You've Found Your Dream House — Now What?
You’ve looked at a couple of houses — or, more than likely, quite a few — before you find the one feels different somehow. The moment you walk through the front door, you know that this could be the one.
In a market as competitive as the Hudson Valley, you know that other buyers are considering this house. After some serious discussions and number-crunching, you decide to put in an offer.
Your agent submits your bid to the seller — and then what happens? This is the part that’s a mystery to most first-time home buyers. Every deal is a little different, but here’s what usually happens when you submit a bid in the Hudson Valley.
Submitting an offer
Your real estate agent will prepare an offer sheet that you review and sign. It includes all the details of the offer, including the amount you are putting on the table and your desired closing date. Any contingencies — such as getting a clear title — they are included in the offer sheet.
Your agent will submit the offer sheet, along with a mortgage preapproval letter or proof of funds, to the listing agent. The agent notifies the seller that you are interested in buying their home.
At this point, nothing at all is binding. You are free to withdraw your offer for any reason until the moment you sign the contract. The seller can also decide to accept another buyer’s offer until that point.
Within a day or so, the listing agent will notify you that the seller:
- Accepts your offer as presented. This is the response that you’re hoping for, but the truth is that it rarely happens. There’s usually at least some negotiation involved.
- Submits a counter offer. The seller offers to sell to you for a higher amount. This allow you to revisit what you are willing to pay and possibly present your own counter offer.
- Rejects your offer. This could mean that the seller considers your offer too low or has already accepted another offer. If you really want the property, you can submit a higher bid.
Note that other potential buyers can continue to bid on the property, but the deal becomes binding when you and the seller have signed the contract and you have put down a deposit. That’s why it’s important that both parties sign the contract as soon as possible.
Arranging for an inspection
When your offer is accepted, the first thing you’ll do is hire a home inspector to thoroughly inspect the property inside and out. This should uncover any issues that need to be addressed, from appliances that are not working to problems with the HVAC system to an electrical system that needs to be replaced.
A satisfactory home inspection is almost always a contingency in an offer letter. When you get the results of the inspection, you will decide whether to move forward with your offer. Your agent will walk you through your options if there are major problems that need to be addressed.
Do buyers ever opt to forgo a home inspection? In a competitive housing market, some buyers believe that waiving an inspection will make their offer more attractive to the seller. It’s a risky move because there could be major structural, electrical, or mechanical problems that an inspector could uncover. Your agent will be able to fill you in on the pros and cons.
If the inspector finds serious problems, you have several options:
- Ask the seller to make the repairs. For example, if the roof needs repairs, you can request that the seller make them before the closing.
- Ask the seller to reduce the price. You might ask the seller to reduce the price by the amount it will take for you to make repairs.
- Agree to take the house “as is.” You agree that you will take care of any necessary repairs yourself.
- Withdraw your offer. This might be your only option if the seller declines to make repairs or reduce the price.
Things can move pretty quickly at this point. Make sure to get the inspection done within a week or so of having your offer accepted. The seller’s agent will still be showing the property until a contract is signed. If you wait too long, you run the risk of someone with a higher bid coming along.
Agreeing on the contract
By now, you’ll have hired an attorney to represent you. Your agent will be able to provide you with a list of well-regarded real estate lawyers in the area. We can’t stress enough how important it is to be represented by someone who is familiar with real estate transactions in your part of the Hudson Valley. It will make the process much easier.
If the inspection goes well and you decide to proceed with the deal, the seller’s lawyer will send a draft of the contract to your lawyer. It’s common for there to be many discussions between the lawyers for both sides as they come up with a contract both sides agree on.
Once all the details have been hammered out, you will sign the contract. Then it will be forwarded to the seller for a signature. The contract is now considered to be fully executed.
While the contract is being negotiated, you should contact the company handling your mortgage and provide them with the details. Once they receive the signed contract, they can begin their part of the process. That includes having an appraiser come to the property.
Closing on the property
Once all of the paperwork has been signed, a title search has been completed, and the mortgage has been approved, the seller’s attorney will set a closing date.
This is when things tend to slow down quite a bit. There’s often not much to do at this point besides calling internet providers and utility companies to transfer accounts to your name.
A few days before the closing, your lawyer will tell you what checks you will be required to have and what documents you should bring with you. That way you will have everything you need for the closing to be as smooth as possible.
The day of the closing, you first meet your agent at the property and do a “walkthrough.” This is probably the first time you are seeing the property completely empty. The walkthrough is your chance to make sure everything is in order and that the seller has made any repairs that were agreed to in the contract.
At the closing, usually held in at an attorney’s office, you’ll sign more documents than you can imagine. You may briefly see the actual deed to your property until it is taken by the bank. And before you know it, everything is done. The keys will be handed to you, everyone shakes your hand, and you will be a new homeowner.