New Home Buying 101 -Part Three
Home Buying 101 – Part Three
Becoming a Homeowner
In Part 1 & Part 2 of this series, you learned the steps to prepare for buying a home, and tips for new home search. Now the big part – becoming a new homeowner!
This process starts with making an offer and ends with picking up the keys to your new home. Everything in between can be both exciting and anxiety-producing. The more you know about the process, the easier it will be to navigate.
Making an Offer
You’ve spent a long time – maybe even months – looking for your new home. Now it’s time to narrow it down, choose your new home, and make your offer. RM Homes has special paperwork that must be completed as part of the offer paperwork. If you are working with a real estate broker, they will help you complete the necessary paperwork. If you are not working with your own broker, our onsite community sales managers can help you with this process.
Once you make your offer, it may be signed immediately, or it may go into negotiation between you and RM Homes. You should expect to hear back from us within 6 hours of submitting your initial offer. Once the offer is signed by all parties, we refer to that as “signed around” or “mutual agreement” and your new home is officially in contract.
Choose Your Options and Upgrades
Depending on what stage of construction the home has reached at the time you make your offer, you may be in time to select from our interior finish scheme options. If the home is past a particular stage, then the interior materials will already have been selected so that the home can stay on track for the closing schedule. The onsite community sales manager can let you know if selections have already been selected for the home you are interested in.
At this point in the process, you may also be able to select upgrades to your home. RM Homes includes more finishes than many builders, so our list of possible upgrades is not long and varies by community.
One reason to include your upgrades in your offer is so the cost gets wrapped into your mortgage, which prevents you from having an additional cash outlay as you are buying a home. When you include them in your offer, the upgrade finishes will be installed before you close on the home. This is useful for buyers because you will need many of these features before you can live in your home – things like your refrigerator, washer/dryer, backyard fencing and window blinds for example.
Close on your home.
After your offer is accepted, you move into the closing process. If you have traditional mortgage financing, the home could take at least 30 days to close, often a little longer. Another thing to plan for is construction time. When you buy a new home from RM Homes, we work on a detailed construction schedule that allows us to meet the closing schedule most of the time. This can, on rare occasion, be delayed by material deliveries. If this happens, we will be in close contact with your or your broker.
From the time your offer has reached mutual agreement, you have up to three days to submit your earnest money. The earnest money is typically $20,000 and it is part of your eventual closing costs. Your earnest money is paid to and handled by Evergreen Escrow office. The purpose of escrow is to hold all money until the home closes, and to facilitate the actual closing process and signing of your loan documents. Once your earnest money is received on a mutually agreed upon contract, if you back out for any reason other than a contracted contingency, you will likely forfeit your earnest money.
If you have applied for a mortgage on your new home purchase, the mortgage company will order a new home appraisal. You will not need to be present for the appraisal.
Sometimes, appraisals come in lower than the agreed upon purchase price. In that case, if there was a contingency on the appraised value, the purchase price may need to be renegotiated. One benefit to buying a new home is that with frequent sales of the same plan and location, appraisers rarely return a low appraisal so this process is usually seamless.
Some new home buyers wish to hire an independent home inspector prior to closing on the home. If this is your wish, coordinate the home inspection timing with the onsite community sales manager. If your inspection yields any necessary repairs, that list will be submitted to RM Homes for review and response, and then we will make agreed upon repairs prior to your closing.
RM Homes has partnered with a local firm, Cascade Builders Service, to manage our home orientation walk-through and customer care post-closing. Your home orientation will take place approximately one week prior to your home closing. It will typically be scheduled Monday through Friday between 8 a.m. and 4 p.m. You will want to make sure that you are in town and available for this walk-through the week prior to your closing.
At the time of your home orientation, your home will be complete and nearly ready for you to move in. The home orientation is, as it sounds, an overview of the products and systems in your home. You will learn how to operate things like your Nest Learning Thermostat, Deako Smart Switches, and other home technology. You’ll learn the best products to use to clean your home’s hard surfaces. And you will have an opportunity to review the final finished details of your home, ask any questions you may have, and mark anything you see that should be addressed or repaired prior to your closing.
Working with Chicago Title, as part of your closing, RM Homes will provide proof that the property we are selling you is free of liens or other impediments to ownership. This is a standard part of any homebuying process, and it is required by mortgage companies. The costs for title insurance are part of your closing costs.
A few days before the closing of your home, you will need to make sure you are available and in town to meet with the escrow officer to review and sign the closing paperwork in person. This may seem very old school, but there is really no way to do this electronically.
At this time, you will bring necessary I.D. and the remainder of your down payment. This is usually in the form of a cashier’s check made out to the escrow office or a wire transfer will also suffice.
Plan on at least an hour to review and sign the stack of paperwork. This includes your final lending agreement between you and your mortgage company and the final agreement between you and RM Homes. At the time of signing, you will receive paperwork such as your loan estimate, closing disclosure, initial escrow statement, mortgage note, mortgage deed of trust, and certificate of occupancy. Your escrow officer can answer any specific questions you have on any of those documents.
Picking up the Keys!
After 1-2 days of signing all the paperwork, the lender releases your loan to the county for recording. Once recording numbers are received back from the county your closing is final! You or your broker can pick up the house keys from the construction manager and take occupancy of your new home. Congratulations!
Read all three parts of this Home Buying 101 series:
Part one: Getting Ready to Buy
Part two: New Home Search