Buying a House: Phase 3
Perform Due Diligence & Prepare For Closing
Congratulations! You’re in the home stretch! Now that you’ve found the perfect home for you and have it under contract, it’s time to perform Due Diligence. You’ll want to make sure the home you’re buying is in good condition since it’s probably one of the largest investments you’ll ever make.
Phase 3: Perform Due Diligence & Prepare for Closing
Step 1: Perform Due Diligence
Just because you love a particular property doesn’t mean it’s perfect. We always recommend our clients do a home and termite inspection during their Due Diligence period. The home inspection typically takes 1.5-2.5 hours depending on the size of the home. They will look in every nook and cranny of your home and provide you with a detailed report after the inspection.
Common Things Your Home Inspector Will Evaluate:
- Condition, Age, and Life Expectancy of the Roof
- Adequate Insulation
- General Aesthetics
- Windows & Doors
- Heating & Air
- Grading & Drainage
- Gutters & Downspouts
Pest Inspections or Termite Inspections are performed by a licensed pest control company. In the Savannah area it’s not uncommon to find previous termite damage for historic homes. The inspector is looking for any active infestation of pests such as subterranean termites, wood boring beetles, powder post beetles, rodents, etc. The inspector will provide you with a report noting any areas of active and/or previous infestation.
Any defects that are found by your inspectors can be presented to the Seller in what’s commonly known as a Repair Amendment. Your agent will help negotiate through the requested items.
The Due Diligence period is also a great time to finalize any home insurance quotes. We recommend getting a quote from multiple companies so you can compare rates and coverage. Keep in mind that some areas of Savannah are in flood zones and your lender will require you to have flood insurance.
Step 2: Appraisal
After inspections are complete and any repairs agreed upon, the next step is for the Lender to order the Appraisal. The appraiser’s job is to validate the sales price for the lender. They will visit the property, compare it to neighboring comparable properties, and determine if the sales price matches the determined value. Should your home appraise for a value less than the sales price, you and your agent will review the report and take any steps necessary which could include requesting a reduction in sales price from the Seller.
Step 3: Underwriting
You know the part where the lender really makes sure the “I’s” are dotted and the “T’s” are crossed? This is it. During the underwriting process your lender may request additional documentation or verification. They are making sure you qualify for the loan and that you’ll have the ability to repay. It is important that you NOT do anything to affect your credit during this time. We’re talking don’t buy a new car, don’t have crazy credit card charges, and for heaven’s sake, stay away from the flashing lights of “great deals” on new things.
Step 4: Closing!
You’ve made it! Closing day is in sight! Closings in Georgia typically take place at an attorney’s office. Remember, you selected a closing attorney when you wrote your offer. Closing typically takes about an hour and it’s always best if you’re present for closing. If you’re not able to be present for closing your options could include a mail-away closing or a Power of Attorney. You’ll want to check with your Lender and Closing Attorney to see what your specific options are.
Things to Bring With You to Closing:
- Two forms of photo ID
Be prepared to sign A LOT OF DOCUMENTS. The Buyer always has more documents to sign at a closing than a Seller, especially if you’re getting a loan. Once all the documents are signed and the lender has approved, the house is yours!
Welcome Home! Congratulations, you’ve just purchased your new home!
Buying a House: Phase 2
Find The House & Make An Offer
By this point you’ve met with your Real Estate Agent, narrowed your criteria, and are ready to see some homes! Once you find the right home for you it’s time to make an offer.
Step 1: Find Your Home
Searching for homes is a little like dating: you have a pretty good idea what will make a good match, but you never know exactly when the sparks will fly. As you’re visiting homes in person, keep in mind your wants and needs. The right house for you is the one that meets all of your needs and some of your wants.
Step 2: Make An Offer
You’ve found a home you absolutely love. Now you need to make a compelling offer. There are several things to consider when it’s time to make an offer.
Step 3: Under Contract
Congratulations! You’re Under Contract on your new home! The day you go under contract the clock starts ticking on several important timelines.
Homeowners Insurance: Please contact your insurance company to secure a homeowner’s policy on your new property. Let us know if you need recommendations on local insurance providers.
Protect Your Investment
Now that you’ve made one of the biggest purchases in your life, you’ll want to make sure you protect your investment.
Home Warranty – The standard home warranty is a one-year service contract that protects a resale home buyer against the cost of unexpected repairs or replacement of major systems and appliances that break down due to normal wear and use. Coverage is also available to home sellers during the listing and escrow period to help them keep unforeseen breakdowns from potentially delaying the close of sale.
Homeowners Insurance – Your local insurance provider can also evaluate special coverage items such as wind and hazard (we get the occasional hurricane or tropical storm here in Savannah) as well as Flood Insurance. You could even save money by bundling your home and auto policies.
Preventative Maintenance and Repairs – There’s no calling the landlord when the the AC goes out or the dishwasher breaks. It’s yours now. No worries! We’ve created a list of trusted service providers and update it frequently. Check out our Preferred Vendors list for contacts.