to ensure there are no past-due fees or liens due to the association.

Title:

The title company (which, in Florida, may be an attorney) will complete a title search and municipal lien search once the contract is submitted.  This will ensure the parties listed on the contract have full right to sell, that there are no outstanding issues or concerns that may need discussion and resolution.  The title agent will inform you of any issues and you will receive a title commitment letter to review.  To learn more about title insurance visit Florida Title and Guarantee.

Preparing for Closing:

Prior to closing, you will receive a settlement statement from the title company/attorney indicating the final funds needed to close the transaction.  This includes funds towards the purchase price, closing costs, tax perorations, etc. – all consistent with the contract.  You will receive wiring instructions through a secure email portal or similar, and these cleared funds are required in order to close.  Bring your driver’s license or another form of ID to the closing so the documents may be properly notarized.  Protect yourself against wire fraud – be sure to call the closing agent directly to confirm any request to wire funds prior to sending any money!

Remember, as your trusted adviser and REALTOR®, I am with you every step of the way.  Should you need legal or tax advice, I will connect you with local professionals.  I’m here to ensure every deadline is met, give quality recommendations and navigate through any unexpected bumps in the road so your closing is smooth and enjoyable.