11/09/22

Uncategorized

My offer was accepted! Now when do I get the keys?

First, if you’re reading this article stop and do a happy dance! If your offer was accepted, that is a HUGE deal. My friend, you’re about to start an exciting new chapter in your life. 

Ok, now down to business. 

How long until I get the keys to my new home? 

If you’re taking a mortgage out on your new home, it’ll take between 30-60 days to take ownership of your new property and start moving in. You’ll get your keys on closing day. 

Why does it take so long to get into my new house? 

A lot of things have to happen before you get the keys. Here’s everything that’s going to happen in the next 1-2 months: 

Home inspection 

Home inspections are technically “optional,” but many buyers will opt to include one in their offer. Home inspections will not only help uncover any unknown defects on the property, it may also give you some negotiating power to lower the price or ask for things to be fixed before closing.  It also can give you the opportunity to walk away from your deal if the inspection reveals something seriously unsavory. 

Title search.

Before closing day, a title company will complete a thorough background check on your house’s title. This due diligence is important. The title company is looking to uncover things like:

1. Liens— If a previous owner hasn’t paid their debts, your new house could be part of a repossession lawsuit. This gets messy fast.
2. Competing ownership claims— For example, if a house is part of an unresolved divorce case or if the house was part of a contested inheritance.
3. Easements—The government could have ownership of part of your future property for things like utility lines.

This phase is important, but don’t get to stressed about the potential for a title company to “miss something” in this phase. That’s what title insurance is for.

Mortgage application, underwriting, and loan approval. 

Most buyers secure mortgage pre-approval before they even start house hunting (we recommend it!). Doing this makes the closing process much faster. But a few things still have to happen to switch your status from “pre-approved” to “officially approved”. This step is the responsibility of your mortgage lender, and they will be in touch regularly. 

Appraisal 

Most lenders require an official appraisal to identify the home’s condition before closing and ensure the property is worth what you are paying for it. 

Final walkthrough 

Get together with your real estate agent and walk through the property one last time. This allows you to inspect any repairs the seller has made upon request and ensure there are no surprises before closing day. 

Closing day. 

Pop the champagne! You’re getting your keys on closing day. Paperwork gets signed, money changes hands, and ownership is transferred to y-o-u!

How should I prepare for closing costs?

For buyers in Wisconsin, the seller pays many of the transaction closing costs. You will have some closing costs as a buyer. Most will be associated with your offer contingencies, loan program details, and title and escrow fees. A buyer typically assumes about 2-3% in misc closing costs. Here are some of the things that can go into closing costs:

• Appraisal fees

An appraisal helps to confirm the fair market value of your new home. These fees are usually a couple of hundred dollars. Depending on what you and your lender agree to, this may be paid at the time of closing or before closing.

• Title Closing Fees and Lender’s Policy of Title Insurance

Although minimal, a buyer will typically be responsible for some closing fees relating to title work, including your lender’s policy of title insurance (if you are taking out a loan) and title closing fees.  This will be around $1,000.

• Misc Lender Fees

This can vary depending on your lender and the loan program you are looking to pursue. Chat with your lender about their charges, including admin fees, processing fees, loan origination fees, underwriting fees, etc. A loan origination fee could be .5-1% of your loan amount; this can add up quickly depending on how much you want to borrow.

• Homeowners Insurance

You can usually pay your first year in homeowners insurance at the closing.  Some lenders might require at least a few months to be paid at closing. 

• Escrow Fees

If your lender requires you to escrow for real estate taxes, they may charge a fee to set up an account and need a few months to pay into the account at closing.

• Private mortgage insurance (PMI) 

You may need to pay private mortgage insurance if your down payment is less than 20%. 

• Transfer Fees

If purchasing a condo, you can sometimes be responsible for transfer fees as part of the condo association or move-in/move-out fees.

• Property taxes

You will likely get a credit at the time of closing for property taxes for the seller’s property taxes owned.  But remember that at the end of the year, you will need to pay the tax bill in full, so you will want to save this to apply towards that final tax bill.

The Hub is here to help! 

The Hub team always has your back if you feel intimidated about this process. Feel free to reach out with any thoughts/ questions/ concerns, or even if you’re excited about a new house and want to share the joy with someone.