Offer Accepted, Under Contract, Sale Pending, Now What?
Buyer Due Diligence
- Refer to your Buyer Due Diligence form for more information regarding steps to take. There are many steps shown and it is up to the buyer to decide which things need the most attention.
- Home Inspection is paid for and selected by the buyer. Pricing varies depending on what is ordered. Most Inspectors have a base price and add for other tests such as Radon, Meth, Mold, and Geological Conditions.
- If there are issues with the lot a surveyor can be consulted. (Not common.)
- We will work with your choice of Title Companies. We have preferred Title companies that we have worked with and recommend. You may choose your own preferred company. Not many people have preferences, most have no idea what they do.
- Title Companies work to make sure liens are taken care of on the property you are purchasing. There can be many types of liens. Tax liens, mechanic liens, second mortgages, utilities, HOA’s. You would not want to purchase a home and find out later that there is still a lien attached to it, meaning someone may still have a claim to it.
- They will draw up the final paper work and will work with your lender to create the HUD’s. The HUD’s are a synopsis of the costs involved in the transaction between the buyers, sellers, and lenders. They will detail all disbursements in the transaction.
- Settlement often referred to as closing will normally happen at the title company. It is easier to settle at the title company where last minute changes can happen. It is possible to have the escrow officer go to another location.
- Closing occurs when all documents have been signed, funds have been dispersed, and the deed has been recorded.
- The buyer and seller can use their choice of title companies, this creates a split closing in most cases. Sometimes the seller will require the entire transaction be settled by a designated title company. Even in those situations as the buyer is purchasing title insurance (recommended) they may purchase from a title company of their own choice. It is common for HUD to settle at their designated closing agent title company.
- We will send the contract to your lender and will work with them, including follow up with the title companies involved.
- The lender will order the appraisal, they will normally wait to order it until the home inspection is completed and any negotiations have been settled in regards to the due diligence period.
- During the period you are under contract it is a good idea to check with the loan officer before making any purchases, especially any type of purchase including a loan. It is important not to do anything that may adversely affect your credit score or credit worthiness.
- During this period your lender may need additional information from you. It may be bank statements, check stubs, gift letters or employment verification. Please respond quickly to requests from your lender.
- We will work with your home inspector in setting up and helping to gain access if needed to the property. Most inspectors like to go and spend a couple of hours inspecting the home and then inviting the buyer to come and explain their findings. They will normally provide a comprehensive report shortly after the inspection.
- Make sure you specify your concerns and give the inspector a list of tests you may want to have performed. This might include meth tests, radon tests, mold tests, foundation tests just to name a few. Your inspector will have a list of fees involved for each type of testing. Results from testing will take additional time.
- Utilities should be on for the inspection. It can take some time to get this done. At times buyers will need to pay to have the utilities turned on for a testing period, and then there could be a re-winterizing fee charged following the inspection. This is very common in HUD Homes.
- You may do your own inspection if desired or bring your own experts for inspections.
- You are not required to do an inspection at all, but it is highly recommended.
- Your due diligence period is a time you can check out the local schools, churches, medical facilities, city offices, HOA’s, codes and restrictions or CC&R’s, and businesses in the area.
- Test out your commute, public transportation, and local culture.
- Begin change of address campaign. The post office has kits to help with this process. You will need to notify creditors, and in some cases professional licensing entities.
- Set up utility changeover dates. They may need to be flexible, as settlement can be delayed. Some water districts require proof of ownership to sign up. Your final HUD papers (usually 3 pages) can be used for this proof. You won’t have the final HUD’s until after settlement.
- Your lender will require home owners insurance. You will need to supply the name and contact information for your insurance company to your lender. If you are a first time home buyer you may qualify for additional discounts if you insure your home and your vehicles with the same company.
- This is a living document, meaning it continues to evolve. Your comments and suggestions are welcome. We are sure we haven’t covered everything, and unique questions will most likely arise during the under contract, due diligence period.