You found the home you want to buy, you made an offer, the seller accepted the offer, and you signed on the (contract’s) dotted line. At this pont you are in what's typically called a "Sale Pending" status. So what happens next? While it can be difficult to be patient when all you can think about is when you’ll get those shiny new keys, there are a few more steps to take before you get to walk through your new home’s front door.
Steps in the Home-Buying Process
When you’re in a “Sale Pending” status it’s helpful to set your expectations. This is especially true if you're a first-time homebuyer. You are embarking on an exciting new chapter in your life that inevitably makes it difficult to be patient. Now, however, is the time for patience as there are many things that still can go awry before you close this real estate transaction. But here is the good news: you'll have many visits to the house you are buying to meet with your agent, inspectors, and more.
These are the 9 typical steps in a home-buying process. For all of these next steps, it helps to work closely with your real estate agent and take advantage of his or her knowledge and guidance.
1. Money Step
If you have not done so already, you want to get the money step over with immediately. This is crucial to being able to make more visits to your hopefully soon-to-be new home. This money step is the deposit you make to the seller that shows your good faith intention to buy the home. Your agent may refer to this deposit as earnest money, due diligence money, or the escrow deposit. Making this deposit also gives you the time you’ll need to arrange the mortgage and complete the other steps below. Bear in mind that you and the seller will need to agree to a timeframe when you make the deposit, though you can ask for an extension if needed to complete the remaining steps. Ask your agent for guidance on the best timeframe to set for you.
2. Documents Round-up
Most likely your agent has discussed the list of documents you need to provide to your lender, but typically they will include income and tax-related documents. Work with your lender to be sure you know everything they will need from you. You must gather these documents and provide them to your lender as quickly as possible. Moving fast here is important because getting lender approval can sometimes take a week or more and you want to be able to close on time, right?
3. Set Closing Date
If you are in a “sale pending” status, you and the seller, and your respective agents, will negotiate an agreed-upon closing date. In choosing a closing date, you’ll want to build in enough time to complete the lending process, consider availability of your lawyer (if you need one in your state), and try to find a date that’s close to your expected move-in date. Bear in mind that negotiating the closing date may also mean taking the seller's contingencies into consideration, as they will need to be met before the closing date.
4. Inspection Time
The next big step is getting the home inspection scheduled. You will want to work with your real estate agent to set these dates. Try to schedule the appointment as soon as possible so that if issues arise as a result of the inspection, you’ll have time to address them in negotiations with the seller. Be sure the date you set is a day you can be at the house when the inspector is there. If you have concerns that you’d like the inspector to focus on, it’s a good idea to discuss those things ahead of the scheduled date.
5. Contractor References
Your real estate agent is a great resource for contractors. Now is a good time to get estimates on any changes you might want to make so you can factor those costs into your plans.
6. Appraisal Time
Ask your lender when the home will be appraised—getting this step completed early during the deposit timeframe will allow you to perhaps negotiate a better price if the home doesn't appraise.
7. Negotiate Repairs
When you get the inspection report(s) back, this is your opportunity to negotiate repairs with the seller. You and the seller will work out whether the seller will make the repairs or provide you with a financial concession at closing so that you can pay your contractor to do the repairs.
8. Do a Jig
If all goes accordingly in the previous seven steps, it means your closing date has arrived, and you’ll get those keys. Time to celebrate.
9. Turn on the Lights
One last thing to do before your move-in date arrives is to set up your utilities. The seller’s agent is often the best person to ask about local providers for electricity, gas, water, cable, and internet.