If you think the hardest and most stressful part of buying is finding a lender or a home, think again. From the time your offer is accepted by a seller, there’s a lot going on. You’ll have deadlines to meet and things to do to keep the process moving so you can get to the closing table.
Once the contract is signed, the clock starts ticking.
Take a look at the steps you’ll take as a buyer in a transaction when you buy your home in and around Naples.
First Earnest Money Deposit
Within about three days from the contract acceptance, the first deposit of your earnest money is due and will need to be deposited with a title company or an attorney who will take care of the closing. In Collier County, the buyer decides who will do the closing. In Lee County, the seller chooses. This is because in Collier County, the buyer pays for title insurance and in Lee County, the seller pays. If you choose, you pay.
Buyers usually have 15 days to perform all necessary inspections. There are several that need to be completed:
- Home Inspection - A home inspector performs a visual inspection of the property and checks the main components of the house: electrical, plumbing, HVAC, etc.
- Radon Inspection - Equipment is placed on the property to monitor the level of radon found. Results are available in a couple of days.
- Air Quality/Mold Inspection - Samples of the air in and around the property are collected and sent to a lab for evaluation. A visual inspection is also done to check for mold and fungus growth.
- Termite/Pest Inspection - You don’t want any nasty surprises later.
- Septic Tank Inspection - This only occurs if the property has a septic tank.
- Well Inspection - This only happens if a property has a private well.
Dealing with What Inspections Find
After all the inspections are completed and any problems have been found, as a buyer, you have the opportunity to list what you want the seller to address. This is part of the negotiation process, and it’s important to remember that sellers won’t always agree to make any or all repairs.
Problems found in the inspection can be handled in a few ways:
- The seller may agree to repair specific items.
- The seller can give a credit so the buyer can make the repairs.
- The seller can do a combination of the two.
- The seller can reduce the sales price.
- The seller can refuse to do anything. If they go this route, you can cancel your offer and look for another property.
You have to make your list of repairs and get them to the seller within 5 days after the inspections period. The seller has 10 days to reply. It’s in everyone’s best interest to act quickly.
Final Earnest Money Deposit
Typically, the second (and final) portion of the earnest money deposit is due between 10 and 15 days after the contract has been signed. This date can be negotiated, though.
Mortgage vs. Cash Buyers
If you’re buying with cash, not a lot happens in the process until the walk-through is scheduled. For those buyers who need a mortgage, you’re on a deadline. You have five days from the time your offer is accepted to officially apply for your mortgage. During that process, you’ll submit updated financial information to the lender and wait for a decision from the underwriter. Even if you’ve been pre-approved, you’ll still submit more paperwork before a final decision is made.
Homeowners Associations Approval
If your new home is located in a community or neighborhood with a Homeowners or Condo Association, you’ll need to work on their approval process during this time. There may be forms to complete, fees to pay, and even meetings to attend.
The lender will send an appraiser to evaluate the property. Although you’re paying for this service, as the buyer, this appraiser doesn’t determine the value of the property for you. It’s done as a risk evaluation for the lender. They’re trying to determine if approving the mortgage for this property makes financial sense based on the market conditions, your financial situation as the buyer, and the physical condition of the property. If an appraisal comes back too low, it can feel personal, but it isn’t. A low appraisal can also derail the process, but it is a necessary part of buying a home with a mortgage.
Once your mortgage has been approved, there may be some additional contingencies - paperwork - needed from both you and the seller. A lot of this has to do with making sure there’s a clear title on the property. After the loan is finalized and a closing date is scheduled, it’s time for the walk-through. This is your opportunity to confirm that the condition of the property is still the same as the last time you saw it and to make sure any repairs the seller agreed to do have been completed.
A couple of days, but at least a day before the closing, you’ll be told what the final amount that you need to pay at closing will be. You’ll wire this to the title company to finalize the transaction on closing day.
Finally, the closing day arrives. In Collier County, buyers usually sign their documents separately from the seller. Most of the time, the seller’s paperwork is done a day or more before the official closing date. If you’re paying with cash, you sign a few documents. But if you’ve got a mortgage, you’ll sign a thick stack of loan documents.
These documents are packaged together and emailed to the lender for final approval. Once approved, funding authorization is issued. The transaction is funded and you receive your keys to your new home.
Congratulations! You’re a homeowner now!
From the time you make an offer until you get to the closing table, there’s a lot to do and even more dates to keep up with. Make sure you’re working with an agent who understands this and will help you navigate the process smoothly and efficiently. Contact me today and let's talk about the home of your dreams.