Tips for First-Time Homebuyers | Inspection Period and Closing
So you’ve found a home, had your offer accepted, and are ready to close! But what exactly happens now? Several things must be checked off the list for preparing for closing day. Here are the six main steps you have left before you are ready to close.
Inspection
You want to know the condition of your new home, be prepared, and what to expect. Alabama is a buyer-beware state. It’s your responsibility to do your due diligence. The home inspection might lead to more in-depth inspections of, for example, roof, electrical, and plumbing.
Typical ‘additional inspections’ specified in the contracts you see in Alabama are termite inspection and sewer line/septic tank inspection. There is an agreed-upon inspection period; after that period, you have a certain number of days to request the seller to do repairs.
Home Insurance
You will have an agreed-upon time to shop around for home insurance. When you have found the one you want, you will send the info to your lender, who will coordinate from there. Your lender will require home insurance, and it’s most common to pay for it monthly ‘into escrow’ as a part of your monthly mortgage payment.
Home Warranty
It’s common to ask the seller to pay for one year home warranty or for the buyer to cover this themselves. While the home insurance will cover unexpected events such as fire, theft, or a tree falling on the house, a home warranty will cover the home's systems and appliances such as HVAC, water heater, and appliances.
Appraisal
Your lender will order the appraisal. This third party will inspect the property and give their opinion of its value to make sure the lender is not lending you more money than the property is worth.
Title Search
The preferred title and the closing company will get involved shortly after you are officially under contract. The title company will do a title search to ensure the title is clean, meaning no liens are registered on the property. In other words, you want to ensure no unresolved debts are tied to your new home! The closing company will, together with the agents involved, your lender, you, and the seller, prepare for closing day.
In the days leading up to closing, your lender will send a closing disclosure, and the closing company will send a final settlement statement. You’ll need to bring your closing fees, down payment, etc., via a certified check or wire transfer to your closing day. Make sure to check with the closing attorney to see what they prefer.
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Final Walkthrough
The final walkthrough is one last walkthrough of the property. Typically, this occurs the day before or the day of your closing. If you have not already inspected the status of any repairs you requested, this is a great time to ensure the seller has left the property in an orderly condition. Check the status of any repairs you requested.
The closing process can be confusing but remember - you’re almost there! Throughout the process, ensure you communicate with your REALTOR® and mortgage agent. And if you’re looking for a REALTOR® that will stick with you every step of the way, I’m here to help.
I work hard for my clients, ensuring they get the most bang for their buck. I make sure my clients aren't just updated throughout the process but understand the process too! Working with someone who knows their stuff makes all the difference in your home search. So if you hit a roadblock in your home-buying process, I’ll work hard for you!
