In part one, we looked at how to find your dream house. Now that your bid has been accepted, it’s time to find a good inspector. Whether you get recommendations from your friends or your Realtor, make sure your inspector is a licensed Home Inspector by the State of Illinois. Don’t be afraid to interview an inspector. Ask about their methods, tools and experience level. A thorough inspection can take anywhere from two to four hours and it’s critical that you are present, along with your Realtor. The inspection should include a thorough review of plumbing, electrical system, appliances, heating and air conditioning systems, and the roof. Checking the attic for mold and the basement for prior flooding or leaks is also important. The inspector should look for evidence of pests or other unwelcome visitors which could mean significant damage to the house. Checking radon levels and the presence of other environmental issues should also be included for your family’s health. Don’t make your decision on cost alone. Paying an extra $100 for a great inspection could save you tens of thousands in repairs down the road. Here’s an article on finding a great home inspector.
Once your home inspection is finished, your inspector will provide you with a written report, sometimes several pages long. At this point, it is common to hire a Real Estate Attorney to guide you through the post-contract period including the inspection period, contract review and review of the closing documents. An attorney can help you carefully review the inspection report to determine if there are areas that need to be addressed. Issues like mold in the attic or a faulty furnace might require further discussion with the seller and can potentially lead to a sales price adjustment, concessions from the seller or for the seller to arrange for items to be fixed.
While you are getting the inspection done, your bank should be processing your loan. You will have specific timelines to meet during this process. Stay in touch with your real estate team to make sure you are “hitting your marks”. Your mortgage broker will likely ask for many pieces of documentation. Speed in getting those papers together will be important to keep your paperwork moving through the pipeline. Your bank will also send an appraiser to the home to determine the value of the property. The bank will require that the appraisal value matches the purchase price. If the property is appraised lower than the agreed sale price, you will have some decisions to make. You can potentially renegotiate the sales price, come up with a bigger down payment to make up the difference or cancel the deal. Your attorney and Realtor can guide you through that process. If your appraisal comes in at or above the sales price, then you can proceed with the next steps in the process.
As you approach your closing date, you’ll be waiting for a “clear to close” notice from your lender. This means that your application, the appraisal and all other items have been approved and you can proceed with the closing. During the week or two leading up to closing, you’ll have some items to address. Don’t forget to switch utilities for the date you’ll receive possession (normally the close date), contact the USPS to change your address, and finally, start packing. You will need to have your Realtor schedule a “final walk-through” of the property prior to closing. At the walk-through, you’ll make sure the house was properly vacated, any items required to be fixed during the inspection period are complete and that the home has not been damaged and is in “broom-clean” condition. The closing normally takes place at a title company. We suggest taking at least half of a day off to focus on the closing. Your attorney should review all the closing documents with you. Once you’ve reviewed and signed all the closing documents, you’ll be a homeowner! Here is an article with other things to think about including changing the locks, necessary repairs and painting, as well as, checking out important areas like electrical boxes and water shut-off valves.