My Offer Was Accepted—Now What?

It feels great when you have your offer accepted, but for most home buyers, that’s just the beginning. You’ve still got a lot to accomplish before you can cross the threshold. What’s next? Here’s a quick rundown.

1. Apply for a loan

Unless you’re paying in cash, you’ll need to apply for a mortgage loan (if you’re already pre-approved, good for you). If you’re not pre-approved, meet with at least two or three lenders and compare their loan options. Be prepared to ask questions, and be completely open with the lenders about your finances.

2. Home appraisal and inspection

The next step is getting your home appraised and inspected.

A home inspection tells you if the home has any issues. Inspections aren’t always required, but you should absolutely get one even if you’re not getting a loan. Go over the inspection report in detail with the inspector to make sure you’re familiar with any problems, their severity, and the estimated cost to fix them. Additionally, you may also want to get your home checked for radon and pests, which are additional costs.

If the inspector finds problems, you may be able to get the seller to pay for necessary repairs or lower the price to adjust for the cost.

3. Get your funds ready

Make sure the funds you need for closing and in reserves are both accessible. If you need to pull money from an investment, do it right away. Keep the paperwork for the transaction to show your lender you liquidated funds to get your down payment.

4. Find homeowners insurance

In most cases, buyers are expected to pay for homeowners insurance upfront, before closing. Depending on where you live, you might need extra insurance, like flood coverage. Shop around at several different insurance companies for the best rate. Your lender will need proof of insurance before approving your mortgage. 

5. Final walk-through

You will be allowed to do a final walk-through of your new home 48 hours before closing.

This allows you to make sure any items that should be there, as per your contract, remain. It also lets you check the condition of the home to make sure no extra damages have occurred. If you find anything different from what you agreed upon, you may postpone the closing to give the seller time to fix the problem.

It’s important that you catch every issue during the final walk-through. If you spot them after closing, they’re going to be your problem.

6. Closing

This is the day when you sign the mortgage documents and officially gain ownership of the property. Most likely your Realtor® will be there, as well as the seller, the seller’s Realtor, the closing officer, and perhaps the mortgage broker.

You will need to bring ID and a cashier’s check to pay closing costs, which you will know in advance (and if they look different, don’t be afraid to walk away). Your spouse will also need photo ID. (In some states, spouses are required to attend and sign papers even if they aren’t on the mortgage.) Check with your Realtor about the details of your closing.

Source: realtor.com

Buying a Home With a Friend? 4 Crucial Matters You Should Consider

You are not alone if you are considering buying a home with someone you aren’t married to. The results of a recent survey found that nearly one in three Americans has purchased a home with someone other than their spouse, and that the majority of Americans would consider purchasing a home with a friend, family member, or loved one.

There has been a shift in people’s approach to marriage that may be causing some of these changes. Marriage rates in the U.S. fell to 5.1 per 1,000 people in 2020, from 9.8 per 1,000 people in 1990. In addition, homeownership rates changed due to changing financial realities. According to the National Association of Realtors, the cost of purchasing a home has gone up by 55% since last year.

There are many good reasons why you should consider buying a house with a friend, but there are also several reasons why you should think twice before sharing a mortgage.

1. Put it all in writing first

Kurt Grosse of Realty One Group in Las Vegas recommends putting everything in writing from the beginning. “You want to know how things will work, down to minor details. What if someone wants to rent out their half of their garage or part of the home? Who pays for the upkeep of the property, and is everything split evenly? What happens if a major repair is needed and one party can’t afford to pay?”

An attorney should review your entire written agreement for any mistakes you may have made-and to ensure it is legally binding.

2. Finalize—and stick to—a budget

Prior to beginning your home search in earnest, you should have a budget and a maximum amount you will not exceed.

The budget should also take into account the additional expenses associated with buying a home, such as closing costs, taxes, lawyer fees, utilities, maintenance, etc. Glenn Brunker, president of Ally Home in Detroit, agrees. To avoid conflicts that might result from planned or even unexpected costs, it is ideal to have these costs divided in writing.

3. Establish how the property will be titled

In Tennessee, Theresa Raymond, a broker at Smoky Mountain Realty, says there are two types of co-ownership when you purchase a home with someone. Tenancy in common allows you to divide ownership of the property according to whatever principles make sense to you. Tenancy in common allows you to divide ownership of the property according to whatever principles make sense to you.

But in this kind of agreement, if one party dies, their share does not instantly pass to the other co-owner. Instead, it will become part of their estate, Raymond says.

4. Tough talk: death and exit strategies

Melanie Hartmann, owner of Creo Home Buyers in Maryland, floats several questions you should be asking yourself and each other: “If one person wants to move, will the other person buy them out? Do you ultimately want to rent the house out? Or would you prefer to ultimately sell and split the proceeds?”

Most problems can be avoided with honest conversations and clear contractual agreements that establish who covers what and when, what happens if one person’s financial situation changes and, in the worst of cases, who will inherit the property in the event of one person’s death.