Step Four – From Offer to Closing

Well, you have found your dream home. Congratulations!  Your realtor will prepare a Comparative Market Analysis (Comps) for the home that you have chosen.  This analysis will consider the home's size and location, number of bedrooms, bathrooms, condition of the home, and the price that similar homes have been selling for in the area.  Your realtor will give you advice on what to offer for the purchase of the home.

Items that you will need to consider when writing an offer are as follows:

1. Purchase Price

2. Earnest Money – is a deposit made to a seller that represents a buyer's good faith to buy a home. The earnest money gives the buyer extra time to finance and conduct the title search, property appraisal, and inspections before closing.

3. Closing Date - This is when you, as the buyer, will pay the seller for the home and take possession.

4. Home Inspection – A home inspection is recommended to be conducted by a licensed home inspector. The home inspection gives you the buyer a general overview of the condition of the home. The inspection should include the home's general structure to include the overall foundation, condition of the wood, and roofing system. Mechanical systems, including plumbing, HVAC, and electrical. While the home inspector gives an overall assessment of these items, they will suggest that the buyer have a certified structural engineer or roofer look like items of concern if they suspect an issue. Your realtor will provide you with a list of licensed home inspectors, but you are free to select any licensed inspector you choose.

Once the realtor has the offer written and signed, they will submit the offer to the listing agent or the property's seller.  Most contracts have a time frame in which the seller must reply to the buyer, or the contract is considered null and void.

There will likely be some negotiating over some of the details of the contract.  It is not unusual for the seller to counter back, asking for more money, a shorter or longer closing time.  Your realtor will assist you through this process until you have an executed contract.

Once you have an executed contract, the earnest money check will be deposited into the selling broker's account and held in trust until the day of closing.  Next, you will choose a home inspector.

In Mississippi, we have ten days from the executed contract to complete the inspection process.  As the buyer, you have the right to ask the seller to repair any items that the home inspector finds wrong with the property.  I like to advise the buyer that the inspection is a list of items that need repair or will likely need repair in the future.  A suggestion to buyers is to ask the seller to repair all safety items at a minimum.  Some negotiations happen to complete the inspection process.

Your realtor will forward the contract to your lender shortly after the home inspection.  Expect to spend some more time talking with and documenting lots of items with the lender over the next few weeks. Don't get alarmed or upset; this is a normal part of the process; they are not picking on you! 

The lender is going through its process of loan approval.  The lender will have the closing attorney complete a title search; this is a process of looking at the property's history to verify there are no liens or issues with the ownership that could arise during your ownership.  The bank will also order an appraisal.  The bank wants to verify that the home you are purchasing has a value of at least the home's purchase price and, lastly, underwriting.  Underwriting is the process of approving the loan.

Finally, you will do a final walkthrough of the home about three days before closing.  Final walkthroughs verify that the home is in the same condition as when you made the offer, plus it allows the buyer to confirm that all repairs have been completed before the purchase's closing.

On closing day, make sure that you bring your driver's license to the closing attorney's office along with any funds that may be required to close.