Congratulations! Your offer has been accepted and we are heading into the next phase of the home buying process. I will be here to guide you through the next steps of the home-buying process– I will work hard to help you to understand each step & I will address any of your fears & stress. The following information will serve as an outline of the next steps of this home-buying adventure! Rest assured that I will be with you each step of the way.
Electronically Sign Documents-there’s a lot to sign!
You’ll periodically receive an email with a link to a document that needs to be signed. AuthentiSign is approved as a platform for electronic signatures on legal documents. It will store all of our copies electronically–you can also download any of the documents as a pdf file at any time if you prefer your own digital files or printed copies for your review. I hope that you’ll find this system very easy & convenient to use as there will be a number of documents you’ll need to sign over the next 30-45 days. This isn’t something you have to register for or create an account for–it’s free for my clients. I will talk you through all of the documents but if there is anything that you do not understand please do not hesitate to reach out!
I am here to help!
Please remember that I am always available to chat so feel free to ask any questions that may arise–reach me by email, phone, or text.
Step One: Sign all documents & submit your deposit check(s)
One of the great things about buying real estate in RI is that all of the forms are standardized so all RI real estate agents are accustomed to working from the same docs–as are the real estate attorneys.
Here are the forms you will be signing:
1. Purchase & Sales Agreement (P&S): the contract
This is the RI Association of Realtors approved legal contract for the sale of the property. All of the terms of this agreement were stipulated in the offer that we presented to the seller, the P&S is the binding contract signed by buyer(s) & seller(s) & goes into much more depth. We will go over this document in person.
If you’d like to see a written explanation of each part of the P&S click on this link: Understanding the P&S
2. Disclosure Forms: Seller Sales Disclosures & Lead Disclosures
The five page Sales Disclosure document is required for every real estate transaction in Rhode Island; it is filled out by the seller(s) prior to a property being listed & is available for review prior to a P&S being signed. This document must be filled out by property owners to the best of their knowledge–don’t be surprised if there’s not a lot of info on this document. Similarly, the Lead Disclosure is required for any property built before 1978. This document is required for every real estate transaction in RI; sellers must check ‘known’ or ‘unknown’ depending upon whether or not they’ve had the property tested. Note that it is not uncommon for property owners to leave out a lot of information on the disclosures. It’s great when they’re filled out with all the details that you’d like to know but it’s rare….
3. Mandatory Relationship Disclosure Form
This document discloses the type of business relationship & subsequent responsibilities between agent(s), buyer(s), & seller(s). I represent you as your “Designated Client Representative.”
Send Executed P&S to Lender & Closing Attorney, Schedule Inspections + Appraisal
Once all buyers & sellers have signed the contract we’re onto the next steps. Your mortgage lender will need a copy of the signed contract & a copy of the escrow check(s). I will make sure that these documents are emailed to your lender. The lender does not need the Sales Disclosures Forms. The next steps are to find a real estate attorney (I can help) & schedule your home inspection (I can help with that, too).
1. Email the fully executed contract to your lender
You have been pre-qualified for your loan but that is just a preliminary approval. Your lender will now request a lot of documents (and probably more after that….and then more….and more ad nauseam); signatures, past tax returns, check stubs, etc. If you are self employed please anticipate this process to be especially trying but hang in there, get everything your lender’s team requests turned in quickly & call me if you need help understanding what’s happening or if you’re about to go crazy–I’m your coach, let me help. Hopefully you have chosen a lender to work with who you feel you can call at anytime to clear up any confusion. If you have any trouble with the communication from your lender copy me in on communications so that I’m informed & can determine the best way to assist.
2. You will need a real estate attorney to perform the following services:
- Review the executed contract & any subsequent addendums (additional legal documents that we add to the contract) that we may need & to answer any legal questions that you have
- Research the deed & ensure that the title & deed are without errors or liens, outstanding taxes, or any other problems that would call into question the legal transfer of title of ownership to you
- Secure the title insurance as required by your mortgage company
- Coordinate the closing documents, prorations, & payoffs—the mountains of paperwork that is necessary for you to sign at the closing in order to transfer ownership of the property to you; calculate the prorations (such as taxes, sewer & water fees, etc), calculate mortgage payoffs for sellers and closing funds due for buyers.
- Most closing attorney fees amount to $1200-$1500 & are part of your Closing Costs (and here’s a more in-depth overview of closing costs)
Recommended closing attorney:
Hugh Barry
[email protected]
400 Reservoir Avenue, Suite 1A Providence, RI 02907
(401) 467-0500
3. Schedule a Home Inspection
As per the P&S: the buyer has 10 business days to have any inspections at all (a general Home Inspection includes a visual inspection of all major structural & mechanical elements of the house, a separate provider would have to be scheduled for a lead test, a separate provider for a water test, etc). Here is an example of the report.
This is Important==> buyer(s) can back out of the contract for any reason based upon any findings resulting from an inspection without explanation to the seller. Again, you have 10 business days to contact the seller regarding any inspection findings. Day 1 begins on the date of the last signature on the P&S–weekends & holidays are not counted.
Here is a list of Home Inspectors that I can confidently recommend you use.
- Expect the price of a Structural/Mechanical Inspection to be in the range of $450-$700 depending upon the square footage of the property.
- This may very well be the best money you could possibly spend so please do not skimp on this or downplay its importance!
- Expect that the inspection will take 2-3 hours depending upon the size & condition of the home. I will be with you at the home inspection.
- The inspectors that I recommend have a full report that includes pictures to document any issues or property concerns. This is so important! If you use someone else that I’m not familiar with please MAKE SURE that their report includes pictures. If they do not—use someone else!!
4. The Appraisal
Depending on the situation we may wait until after the home inspection to have the lender schedule the Appraisal or I may request that it is ordered as soon as possible, especially if we are concerned that the value may fall short or is borderline–this is especially common in a “hot” sellers market. In most cases you will need to pay for the appraisal upfront although some lenders may be able to wrap it into your closing costs–this depends on the lender & on the type of loan so you should discuss this with your lender. Appraisals cost anywhere from $500-$700. Your lender will hire the appraisal company. Depending on the market activity it can take anywhere from 7-10 days for an appraisal to be scheduled & another 7-10 days for us to get the report back. We definitely want the appraisal report in hand BEFORE the mortgage commitment deadline so that’s why the timing of the order can be important.
What Happens Next….
We don’t really move into the next phase until the home inspections are complete & we decide to continue to move forward with this property. Once any repair requests or price changes have been negotiated & signed I’ll let your lender know that we’ve finalized any changes to the contract & she/he will order the appraisal of the property. Your loan will move into the final stages & the underwriter will review all of the final documents. The appraisal takes about a week to get turned into the lender once the appraiser has been to the property.
I. Home Owners Insurance
Now that we’re through the home inspection you will need to secure a home owners insurance binder. If you have a current auto insurance provider that you are satisfied with we suggest calling a rep & inquiring about adding a home owners insurance policy. You will need the policy in place before the lender will issue a mortgage commitment letter. You may need to pay for the binder upfront but some lenders may be able to wrap this cost into your closing costs—you’ll need to discuss that with your lender. Single family home policies average around $1200 in RI, it depends on the age of the house, location, & other factors. Multi Family properties range from $2k for two units to $3k+ for three+ units. I definitely recommend that you get at least two quotes–it’s easy to do & it’s best to be able to compare prices. Bundling your auto insurance may give you a better quote but sometimes that’s just a gimmick.
Here are two insurance brokers that can assist you, give them a call or email & get a quote: Insurance Providers
2. The Mortgage Commitment Letter
We will be waiting on the lender to submit the Mortgage Commitment letter by the stated deadline on the P&S. This is a very important deadline & we will stay in contact with the lender to make sure if more time is needed we file the appropriate extension.
3. Clear To Close
Once the commitment letter is issued there are a few additional steps the loan processor takes before she/he sends us the coveted “Clear to close” email. Once we receive this email we remain cautiously optimistic. The closing will be scheduled & the closing documents will be emailed to you–finally you will discover the exact sum that you will need to secure from your bank. We will also schedule the final walk through of the property.
4. Final walk through
I will schedule this to occur the day before the closing or about an hour before the closing–whatever works best for you. The walk through is quick & should only take about 15-20 minutes, it serves to make sure that there are no unexpected surprises before the property is officially yours (leaks, leftover items, missing appliances, etc).
5. The Closing
You will sign a large stack of papers & you will leave with the keys to your new home!
What to bring:
- Valid driver’s license or passport
- A certified bank check in the final amount as determined by your closing attorney (you may not get this final number until the day before–that is not uncommon). Do not bring a personal check for this amount, it will not be accepted.
Final Thoughts….
I would like to thank you again for choosing to work with me! I’m incredibly grateful that I get to help people like you to find the home of your dreams. My commitment to you is that I’m in it for the long haul– I’ll be staying in touch with you & I will always be available to help you long after you’re handed the keys to your new home!