7 Things to Do Before Closing on a House
Landing a deal on your dream home after days or weeks of searching is not the final step to homeownership, because you still have a lot to do before you finally cross the finish line. Many people don’t know that there are things to do before closing on a house, such as getting the house appraised, applying for a loan, scheduling a home inspection, and completing essential paperwork. Here is a list of seven key things to do before closing on a house that you should follow to ensure you close the deal on time.
7-Step Checklist for Closing on a House
Get a Home Inspection
You should schedule an inspection so that any costly faults in the house can be found before you move in. In case the home inspector finds structural problems or problems with some essential house fixtures, you can negotiate with the seller to fix them. You may be able to back out of your purchase penalty-free if the inspector finds serious problems. A home inspector will also inspect things in the exterior of the home such as the roof, garage or carport, exterior walls, and more. Getting a home inspection is critical to ensuring no terrible surprises about the quality of the home you have purchased.
Get a Home Appraisal
A home appraisal is different from an inspection because an appraiser evaluates the fair market of the home. You can back out of a deal without forfeiting your deposit if the home’s appraised value is less than the sales price and the seller refuses to lower the price. Sometimes completing this step in the checklist for closing on a house can result in the seller reducing the price, which will lead to you saving a lot of money.
Get a Loan
Buyers that are already pre-approved can go ahead and apply for a mortgage loan. But even if you have a pre-approval, there are still things you still need to do to get the final approval. You will need documentation such as income statements, identification, a copy of the contract, insurance information, and more. If you do not have a pre-approval, you should start comparing rates from different mortgage lenders, and then pick the best loan.
Pay Closing Fees
Closing fees are paid to the service providers that help facilitate the transaction. Buyers are expected to pay 2% to 5% of the purchase price in closing costs. For example, you pay from $6,000 to $15,000 in closing costs if the home’s purchase price is $300,000.
Buy Homeowner’s Insurance
One of the documents you will be required to present when you head to the closing table is proof of homeowner’s insurance. Homeowner’s insurance helps you pay for home repairs, replacement, or rebuilding if there are damaged or destroyed items in your home. This insurance also covers accidents that may occur in your new home.
Perform a Final Walkthrough
A final walkthrough is one of the final steps to do on your checklist for closing on a house. If you hired an experienced real estate agent profiled on Homes & Land, that agent is likely to schedule your final walkthrough of the home the day before closing. A final walkthrough allows you to ensure that the current condition of the home matches with the original agreed-upon state as shown in the contract. You can take this opportunity to test major appliances and fixtures in the home.
Sign on the Dotted Line
Finally, on the day of signing the mortgage documents, bring your ID and cashier’s check which you will use to pay the closing costs. After signing, you’re the proud new owner of your home! Congratulations!
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