Navigating the real estate process might appear overwhelming, but you don’t have to tackle it solo! We’re here to equip you with the tools and information necessary for a successful closing. Beyond the paperwork signed at the closing table, the true measure of success is how confident our clients feel throughout the entire process.
Behind the Scenes
Did you know that numerous processes are underway behind the scenes of a real estate transaction? While you might not be aware, your lender has a dedicated team handling your loan. Simultaneously, your realtor is collaborating with the lender, the title company, the other party involved (buyer’s or listing agent), appraisers, inspectors, and occasionally contractors, among others. In real estate, adhering to specific contract deadlines is crucial. Let’s delve into these essential timelines and what they signify for you.
Pre-Approvals
Before embarking on home tours, it’s crucial to have a lender selected and obtain a preapproval letter. This step is pivotal in helping buyers understand their purchasing power from the outset. By doing so, you prevent potential disappointments and save valuable time. Knowing your financial parameters ensures you focus on homes within your budget, reducing the risk of broken hearts and mitigating the potential for buyer burnout. This proactive approach not only streamlines the homebuying process but also enhances your confidence, enabling you to make informed decisions and increasing the overall efficiency of your home search. For cash buyers, having proof of funds on hand and providing it to your agent before touring homes is equally important to ensure a smooth and seamless process.
Shopping for a Home
When shopping for a home, it’s crucial to establish a realistic budget and identify your must-haves, such as the number of bedrooms, preferred amenities, and any specific features you desire. Consider your lifestyle and future needs, ensuring the home aligns with both short-term and long-term goals. Pay attention to the condition of the property, looking for signs of maintenance and potential issues. Schedule showings with your agent, ask questions, and take note of how the space resonates with you. Balancing practicality with your personal preferences will guide you in finding a home that not only meets your immediate needs but also aligns with your vision for the future.
Writing an Offer
Upon finding the home you wish to make an offer on, having a lender in place and securing a preapproval letter or proof of funds is paramount. This financial readiness strengthens your offer and demonstrates your seriousness as a buyer. Collaborating with a real estate agent is essential; they will draft the offer, guiding you through crucial elements. This includes discussing the offer price, determining earnest money, selecting a title company, addressing tax prorations, setting inspection timelines, and clarifying closing and occupancy dates. A skilled agent ensures that your offer aligns with your preferences and is presented comprehensively, increasing the likelihood of a successful and favorable outcome in the competitive real estate market.
Earnest Money Contingency (EM)
Earnest money is a type of security deposit in transactions, especially in real estate. It serves as a cash payment backing up your offer, held by a third party. While not mandatory, many sellers prefer offers backed by earnest money, as it demonstrates a buyer’s commitment by introducing an element of financial risk.
Buyers who submit earnest money (EM) signal their sincere intention to complete the transaction. Typically, earnest money is returned to the buyer at the closing table. In some cases, especially when multiple offers are in play, earnest money may become non-refundable. Even in non-refundable situations, if the transaction successfully closes, the earnest money is returned to the buyer. However, should the loan fail to close, the earnest money may be forfeited to the seller, contingent on the reason for the transaction’s non-completion. For instance, if a stated contingency in the contract causes the deal to fall through, the buyer might still be entitled to their earnest money. As these scenarios are case-specific, it’s essential to discuss them with your agent.
When will you have to deliver your earnest money?
The timing for delivering your earnest money is contingent upon the contract’s terms. In our contracts, we usually provide a five-day window for clients to submit their earnest money. While some real estate brokerages may handle these funds, our preference is to have the title company manage them on behalf of our clients. This choice ensures a neutral third party oversees the funds in the real estate transaction.
If the transaction doesn’t close and you’re entitled to an earnest money refund, all parties must sign a release. Once signed with mutual agreement, the earnest money can be released. Usually, you can pick up a check or request mailing.
Title Company
In Ohio, a title company plays a vital role in the homebuying process by conducting a comprehensive title search to ensure a clear ownership history and issuing title insurance to protect the buyer and lender from unforeseen issues. Serving as an escrow agent, the title company manages funds, facilitates the closing process, and ensures proper recording of essential documents with the county recorder’s office. Additionally, the title company addresses any title-related concerns before closing, contributing to a smooth and legally sound real estate transaction. Engaging a reputable title company is crucial for navigating the complexities of property ownership and ensuring a seamless transfer of ownership.
Home Inspections
Consider investing in a home inspection, a buyer’s tool that provides invaluable insights into your future abode. With costs ranging between $300 and $700, this service explores the structural aspects of the home, shedding light on potential repairs. It’s a crucial step in making informed decisions about your home purchase journey.
We strongly advise our buyers to always opt for a home inspection. While there is a cost involved, consider the potential risk of forgoing this crucial step. Spending $500 on an inspection could reveal a $10,000 repair that might otherwise go unnoticed. Regardless of the property, a comprehensive inspection report typically spans 20 pages or more, indicating a thorough examination by your inspection company. Acknowledging that inspectors may overlook something is important despite their efforts. However, the benefits of having an inspection far outweigh the risks of not having one.
Utilities
Before closing, buyers should set up gas, electric, water, and waste services. Initiate this just before closing and schedule activation for move-in day by coordinating with utility providers. This ensures a seamless transition, allowing occupants to move in with all services ready. These steps facilitate a smooth move, ensuring the home is immediately comfortable, providing peace of mind for new homeowners.
Cable & Internet
In the rush of activities surrounding the closing on a new home purchase, it’s crucial not to overlook the importance of actively arranging cable TV and internet services. While prioritizing utilities such as water, gas, and electricity, buyers should proactively contact their preferred cable and internet service providers well in advance. They can schedule installations or transfers to coincide with the day of occupancy, ensuring a seamless transition. Addressing these details ahead of time allows homeowners to settle into their new residence with the convenience and comfort of having all necessary services, including cable TV and internet, readily available.
Movers
Considering a moving company before closing on your new home can bring numerous benefits. Professional movers streamline the relocation process, efficiently handling the heavy lifting and logistics. By securing their services early, you ensure a smoother transition on moving day, avoiding last-minute stress. Additionally, scheduling in advance allows you to choose a convenient date and ensures the availability of your preferred moving company. However, it’s crucial to note that moving services can be costly. To make an informed decision, get several quotes from different companies before finalizing your choice. This proactive approach enhances the overall moving experience, providing you with peace of mind and allowing you to focus on settling into your new home seamlessly.
Closing Day
Closing day in Ohio, a dower state, is a crucial step in the homebuying process with a few essential considerations. It’s imperative to remember that in Ohio, all spouses are required to sign the necessary documents during the closing. Buyers should come prepared with their photo IDs for verification. The majority of closings occur at the title company, facilitating direct communication and resolution of any last-minute concerns with all parties present. However, Ohio also offers alternatives like mail-away closings or the presence of an escrow agent at your location for added flexibility. The dower state status adds a layer of significance to the closing process, reinforcing the importance of adherence to the state’s legal requirements.
Things to Avoid
Leading up to your home closing, it’s crucial to avoid actions that could jeopardize your mortgage approval. Steer clear of obtaining new credit, making substantial purchases like cars or furniture, and changing jobs. These moves can impact your credit score and debt-to-income ratio, signaling concerns for lenders and potentially leading to a loan denial. Maintaining financial stability is key for a seamless home purchase, so it’s wise to postpone significant financial changes until after the closing to ensure a smooth and successful transaction.
*DISCLAIMER We do not endorse any specific company or contractor on our page. We encourage you to interview all potential service providers. The Miami Valley Experience and Streetlight Realty hold no opinions on prices or ratings for services provided by those who appear on our site. This page is simply a directory of service providers.