There’s a lot to keep in mind when buying a new house, and closing a deal can be just as much work as finding one. Here’s what every buyer needs to know once your offer has been accepted and you’re ready to seal the deal.
If you’re ready to buy a new home, you have to be ready to work for it. Going from house hunting to house warming takes weeks of searching, vetting, bidding, negotiating, applying, and signing — and that’s just step one. Once you’ve found the perfect place and agreed to a sale, you get 30 days to clear your contingencies, do your due diligence, and officially close the deal.
Sound daunting? It should! This is one of the biggest purchases you’ll ever make — but the good news is you don’t have to go at it alone. Clever can help: we partner with top-performing real estate agents all over the country to connect you with the best local agent to help you navigate your purchase.
Clever Partner Agents are no different than traditional buyer’s agents: experienced professionals who can take you through the entire home-buying process, right up until closing day. But more than that, you may qualify for Clever Cash Back, which puts up to 0.5% of the purchase price right back in your hands, depending on the state you're in and your home's value.
But that can’t happen until the deal goes through. Here are the four things you need to know as a buyer before closing on a house:
#1. Make Sure Your Mortgage Is Approved
You may have been pre-approved for a mortgage already, but that’s not quite the same as being actually approved. Your lender will keep a close eye on your finances right up until the deal closes.
What they’re looking for, in a word, is consistency.
That means you want to keep your financial situation as steady as possible during the closing process. Keep your cash reserves constant by avoiding large transfers, deposits, or withdrawals from your account. A reduction in your assets can trigger a reexamination of your financial health, and a possible reevaluation of your mortgage.
For the same reason, avoid switching employment (affecting your income) and signing up for new credit cards (changing your debt ratio).
#2. Get a Home Appraisal and Inspection
A home appraisal involves a professional third party hired by your mortgage lender. This individual will assess the fair market value of your soon-to-be house and make sure it matches the sales price. This value is based on the sale value of comparable homes, neighborhood features, and other factors.
Importantly, the value of your mortgage is based on this appraised value — not the value you’ve agreed to pay. If a home’s sales price is a lot higher than its appraised cost, that’s a warning sign that you’re about to overpay. You can choose to cover this extra cost yourself or cancel the deal and reclaim your earnest deposit.
A home inspection is similarly judicious. For a few hundred dollars, a professional of your choosing will examine the house and make sure it’s up to par. If there are any problems, you have the opportunity to demand them fixed before following through with the sale.
#3. Perform a Final Walkthrough
A final walkthrough takes place the day before closing after all other contingencies have cleared. This is your chance to make one final examination of the property before you buy it.
Unless another arrangement has been made, the house should be empty, clean, and habitable. All necessary repairs cited in your home inspection should have been made — and if not, you need to let your agent know immediately.
It’s your responsibility now to check every structure, outlet, fixture, and feature you can see to ensure that nothing is out of place. If it is, this is your last chance to postpone the deal.
#4. Bring the Right Papers to the Table
Having done all your due diligence, it’s time to bring this deal home — literally. On closing day, you’ll be meeting with your lender, the seller, your respective real estate agents, lawyers, and a title company representative. Here’s what you need to have at that table to make sure the signing process goes smoothly:
- A government-issued photo ID matching the name on your property title and mortgage
- A Closing Disclosure
- A copy of your contract with the seller
- Proof of homeowners insurance
- Proof of title insurance
- A down payment (generally a cashier’s check or wire transfer)
- A checkbook to cover smaller fees and additional closing costs
...and lastly, a bottle of champagne to celebrate your new purchase!
Following this guide will help you successfully close on a house, but it’s an even better idea to partner with a real estate agent who’s been through the process hundreds of times. Preparedness, hard work, and expertise are the keys to closing the deal and getting in your new home without a hitch.