i discuss phase 4 of the home buying process, the closing phase. i also show off my new intro.
Hello everybody and welcome to another episode of the Reside Daily Bite; I’m your host, David Doucette. Today we’re going to talk about the final phase in the home buying process -Phase 4. As you recall in the earlier bites this week, we talked about Phase 1, the looking phase; Phase 2, the finding phase; Phase 3, the buying phase. And today, Phase 4 is the closing phase -very exciting phase. This is where the work really starts to begin once we have that accepted offer.
So, in the closing phase, the very first thing that’s going to happen is the escrow period opens. Typically, right now here in the LA area, we’re seeing between 30 – 45 day escrows. Probably, this is becoming more common if everything is in order and in a nice, smooth transaction -you still might be able to get in the 30 days.
So, couple of things that are going to happen here once the escrow opens is we’re going to have home inspections. That is where the home inspector will come and spend 2 or 3 hours at the property, going through everything and issue an inspection report, often times, right there on the spot.
After the home inspection, we’re going to start removing contingencies. What a contingency is, it is something that we, as a buyer, need to release or remove before the escrow can close. For example, there’s an appraisal contingency – the property that we’re buying needs to appraise at the purchase price; there’s also a loan contingency -we have to as the buyers need to qualify for the loan. And, there are some other contingencies and that may vary depending on what area of the country you’re in or what state you’re in. So, check in with your realtor to find out what contingencies you need to be concerned with.
Then, once our contingencies are removed, the loan is funded. In the Phase 1, when we get pre-approval for the loan, that’s all it is; it’s a pre-approval. It doesn’t mean the loan is funding; it means if we go through and apply for the loan, we should be able to obtain that loan. This, in the escrow period, is actually when the loan is funded and it can typically happen a few days before the closing of escrow. This is a major milestone to have accomplished -when the loan actually funds.
Then, once that happens, escrow closes and this is when the property will change hands. This is now when (if you remember) you can really POP the CHAMP, as we said in the last one because that’s all the room I had to write for. So, you can pop the champagne here when escrow closes.
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My name is David Doucette, thank you so much for checking out the Reside Daily Bite.