Diva Dweller you are almost to the finish line of the Home Buying Process. It has been an adventure. I know you were as stunned as we were when we found that table leg holding up the foundation on that house in Ballard. And who knew so many other folks appreciated mid-century moderns as much as you guys do. But we found the “one” and it is pretty darn awesome. The inspection negotiation is finalized. The title report came back clean – whew.
But what happens now?
The Divas have turned over the final paperwork to escrow, the title company, and most importantly your lender. At this point we have to trust the closing of your home to your lending and escrow teams. Team Diva’s recommended lenders NEVER close late and know how to adjust to last minute issues. It is a golden rule that we require for them to be on our lender list. Below is the breakdown of the final two-to-three weeks of the home buying process in a perfect world.
The Home Stretch of Closing On Your Home
The most important advice we can give you at this time: DO NOT MAKE ANY MAJOR PURCHASES!
You are buying a house. This is a super sensitive time in the process. Lenders and underwriters are looking at you and your finances. I know that you want to get engaged to that nice girlfriend or boyfriend of yours. Just put that engagement ring on hold. Wait until we close.
I get it, you don’t have a ton of time to buy furniture. But don’t use that credit card right now!
Some Final Home-Buying Milestones
- Appraisal of the home by the lender. Big milestone. 80% of the time the appraisal will come back at or above value. But it is those weird 20% of the times that we have to work to resolve. Typically the appraiser will call out work to be completed which we handle with the seller to complete before closing. Or the appraiser will value the house under the purchase price. Then it gets complicated. Typically the seller agrees to reduce the price to the appraisal amount. If they don’t you have the options to pay the difference or leave the contract.
- Home Owner’s Insurance Binder: As soon as we are past the inspection process decide on who is going to be the insurance company you choose to insure your home. If the only thing you own is a bike and have never thought about insurance before we have recommendations. Just get insurance and get the insurance binder to the lender!
- Liquidate Your Down Payment and Closing Costs Funds: I know you have that cash stashed away either with your parents, in your mattress, or some long forgotten 401K plan. Well time to get that cash out. Do not wait. As soon as we know this transaction is going through pull the cash out you need for your down payment and closing costs. Talk to your lender and/or the escrow office on the estimated proceeds to close.
- Final Underwriting: The entire file (your info, the house info, all of the paperwork, etc) is turned over to the underwriter. Legally the lender and real estate pros cannot influence the underwriter. They are the final approver in this process. Do not be surprised if they ask for random items they need for your file. For instance verification of work history, divorce paperwork on an ex you have not talked to in over five years, or an insurance book.
The Weekend Before Closing
The Final Walkthrough on the Home: Typically the weekend before we require all of our buyers to do a walkthrough on the home. There are a couple of reasons for this.
If there is any work conducted by the owner that we need to have reinspected, now is the time to know. Believe it or not, I have had sellers on the other side of the transaction NOT do the work agreed to in the contract. We have also had hot water heaters stop working, refrigerators stop, etc. My favorite is when the seller leaves a bunch a crap in the house as your housewarming gift. It is important we address any issues before closing, and not 48 hours before closing.
The Last Three or Four Days Before Closing
I am telling you now, this phase goes quick and often has weird hiccups. There are so many parties in this process, and the timing is near impossible to predict. We ask all of our Diva Dwellers to be flexible, tell your company that you are signing on a house and will need some time off.
- Docs Released by the Lender: The underwriter approves the loan and the loan documents are released to Escrow. Escrow starts the process of reviewing the documents, scheduling the signing, and preparing all of the pertinent paperwork. You can ask for sample copies of the paperwork in advance from the escrow officer if you want to read the technical bits before you sign.
- HUD Statement Prepared and Sent to the Pertinent Parties: Escrow creates a HUD statement which is also known as the final statement. Who owes what and where. We review it to make sure escrow captured your earnest money and/or closing costs from the seller. The lender reviews and HAS to approve before the packet is moved closing.
- Signing Scheduled with Escrow: Yippee! We can now transfer your funds to escrow for your down payment and closing costs. And the big day has arrived for you to sign all of your documents. We will try our best to work with your work schedule, signing you after hours, sending a notary, or doing whatever it takes to make it work. Just be flexible.
One last note SIGNING AND CLOSING ARE USUALLY NOT ON THE SAME DAY IN WASHINGTON STATE. Yes, I know all of those online tutorials show everyone signing around one big table with lawyers. There is always a set of keys in those falsified real estate moments. Here you typically sign one or two days before closing. The closing is managed by the escrow officer.
Now you get the keys. The most important part. You will also get a little note from us on how to hook up all of your utilities, movers, and whatever else you need to make your new Diva Dwelling a CASTLE.