There is so much more to a buyers closing process on a new home than merely going out and looking at houses.
After you have spent weeks or months looking at homes and finally decided on the one that is the perfect fit, it’s time to start thinking about what exactly is involved in the buyers closing process.
The first step after an accepted offer that has been fully executed to a sales contract, is to set up your home inspections.
Typically this should happen before you even begin the mortgage process.
Depending on your state and usual customs, you may or may not have a repair clause, binding the seller to perform certain repairs up to a particular percentage of the purchase price.
Here in Florida, most real estate sales contracts are written “As-Is”, which means the buyer has the right to perform inspections, and based upon those findings, they can decide whether or not to move forward with the sale.
If a buyer decides to move forward following inspections, then the rest of the real work toward completing the buyers closing process will begin.
If you are not paying cash, and will be seeking a loan from a lender, the next step is to submit your loan application.
In your sale contract there is a time frame set forth for obtaining your loan commitment.
A “loan commitment” is the formal order from a lender which provides information about a loan which the lender has agreed to provide.
You will have to submit that to the seller and/or sellers agent within the time frame set forth in the contract.
You will also need to submit necessary documents, such as 2 years tax returns, pay stubs, bank statements, etc., to your lender, so that they can begin the process of approving your loan.
Once the lender is sufficiently satisfied from your documents that they can move forward with you, they will order the appraisal.
The appraisal is a buyer cost, so be prepared to pay for that up front.
While that is going on, your file will more than likely have been submitted to underwriting for an initial review to see what else the lender feels they will need from you.
This is called a list of outstanding conditions. Typical outstanding conditions will be items like the appraisal, binding insurance, employment status, etc.
Once the file leaves the first underwriting review with the outstanding conditions, it will be up to you and your loan processor for the bank, to get the underwriting team the missing items in order for them to issue a “clear to close”
A “Clear to close” is the underwriter’s official statement saying that you have passed all underwriting requirements.
Its now time to celebrate because it means your credit score, debt-to-income ratio, employment history, eligibility, and many other details, have all checked out and they are willing to lend you the money for your new home.
Congratulation! You have completed the buyers closing process and your agent and the title company will work together to set up the day and time of closing!
If you need help purchasing a home in the N. Central Florida area, please allow us to help you from finding your home to the closing table!