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So, you’ve found your dream home and negotiated the price. Congratulations! But now the real work begins.
Earnest Deposit
First, you’ll need to pay your earnest deposit to the escrow agent within three days of the sales contract being signed by both parties and delivered to the other side. Depending on the value of the home being bought, this could vary between 5-10% of the purchase price.
Inspection Period
Next, depending on the agreed-upon inspection period, ensure your realtor schedules a licensed inspector to check the property’s condition as soon as possible. The clock is ticking! During the inspection period, and if you are under the As-Is sales contract, you can change your mind and back out of the deal without risking your deposit, so the sooner you find out the property’s condition, the better.
A licensed inspector will check for any issues, from structural problems to potential pest infestations. You’ll receive a detailed report, and if there are significant concerns, you may negotiate repairs or credits with the seller, or back out entirely if there is too much work involved.
Appraisal
At the same time, if you’re relying on a mortgage, make sure the appraisal is scheduled promptly. This is required by your lender and will assess the home’s value to ensure it matches the loan amount. If the appraisal comes in lower than the purchase price, you might need to renegotiate with the seller or come up with the difference. Licensed appraisers are in high demand, so the sooner you can schedule this, the better, to avoid any delays or pushback on closing dates.
Finalizing Your Mortgage
While the appraisal is happening, your lender will finalize your mortgage to get loan approval. This involves verifying your financial information and ensuring all paperwork is in order. Stay responsive to any requests from your lender to keep the process moving smoothly. Loan approval typically takes about 30 days, with a 45-day closing. Shorter timeframes can be risky for obtaining loan approval.
Loan Approval and Closing Dates
Your realtor should strive to align the loan approval and closing dates as closely as possible for several reasons:
- Minimize Risk: Reduces the risk of changes in your financial situation.
- Lock-In Interest Rates: Helps you lock in your interest rate for a shorter period, reducing the risk of rate increases.
- Efficient Coordination: Simplifies coordination between all parties involved, including lenders, title companies, and closing agents, streamlining the entire process and reducing chances of miscommunication or delays.
- Buyer’s Convenience: Minimizes the waiting period, reducing stress and allowing you to move into your new home sooner.
- Market Conditions: In a competitive market, a shorter gap between loan approval and closing can make your offer more attractive to sellers, indicating a faster and more certain closing process.
Title Search and Insurance
During this time, the title company will conduct a title search to ensure there are no legal issues with the property, such as unpaid taxes or liens. You’ll also need to secure title insurance to protect against future claims, so make sure to budget for this cost. A good buyer agent will have already given you an estimated settlement of closing costs at the time of contract agreement.
Closing Process
Finally, we reach the closing process. Ensure all funds are wired to the closing agent on the day of closing. Do a final walkthrough on the day of closing before authorizing the closing agent to release funds, as this will be your last opportunity to address any issues before funds are exchanged.
If everything is in order, you’ll review and sign all necessary documents, pay any closing costs detailed on the settlement sheet, and receive the keys to your new home.
Congratulations, you’re now a homeowner in Florida!
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