Congratulations, you`ve found the home of your dreams and you`re ready to put in an offer! If your offer is accepted, you`ll then go under contract for the home. Going under contract is a big step in the home-buying process. Here`s what you need to know about what happens when you go under contract for a house.
1. Earnest Money Deposit: When you go under contract, you`ll need to provide an earnest money deposit. This is essentially a show of good faith that you intend to follow through with the purchase of the home. The amount of the deposit will vary but is typically between 1% and 5% of the purchase price.
2. Home Inspection: After the earnest money deposit is made, you`ll have a set amount of time to conduct a home inspection. The home inspection is important because it allows you to identify any potential issues with the property that you may not have noticed during your initial walk-through. Based on the inspection report, you may request repairs or credits from the seller.
3. Appraisal: Your lender will require an appraisal to ensure that the home is worth the amount of the loan they are providing. The appraisal is conducted by a licensed appraiser and is used to determine the current market value of the property.
4. Title Search: A title search is conducted to ensure that the seller has the legal right to sell the property and that there are no outstanding liens or claims against the property.
5. Final Walk-Through: Prior to closing on the home, you`ll do a final walk-through to ensure that any repairs requested in the home inspection have been completed and that the home is in the same condition as it was when you went under contract.
6. Closing: Once all of the above steps are completed, you`ll be ready to close on the home. This is the final step in the home-buying process and involves signing all of the necessary paperwork to transfer ownership of the property.
Going under contract for a home is an exciting time, but it`s important to understand the steps involved and to work closely with your real estate agent and lender throughout the process. By doing so, you can ensure a smooth and successful home purchase.