contract is signed -- now what?

Congratulations, you are on your way to owning your very own home! Follow these suggestions (and your Realtor's advice) so that the purchase of your home will go smoothly!

In the Louisville, KY and surrounding areas, the transfer of a home from one owner to another takes place at a "real estate closing", or simply a "closing".  It's at this meeting that the sale of the home will "close", and ownership will be transferred to you!  There are a number of factors that have to be considered between "contract" and "closing" (this is when the real work begins for your Realtor and team).

Your Mortgage Loan

You will have to quickly finalize the lender you will be using, and the REAL work of approving your loan will begin.  You should understand that lenders have to verify everyting you have told them without any doubt - income, employment, other debts, source of down payment and much, much more.  You will think they're asking far too many questions or that certain things aren't "their business".  However, they will be doing what they have to do to process and approve your loan.  Many lenders sell loans to the financial markets, and these loans must be exhaustively documented.  Also, you should ask yourself "If I were going to loan Bob a few hundred thousand dollars, how careful would I be?"  Pretty careful, probably!

If you're considering making any major purchases or taking on ANY additional debt while you're under contract to buy a home, you should check with your lender.  It's possible that such purchases could reduce your credit score or affect your financial "ratios" in a way that would impede (or prevent) your home purchase.  Also, don't move large amounts of money, etc. without talking to your lender.

Earnest Money Deposit

By Kentucky law, your earnest money deposit check will be cashed and deposite into the real estate company's escrow account. Assuming the sale goes through, this money will be applied to the purchase price of the home. The purchase contract used in and around Louisville gives you a few options to cancel the sale if you feel you should not (or can't) proceed.  However, if you "default" on your contract, your earnest money can be forfeited to the Seller.

Home Inspections

Your purchsase contract will stipulate the number of days you will have to do all inspections on the home you're buying, and how repairs will be negotiated if required.  This duty is time-critical, and your agent will assist you with scheduling inspections and negotiating any repairs with the Seller. If you find that the condition of the home is unacceptable or the Seller will not make requested repairs, you can cancel the purchase contract with no financial penalties (other than the cost of inspections you may have already completed).

Other Steps During the Contract-to-Closing Period

1. Time-Critical Tasks.  Each contract is different, but most include certain tasks that must be completed in a timely fashion to meet your obligations.  If you choose us as your agents, we will ensure that each of these tasks are completed as needed, or when necessary, negotiate any delays. Don't worry -- we do these things every day and use systems to track our responsibilties.
2. Financing contingency: Once the contract is signed, you have a period of time to secure funding. If, for any reason, you are unable to secure funding during the period of time granted to you by the contract, you have the option to cancel the purchase.
3. A requirement that the seller must provide marketable title. In Kentucky, you and your lender will agree on a title company which will handle all document preparation and will actually "close"  your sale.  The title company will perform a "title search", which examines all legal records to see if anyone else might have a claim to the home you're buying or the land under it.  For instance, an unpaid bill from a roofer could result in a "lien" against the property which must be cleared before the property is transferred to you.  Your Realtor and title company will help you work through any issues which might arise -- usually, none do!
4. Secure homeowner's insurance. This will be required before you can close the sale, in most cases.  We can refer you to several good insurance companies, but you should "shop" as soon as your inspections are completed and you know you will be moving ahead with the purchase.  The title company will need a statement of coverage and the the first year's premium before you can close, if you're using a mortgage.
5. Contact local utility companies to schedule to have service turned on when you close the sale.  In most cases, the utility companies will simply read their meters and transfer billing to you on the date you close.
6. Schedule the final walk-through inspection. At this time, you should make sure that the property is exactly as the contract says it should be. What you thought to be a "permanently attached" chandelier that would come with the property might have been removed by the seller and replaced with a different fixture entirely.  Also, you want to verify that any requested repairs have been completed.  If you requested that appliances or personal property remain, be certain they are still there!
You've made it! Once the sale has closed, you're the proud owner of a new home. Congratulations!
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