10-Steps Once Your Offer is Accepted & Under Contract

Earnest money is the buyer’s proof that they "earnestly" want to purchase the home. This step is involved at the beginning of the transaction. It's designed to protect the seller's interests as they take their house off the market.

In Colorado, the earnest money deposit is typically around one percent of the purchase price. There are no standard set amounts for earnest money deposits. This fee will vary between different markets.

Some Realtors will collect earnest money before they submit an offer. Others will coordinate the earnest money drop-off after they receive a signed contract. Whatever your scenario, make sure that the earnest money is delivered on time and in the proper payment form. This information is typically agreed upon and documented in your sales contract.

Once you have an executed sales contract in hand, the clock starts on the inspection period. It’s time to hire a home inspector. Make sure you complete the inspections on time.

Be aware that multiple types of inspectors may be required, depending on the type of home you’re buying. A standard home inspection is the most common type of inspection for real estate. Other types of inspections include radon, pest, septic, sewer, structural, HVAC, meth, and mold inspections.

Discuss all of your inspection options with your real estate agent. Make sure that you have resolved any inspection issues within the time agreed upon in your sales contract.

As soon a homebuyer has an executed sales contract on a home, they need to communicate with their mortgage lender. This step will ensure that the lender has all of the docs to get started on the loan. As soon as a lender receives a sales contract, they start the mortgage process for the transaction.

Once the mortgage process initiates, the lender will start asking for a myriad of paperwork from the homebuyer. Be prepared to provide plenty of documentation throughout the transaction.

Make sure that you get the requested documentation to them ASAP to limit any problems with their timeline. Gathering and organizing all of these documents can quickly become overwhelming. Not providing documents to your lender on time can slow their process down and delay your closing.

Some lenders are not as thorough with regards to keeping everyone updated on the loan process. Make sure that you are checking in with the lender to verify that they are on track. Your Realtor should help you with this, as well.

If a lender does not complete the loan process on time, it may cause a contract breach. Meeting the sales contract's closing date is an important step. A violation of the agreement will allow the seller to terminate the transaction and keep the buyer's earnest money.

If the homebuyer stalls on any requested lender docs, they could be to blame for any delays. Ensure that you avoid this situation by promptly providing any documentation to your mortgage lender as soon as they request it.

This step is handled by the Title Company or law office facilitating the transaction. They will issue a Title Commitment that reviews the property's title history (chain of title). They will also disclose any liens against the property that need to be resolved before closing.

Since the title commitment doesn't typically interfere with the loan, it's one of the most overlooked steps in the process. Title commitments are not important until they reveal a problem. The most common mistake that people make with title commitments is to ignore them.

Be sure to review your title commitment and ask an attorney for advice if you find anything that concerns you. Most title commitments are straightforward and require no additional work on your part. Review the commitment thoroughly before moving on to the next step.

Once you have cleared the Inspection process, let the mortgage lender know that you're past that step. The lender will order a home appraisal to verify that the home’s value is worth the sales contract's loan amount.

Appraisals are an important part of the real estate process. It protects the bank from issuing loans above the actual value of a property.

Poor appraisal processes were one of the causes of the real estate market crash in 2007. Banks were offering bigger loans than the homes were worth. Regulation has since been passed to limit the relationship between mortgage companies and appraisers.

In Colorado, appraisers have ten business days to complete the appraisal, starting from the order date. For this reason, it is crucial to make sure that your lender orders your assessment as soon as possible. The homebuyer will likely be paying for the appraisal. It's best to order the appraisal report after the buyer and seller have reached a satisfactory agreement regarding inspection objections.

The mortgage lender will require the buyer to have a Home Owner's Insurance Policy on the property before closing. The buyer will shop around and choose a homeowner's insurance provider and policy that works best for their home.

Homeowner's insurance providers vary dramatically in pricing and coverage. We recommend getting quotes from no less than three insurance providers. Compare the large national companies with smaller local agencies to get the best results.

Home warranties are also accessible within real estate transactions. Some sellers will provide an allowance for the homebuyer to purchase a home warranty. If you're buying a home warranty, shop around and find the warranty company that best suits your needs. Once you've found the right home warranty provider, let the title company know who you plan to use.

With so many details happening at once, it's easy to forget the home utilities. Some states require the seller to disclose the local utility providers in the Sellers Disclosure. Contact these utility providers immediately to schedule or transferred them into your name.

If you're shopping for a home in a rural area, verify local internet speeds before placing an offer on a home. Many neighborhoods on the edge of town do not offer high-speed internet.

During busy months (typically in Summer), you may want to schedule your utilities at least a week before your closing date. It's wise to set up your utilities as soon as possible before you're ready to move in/out.

Your sales contract will have an agreed-upon closing date. Ensure that someone has contacted the title company in advance to make sure they have a convenient time slot open. Title companies often book up during the busy Summer months. Be sure to schedule this at least a week or two ahead of time.

The busiest day for title companies is on the last Friday of the month. If you're trying to schedule this day, be sure to schedule your closing as early as possible. These time slots tend to fill up quickly.

Many buyers and sellers will attend the closing together, although COVID has changed this for many people. Your Realtor will coordinate this with the other real estate agent involved.

This step is easy but often overlooked until the last minute. Ensure that the title company can accommodate your request on the day and time that you need them.

It is wise for the homebuyer to do a Final Walkthrough before the closing. The purpose of a Final Walkthrough is to verify that repairs are complete. It’s also wise to check that all of the seller's personal belongings are removed. Make sure that the home is fully ready to move in.

The final walkthrough is not a time to renegotiate repair items on the sales contract. It's merely a safeguard to ensure that no significant issues arise that could cause the transaction to terminate. Legal proceedings would likely follow this to mitigate the problems. Minor annoyances like finding burned-out light bulbs shouldn't be a reason for you to delay your closing.

On the day of closing, you'll need to have your approved photo ID and certified funds. If you’re required to bring money, it will be on your closing statement. You will meet at the title company to sign all of the required documentation.

A typical closing usually takes less than an hour. As the buyer, if you're getting a loan, you will be signing the lion's share of the paperwork. Once the documentation is approved, and your lender has funded the transaction, the transaction is complete.