wonderfully made: The nitty gritty

Friday, July 5, 2013

The nitty gritty

When your offer is accepted on a home, you aren't automatically the new owners. There are a lot of hoops to jump through. For all of those unfamiliar with the process, let me break it down for you...

After the offer is accepted, you have to sign about 20 pages agreeing to all of the terms. Luckily, Greg made it easy on us because he does everything online so we didn't have to meet to sign papers every time something changed (which was about 5 times). 

As soon as both parties are pleased, you enter an "option period". The period typically lasts about 10 days, but the sellers asked for a shorter period of 7 days as part of the negotiations. Basically, we have 7 days to have the inspection completed and get all negotiations settled. When we signed the contract, we put down $100 towards the seller and 1.5% of the purchase price as "earnest money". If something had gone wrong during our option period, we could back out and all we would lose is the $100. If something goes wrong after the option period ends but before we close, there are only a few "outs" and all would cost us our earnest money. 

Almost immediately, we ordered our inspection. That costs about $450 (at least ours did) and takes about 4 hours. You can then turn around and negotiate further based on what the inspection uncovers. I'll talk more about our specific inspection in another post.

Meanwhile, we have to "lock in" our terms with a lender. Once that is done, we have until closing to submit all pertinent information about ourselves. It's extremely thorough, almost insulting! For example, not only do we turn in paycheck stubs and they check our credit, we also have to show two full months of our bank account statements. Will they judge me on how much I spend at Target??

After all of this is squared away and negotiations are reached, an appraisal is ordered. That's another $400. The appraisal is done by a third party to, well, appraise the value of the house. If its under the purchase price, then the lender won't give you a loan above that, and so more negotiations take place, yadda yadda. 

Anyway, we are past the inspection portion and waiting on scheduling the appraisal. I'm told that once we are done with this, we are in the clear and I can start thinking of this house as OURS! 

More updates as we progress! 

*all of this information is paraphrased to the best of my simple knowledge of the subject! 

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