Getting a contract on a home in this market can be challenging for buyers. Inventory is low and we are in a strong seller’s market, so it might take some time before someone accepts your offer. What happens when you finally get a contract?
- Your earnest money check gets cashed. This is your good faith deposit on the house. In most cases, we recommend that the earnest money should equal about 2% of the home’s value. In this current market, the more earnest money you can put down, the better. You will seem more serious about buying the home than other buyers.
- Home inspections will be done. This is your opportunity to get to know the house better and see if there are any problems you need to deal with. Keep in mind that, since we are in a seller’s market, you might not be able to get the seller to handle every repair. Fortunately, most of the things that come up on the inspection are deferred maintenance issues that really aren’t too difficult to fix. I would say that only 3% of buyers decide to walk away due to inspection results.
- You will apply for a loan. Your lender will ask for all kinds of paperwork. You will feel like you have given them every scrap of information about you and your finances that exists in the world. Make sure you get everything to them as soon as possible so that you can close on time.
- Negotiations. Your agent will guide you through negotiations after the inspection report comes back. Again, don’t expect the seller to budge too much in this market. You may still be able to get them to handle some repairs, though.
- The lender will order an appraisal. The house should be worth at least what you agreed to pay for it. If it’s worth more or less than that, further negotiations may be needed.
- Sync up schedules with the seller. Make sure everything is aligned correctly so that you can close in about 30 to 45 days.
Finally, I’d like to share one piece of advice with you. When you get the contract, be 50% excited. As each step in the transaction progresses, you can be 10% more excited. Then, when you close and the keys exchange hands, you can be 100% excited about your new home.
If you have any questions, give me a call or send me an email. I would be happy to help you!