You've Written an Offer on a Home: Now What Happens?        

Presentation to the seller:

The next step is presenting your offer to the seller. If you've offered on one of my listings, I'll call the sellers and arrange to meet with them. If not, I'll call the seller's agent and let them know that an offer is forthcoming. Then I'll either FAX or hand-deliver the offer to the agent. If allowed, I'll accompany the agent to the presentation with the seller.

Meanwhile, back at the office, we'll set up a file for your offer. This is where a copy of the offer and all other documents and information are kept in one place for easy reference.

Hopefully, the seller will accept your offer as written. If that's the case, you'll sign acknowledging receipt of his or her signed acceptance.

If the seller makes a counter to your offer, we'll discuss your response and either accept the seller's counter offer or reply with another counter.

Once everyone is in agreement:

Once the price, terms, and contingencies have been agreed upon, all will receive copies of the final agreement with all signatures. A copy will go both to your lender and to the title company. The original will remain in my file.

Beginning the mortgage process:

Once you have an accepted purchase and sale agreement, you'll take a copy to your mortgage lender. He or she will be responsible for ordering the appraisal and will order the Title Policy, if this has not already been done by your agent. This will happen after you have seen the results of the home inspection and have indicated that you are prepared to go forward with the purchase.

Even though you have been pre-approved, after the appraisal and Title Report are completed, your application will now go to the underwriters for final approval.

They will probably take another look at your credit report, to see that nothing has changed. They may also ask for additional documentation from you, such as your bank balances and proof of continued employment. Lenders often ask for "one more thing," so don't be upset if this happens.

This is not the time to change employment, withdraw money from the bank for a large purchase, make significant charges on your credit cards, or purchase any new items on credit. Wait to do any of those things until your loan is finalized.

Inspections

The next step will be to order all required inspections. These are best done before your lender orders the appraisal, just in case the inspector finds problems that cannot be easily repaired, or that are unacceptable to you. I'll give you names of several reputable inspectors to choose from, and will order the inspections on your behalf.

First comes the "Home Inspection," in which an expert goes over everything from the wiring and plumbing, to the foundation, to the roof. You and I are allowed to meet with the inspector and accompany him or her during the inspection, which takes 3 to 4 hours. This affords you the opportunity to ask questions.

Acting on the inspection report:

When the report is completed, the inspector will send us a copy and will speak with you on the phone to discuss the findings. In rare cases the inspector will find something beyond his or her expertise and will recommend calling in yet another inspector. Then you and I will discuss all the findings and I'll help you determine your next step.

If the inspector finds problems that classify as "Major Repairs," your lender may require that they be done before closing. If repairs are minor the choice will be yours.

In either case, I will type a report to the sellers, either indicating that you accept the house as is, or stating the items you wish repaired or replaced. You will sign this document, then I will forward it to the sellers, along with a copy of the inspection report showing the recommended / required repairs.

Note that time is of the essence. You will have a specified number of days in which to respond to the findings of the inspection. If you do not, you signify that you have no objections and are moving forward.

Unless your offer specified that the seller will make needed repairs, he or she will be under no obligation to do so. If the seller declines, you'll have the option of taking responsibility for the repairs or walking away from the agreement. Acceptance of the condition of the house is one of the standard contingencies in a purchase and sale agreement, so if you don't accept, your earnest money will be returned and you'll be under no further obligation.

Other inspections:

We'll also conduct a termite inspection. Although termites are not a common problem in newer Omaha homes, this is a lender requirement. They may be present if a homeowner leaves firewood stacked near the house or uses untreated lumber in landscaping. In older homes with lots of trees they can sometimes be an issue, but are rarely a major problem.

The Title Report:

While all this has been going on, your Title Company will have done a title search prior to preparing a preliminary Title Report. This assures you and your lender that the title is clear and the sellers have the right to sell. It lists every individual or entity with an interest in the property, and the nature of that interest. You and your lender will get copies, and I'll have one for my file as well.

This is an important document, and your lender and I will both read it carefully. Sometimes we do find things that need to be cleared up prior to closing. If that's the case, I'll get busy seeing that it's done.

In most cases, it merely shows any current lienholders who must be paid from the proceeds of the loan before funds are dispersed to the seller. The dispersal is done by the Title company as a part of the closing so that they can be assured that all liens against the property are cleared before they issue the Title Insurance Policy in your name.

This is called title "insurance" because in the event they make a mistake, your financial interests are covered. They'll either take the necessary action to correct it, or reimburse you for any loss resulting from the error. In most cases, the seller will pay for your coverage, and you will pay for the extended policy covering your lender. This is included in your closing costs.

In rare cases, problems exist that cannot be solved, and the Title company will refuse to insure title. If that happens, your lender will not accept the property as collateral for your loan and your purchase agreement will become null and void.

The appraisal:

Once your lender feels confident that you will go forward with the purchase, he or she will order an appraisal and call me to get access to the home. Because the buyer generally pays for the appraisal, lenders wait until they know that no physical and/or title issues will prevent the closing.

Depending upon the appraiser's workload at the time, it could take a week or more for the appraiser to visit the home and another week to get the report to the lender. So don't get nervous when you don't get a report immediately.

On the off-chance that the house does not appraise for the selling price, the seller will usually have the option to sell for the appraised price or to cancel the transaction. You may also have the option to pay cash for the difference between the appraisal and the selling price.

Now you're getting very close to owning your new Omaha home...

Once the appraisal is in - showing a home value at or above your purchase price - your lender will work to finalize your loan and set a closing date.

The final walk-through:

Before closing we'll make another visit to the home to do a final walk-through. This is to make sure that things are the way they were when we wrote the contract. We'll make sure the furnace and air conditioning still work, no windows have been broken, the chandelier is still hanging in the dining room, etc. If you've asked for specific items to be left with the house, we'll make sure they're still there. Usually, everything is fine, but if there's anything amiss we want to catch it now - not after you've signed the closing papers.

Obtain funds for closing:

Your lender will have given you an approximate dollar figure that you'll need to bring to closing. Since those figures change depending upon the day of the month on which you close, the closing agent won't know the exact figure until the final paperwork is drawn. This will typically be within one or two days of closing.

Be prepared to make a last-minute trip to the bank, because you'll need a cashier's check or certified funds for closing. If you can't make it to the bank on that day, or if your funds will be coming from an out-of-town bank, get a check for an amount greater than the estimate and have it made out to you. At closing you can endorse the check to the title company and they will give you back any excess.

Turn on the utilities:

Since you will want utilities on when you move into your new home, be sure to call ahead so that instead of having utilities shut off when the seller discontinues his or her accounts, they will be smoothly transferred to you. You'll want to give each utility the name of the seller, their current account numbers, and the date on which the transfer will take place. I'll provide you with those account numbers and a list of websites and/or Omaha phone numbers for each of the accounts. This, however, is something I cannot do for you, as each utility will want financial information from you.

Note* If you've arranged to let the seller stay in the house for a period after the closing, you should do this a week or so before they move out.

Do remember to call the utilities and let them know you're moving from your previous home!

The closing:

Hopefully, we will have received closing documents ahead of time, so you will have had time to read them and to understand all their provisions. Even so, you should prepare

to spend some time at closing. You'll have a large stack of papers to initial and sign for your mortgage. If you haven't seen the documents prior to closing, you'll need time to read them before signing.

The celebration!

Congratulations! It's now time to relax and savor the moment before beginning the work of unpacking, arranging your furniture, and settling in to your new home.