PREPARING TO CLOSE

The hardest parts are over. You’ve found the perfect home, negotiated a deal and secured a mortgage, congratulations! You’re in the home stretch, but the keys aren’t yours quite yet. Here are a few important items that need to happen before finalizing everything on the big day.

Inspections
Never skip the inspection! Regardless of how good a home looks at first glance, or how big a hurry you are in to close and not “miss” an opportunity, some homes (even new construction) may have issues that only a professional can spot. Inspections cost between $350-$500 on average depending on square footage. This is money well spent considering the alternative could mean finding out that your home needs a new $10,000 roof or some other big-ticket item. Based on their findings you might need additional inspections as well (i.e., structural, roof, electrical). If repairs are needed, you can ask the seller to make the repair(s) before closing, or negotiate your offer price accordingly.

Insurance
Most lenders require you to purchase Homeowner’s Insurance before closing the deal. Homeowner’s Insurance covers the cost to repair or replace your home and/or belongings if they're damaged by an incident covered in the policy, as well as providing liability insurance if you're held responsible for an accident or injury. Be sure to buy enough home insurance to cover the cost of rebuilding the home if it's destroyed. You might also consider purchasing a Home Warranty that provides for discounted repair and replacement service on items not covered by Homeowner’s Insurance. Depending on your policy, it covers such items include a home’s major components (HVAC, plumbing, electrical systems) and/or major appliances (washers/dryers, refrigerators, etc.)

Negotiation
If you discover flaws during your home inspection, don’t be shy about asking for price reductions. This generally applies to things that are actually broken, not preventative measures. You may also ask the seller to pay some of the closing costs. But keep in mind that lenders may limit the portion of closing costs the seller can pay. Your negotiating power will depend on the local market. It's tougher to drive a hard bargain when there are more buyers than homes for sale.

Final walk-through
The final walkthrough is a general “last look” at the home prior to closing to make sure that nothing major was damaged during the move out process, that all the agreed-upon items are in place, and that all repairs have been completed. Basically, that the home is in the same condition as it was when the offer was made. This is not the time for another inspection, but be sure to test major systems like the HVAC, garage door opener, pool equipment, etc., and if anything is found to be no longer working that was working previously, the homebuyer should immediately mention the issue to the home seller through their agent.

Read ALL documents carefully before signing
Your closing date can be hectic since there are a lot of forms to read / sign, and many of these documents are wordy and confusing. It’s important to understand them before signing because even a small mistake can cost you thousands of dollars over time. A few things to look for are key rates and terms, property taxes, loan pre-payment privileges/penalties, payment frequency, and other fees that could be deducted from the loan amount. Read the fine print regarding renovations, and be prepared with documentation. You can request your loan documents in advance to read at your own pace and address any issues that arise before closing day.

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