You have now found your perfect Houston home. What comes next? Earnest money, contracts, and closings oh my!
I had the opportunity to talk to Dale Ross of the Homeselling Team – Keller Williams Signature Realty, looking for helpful property virgin advice on contracts and closings. Dale has 29 years experience as a Realtor, been named a Top Agent in Houston, Top 1% of All Realtors in the U.S. since 1993, and is a Certified Residential Specialist. In addition to his national and state of Texas recognition, he is also named among the Top 20 Re/Max Teams in Houston and Texas.
Houston Family Examiner: Ok, so our Houston first time home buyers have chosen a home that they just can’t live without. How do the tell the seller they are interested?
Dale Ross, Keller Williams Signature Realty: First they will sign, initial and date the Earnest Money Agreement. Up to two deposits will be due at this time, The Earnest Money Deposit and the Termination Option Fee. Both of these checks will be cashed within a few days. Your agent’s office will submit the agreement to the Title Company. Next you should contact your lender and provide them with a copy of the contract and the information regarding the property so that the loan process can begin. After that the desired inspections will be scheduled.
The next thing that happens is the agent will advise the buyer regarding the Termination Option Expiration Date on a resale home. This is the date that the Agreement between you and the seller becomes irrevocable under this clause. New home contracts do not have this option and are final when signed by both parties.
Houston Family Examiner: What should buyers do next?
Dale Ross, Keller Williams Signature Realty: They should meet with their lender and in all supporting documentation. It’s important to note that the sooner you provide these items and any additional items requested to the Lender, the less likely your closing will be delayed.
Houston Family Examiner: What about insurance on the new home?
Dale Ross, Keller Williams Signature Realty: Buyers should contact an Insurance Company to obtain insurance on your home. The Lender requires this information well in advance to prepare closing documents.
Houston Family Examiner: What about if your spouse will be out of town? In our case I was.
Dale Ross, Keller Williams Signature Realty: If you or your spouse will be out of town on the day of the closing, you will need to obtain a Specific Power Attorney. Your agent can help you obtain this.
Houston Family Examiner: What are some other documents “property virgins” should anticipate seeing during this whole process and what do they mean or do?
Dale Ross, Keller Williams Signature Realty: There will be the Title Commitment which will need reviewed and if there are any questions those need to be addressed prior to the closing. There is also the HUD‐1 Settlement Statement from The Title Company. Your agent should review it with you to see that all figures are included and accurate. The original Wood Destroying Insect Report must come to closing, it is a requirement on all government backed loans (FHA and VA).
Houston Family Examiner: How do buyers pay the down payment or any other charges at closing? And what are some other documents they may need to bring with them?
Dale Ross, Keller Williams Signature Realty: You will need to bring a cashiers check made payable to “The Title Company on the contract”. Personal checks and money orders are not accepted. If necessary a small personal check of less than $1,000 may be accepted to make up the difference in figures that are found at closing. Buyers should also bring bring a valid drivers license or valid passport to closing. Once everyone attends the and signs the documents, the documents will be faxed to the Lender for approval. Once “funding” has occurred, the closing is complete and you are the homeowner.
Sounds complicated doesn’t it? It can be, that’s why it is important to have a good agent helping you through the process especially for first time home buyers. Agents can find mistakes made in paperwork and help you through the myriad of details and mountain of documents that you will need to get through to own your first home.
Not scared off yet? Good! Because there is more important information coming up in the next article in this series based on the popular HGTV television show, Property Virgins.