If you’ve been there - done that, this is not the blog article for you. If you haven’t tackled the process of buying and selling in Colorado, please read on.
Rule one: buying and selling real estate will always come with surprises. Real estate brokers like to say, “no deal is alike” – and it’s true. But there is a basic list of hurdles you’ll need to get through in order to get to the closing. For some reason, many brokers assume you already know this. It’s okay to tell them you don’t.
So, you finally find a house. You’ve seen a lot up to now. But this is the one. You’re ready to make an offer. Well, welcome to the club. These days in Boulder there are many offers that come with each home. And if it’s finally the one you like – chances are, others feel the same way. Hopefully you’ve made your offer as clean as possible. Talk to your broker about what a clean offer is and how yours can rise to the top of the pile.
The Accepted Offer:
You’ve waited patiently. The phone rings and your broker explains to you the offer has been accepted. It’s like the loud beep at a swim meet. The race is on. You’ve likely signed all the documents required with the contract – such as various disclosures, etc., and your broker has now delivered the earnest money. The next step is for the listing agent to get it deposited.
Call your inspector NOW. If you don’t have one, ask your broker for a few names. Call them, check pricing and availability. Then book it for as soon as possible. The more time you have to address issues that may come up in an inspection, the easier it is to come to a resolution prior to the inspection resolution deadline. This is key when something needs further inspection by a specific tradesperson or multiple estimates are needed.
Note: When hiring an inspector you are relying on their knowledge of building construction and building code. Experience is the key. A few additional services that individual inspectors may or may not offer include radon detection, sewer scoping and infrared imaging because these services require additional equipment.
The Loan Commitment:
Now you need to start the loan process – for real. Ideally, your mortgage broker has already confirmed the dates on your contract are okay and it’s a race to meet the deadlines. This will be your biggest job. You’ll have to get bank statements, paystubs and anything and everything else they request. Essentially you’ll have to show a paper trail for just about every financial transaction in your accounts. For example, if grandma gave you $10,000 recently, you’ll likely need a letter from her stating that it was not a loan.
There’s typically nothing for you to do here, but you should know what’s happening. Many homes have been bought and sold many times. So it’s important to ensure that the title is clean at closing – meaning there are no other liens, property taxes, special assessments or other items attached to the property that could become an issue for you later. A title company has been enlisted to do the research for you and the seller, and also offers title insurance so that anything they didn’t find will not be your responsibility. Of course, this service comes with costs, so be sure to look at your contract to see what your responsibility will be at closing.
The Walk Through:
The day has come. You are ready to close. Typically, right before you head off to the closing location, you’ll meet your broker at the house for a final walkthrough. This is not an opportunity to find new objections, but a chance to make sure no damage occurred while the sellers moved out. It’s also a good time to make sure garage door openers are accounted for and the house is left according to the contract. Perhaps the house and carpets were to be cleaned, or the big dilapidated shed in the back was to be removed.
Rest your writing arm and bring your favorite pen. When you arrive and the receptionist asks you if you’d like water, take it! You are going to be here a while. The sellers may be across the table, or you may never see them at all. It’s possible they already signed their documents, or they could be in the room next to you. If you have a preference, let your broker know in advance. A large stack of papers will be ready for you to initial and sign – repeatedly. Some documents will be regarding the home and others for your loan. So settle in, listen carefully and be sure to ask your broker about anything you don’t understand.
In the end, we are all hoping for as smooth of a transaction as possible. The more you know, the more prepared you’ll be to make (sometimes hard) decisions along the way. So, ask a lot of questions.