From Offer to Closing: An Insider’s Guide to the Buying Process

Buying a home is a complicated dance with more steps than the tango. As a Realtor®, I’ve found that everyone, even repeat buyers, is more relaxed when they have a good understanding of the process and the number of days–approximately 60–that the whole shebang is likely to take. So here’s my insider’s guide to the buying process, from offer to closing.

Before the countdown toward home ownership begins, you have to warm up with several steps. You need to figure out how much you can afford to spend on a home, get pre-approved with a mortgage professional/loan originator, and find a terrific Realtor® to partner with you in your search. (Note: if you’re purchasing a bank-owned, “short sale” or a court-ordered sale, the time line is usually longer and significantly more complicated than the one I’ve outlined here.)

Key point: Research your loan originator’s background carefully. Financial glitches are the number one reason that home sales stumble or fail. Poll your friends and colleagues about their experiences when they purchased. Verify that the individual is licensed to practice in Massachusetts and check out reliable sources for reviews, such as The Better Business Bureau, Yelp, Angie’s List and others.
Day 1:
Congratulations! You’ve found the home that satisfies 80% of the items on your “must have” list and you’re ready to make an offer.

Meet with your Realtor® or buyer agent and prepare a serious offer that has a good likelihood of being accepted.  Starting out on the right foot is important.  It sets the tone for the transaction. If you’re a serious buyer, your initial offer has to engage, not alienate the seller.  Keep it simple.

You’ll be attaching an “earnest deposit” check to your offer–in my market area, the usual amount is $1,000.  A personal check is usually fine.  This check will be deposited once you and the seller have agreed to and signed the final offer.

Key point: If anyone else is making an offer on the property, work with your buyer agent to present an offer that is high enough to help you avoid a bidding war.
Day 3:
You and the seller agree on price, inspection, loan commitment and closing dates, and which appliances are included and which chandeliers are not. ASAP, see a signed copy (electronic or hard) of the final offer and review it carefully. Your $1,000 check is now deposited into the escrow account of the listing office.

Key point: Until your offer is accepted IN WRITING, the seller has the right to negotiate and accept any other offer, regardless of what you have been told verbally.

Book your home inspection, if you choose to have one (and most people do), with a reputable, experienced, competitively-priced company. Again, talk with folks around you and listen carefully to their stories.  An overly-alarmist inspector can turn you away from the home that’s right for you. Conversely, a slip-shod inspector can OK a home that might cause you misery down the road.

Day 5:
Hire an attorney. Most of my clients wait until after the home inspection to actually engage a lawyer.  Go with an experienced attorney whose practice includes a good amount of real estate.  Again, poll your friends, talk on the phone with at least two attorneys, and choose one with whom you feel good chemistry. This person will be by your side until you meet at the closing table, so be sure you have confidence in and good communication with him or her.

Key point: If you choose to be represented by the attorney who will also be representing the bank at the closing (an option that your mortgage professional might propose), vet her carefully as her loyalty will be split between you and the bank through which you’re getting your loan.
Day 10:
You’ve had the home inspected and it went well. The seller has agreed to complete a couple of small repairs prior to your closing date. Contact your attorney and put her in touch with your buyer agent, who will connect her with the attorney on the seller side. The attorneys will negotiate a Purchase and Sale Agreement (P&S) acceptable to both parties.
Day 13:
All terms in the P&S are acceptable to you and the seller. Write a check for (in my marketplace) 5% of the purchase price, less the $1,000 you paid when you made your offer, and bring it with you when you meet with your buyer agent to sign the P&S.

Your agent will transmit the Agreement to the seller’s agent immediately, along with your check, and return a copy to you once the seller has signed it.

Key point: This signing can be done electronically, but the listing office must receive and deposit the check to complete this step of the process.
Day 14 (or earlier):
Meet with your loan originator and complete your mortgage application.  If you’re a first-time homeowner, allow a couple of hours for this meeting.

Key point: Don’t leave anything out of your conversation with the loan originator and feel free to ask him any questions you wish. By law, he must hold all information you share with him confidential. Let him–not you–decide which aspects of your financial picture are relevant to your ability to qualify and purchase.
Days 14-20:
The bank receives your mortgage application and starts the approval process.  An appraiser is hired to visit the property and ascertain that the price you’re paying is in line with other values in the area. Delays in the appraisal process are common reasons for loan commitments being delayed. Appraisals are usually scheduled within a few days of your mortgage application being submitted to the bank. Once they visit the home, depending on their workload, appraisers generally get their paperwork to the bank within a week at the most.
Days 20-45:
The mortgage processing department at the bank reviews the appraisal, contacts you if any additional paperwork is needed (could be a W-2 form, paycheck stubs, tax forms, rent receipts, etc.) and, with a little bit of luck, your loan is approved within the time frame set forth in your Offer to Purchase.

Key point: A few days prior to your commitment date, talk with your loan officer or have your buyer agent do so.  If an extension of time is needed, get it in writing and get the seller’s signature on it. If you fail to do so and do not receive your commitment by the date on your Offer to Purchase, it is assumed by the seller that you’ve received your loan and are ready to proceed to closing.
Day 45:
You receive your Loan Commitment letter from the bank, detailing the terms of your loan. If you have even the slightest question, review it carefully with your loan officer, and let your buyer agent know you’ve received your commitment. Then jump up and down and hug your partner and/or your dog, or even your cat.

Occasionally, the seller asks to see a copy of the Commitment letter. If you’re willing to do so, send only the front page (via your buyer agent) and block out any personal financial information you do not wish to share. In these post-mortgage-market-meltdown times, sellers and sellers’ agents are asking for proof of commitment more often.  Don’t take it personally–remember: this is business.

Day 50:
Contractor visit (optional, of course–most P&S Agreements allow up to three of these). Your kitchen counter person needs to get into the property to measure. Your buyer agent contacts the seller agent and the visit is arranged for a mutually agreeable time. If you can’t be there, your agent should be glad to meet the contractor.
Day 59:
Final walk-through. You’re closing tomorrow!!! Arrange with your buyer agent and the seller’s agent to go through your future home once the seller has removed all of their stuff.  On this visit, you’re evaluating the condition of the property compared to how it looked the last time you saw it: whether the heating system works, if the water is running and heating up as it should, if the appliances and other items that were agreed upon in the P&S are indeed present, and whether the repairs mentioned in the P&S have been made.

Key point: Sellers frequently don’t have all of their stuff out of the house at the final walk-through. When this occurs, a cash “holdback” from the seller’s proceeds, decided by the attorneys, is the most common procedure to insure that, once their stuff is out, the house will be in good condition.

When you’ve completed your FINAL final walk-through (after you’ve gotten the keys), a simple call or text message to your buyer agent or attorney, who will then contact the closing attorney, is sufficient to give the “all clear.” In the rare instance where there’s a defect in the property that becomes apparent only after the sellers have completely vacated, that cash holdback is used for or contributed to the correction of the defect.

Day 60:
Iron that one button-down shirt you still own and show up at the closing. Many times we close at the office of the bank attorney, or at the Registry of Deeds. Wherever you meet, have your signing arm in good shape, because there’s a small mountain of paper for you to sign and pass around (thus the term “passing” that is sometimes used instead of “closing”). As the buyer, you have a lot more paperwork than does the seller, so don’t be alarmed if the seller, or their attorney, doesn’t show up until you’re almost done with your stack of documents.

Once you’ve signed yourself into a happy stupor, the closing attorney or a “runner” will make sure your transaction gets recorded at the Registry of Deeds.  Technically, the property isn’t really yours until those papers are recorded. When the key is placed into your hand at the end of the closing, however, you can pretty much call yourself a homeowner and head over to your new place.

Key point: The time line presented here is typical based on many years of experience with real estate transactions.  As human beings are involved in every sale, there are myriad combinations of pieces that make up the puzzle.

Remain relaxed and positive; choose your team carefully; don’t forget that purchasing a home is a business transaction and one in which emotions can run high.  If you keep your eyes on the big picture–the many years of happiness you will have in your new place–your buying process will be successful, not stress-full!