Louisville Kentucky Real Estate

You are on your way to owning your own home! There will many decisions to make but we have setup everything you need.  Below you will find steps that you can expect to go through during the contract to close process. 

#1 - You will write a check for the earnest money deposit on your new home.  This deposit lets the seller know you are serious about purchasing their home.  Once your contingencies are finalized, at closing this money will apply toward your down payment. The earnest money will be deposited into one of the real estate brokers' accounts that was agreed upon in the contract between you and the seller.  Then the closing attorney will act as an independent, neutral third party that will collect all required funds and documents while coordinating much of the activity that goes on during this contract to close period. Don't be caught off guard!  Make sure that there are sufficient funds in your account to cover this check.

#2 - The contract to close period is typically 30-45 days.  In some instances there are longer or shorter close times. During this contract to close time items specified in the contract must be completed satisfactorily.  Every contract is different, but the three most common contingencies in a contract are:

A. Inspection contingency: It is not required for you to get inspections. Although it is highly recommended!  Spending a few hundred dollars is well worth the peace of mind.  Inspectors will be able to identify items that may be dangerous or costly.  You should have inspections scheduled immediately after the contract is signed!  After you get the inspections, you can decide to back out of the contract based on ispections items of major concern, ask the seller to repair them or request the seller to lower their price so you can fix them yourself.  If you decide to purchase "as is" you will not be able to negotiate concessions.  However, if properly written in the contract you can back out of the purchase.  You can choose any type of inspection you like.  Typical inspections include a general and pest inspection.  You can take that further and hire electricians, HVAC professional, a radon test, environmental tests and more.  The bottom line is that you need to hire all the professionals you want to make sure your investment is secure.  
B. Financing contingency: You were probably pre-approved before your offer was accepted.  Even if you were not, typically you will have a few days after the contract was accepted to apply for your loan.  The financing contingincy outlines in the contract what type of loan you are going to get, how much you are putting down and what rate you were quoted.  If you are unable to secure funding within the contract timeframe you can ask the seller for an extension.  However, they do not have to allow you more time.  To make the process smoother and negotiations of an offer easier, get pre-approved.  Also, take time to get the information gathered the financial institution will need to process your loan.  If you do not know what they'll need, just ask them and they will be happy to let you know.         

C. Appraisal contingency: If you are obtaining financing, the lender will require an appraisal on the property you are under contract to purchase.  This protects their financial interest as well as yours.  The appraisal will show you market value of the property.  As required by financing, the home must appraise for the purchase price of the home.  If the appraisal comes in lower than the what you offered, the lender will not provide financing unless the seller lowers the purchase price to the appraised amount of you make up the difference.  If you thnk the appraisal should have been higher, you can request to get a review.  Bottom line is, if the home does not appraise, the seller will not reduce and you do not want to make up the difference, you have the opportunity to cancel the purchase. 

#3 - You will need to acquire homeowner's insurance.  If you are obtaining financing, this is required.  If you are paying cash, you do not have to get homeowner's insurance but you will probably want to have it anyway to protect your investment.  Call to shop rates.  Many times you can get a reduced rate if you combine your auto.  Also, spend time speaking with insurance professionals about the best options for you and the coverage that will provide you.  

#4-You will have to pay for a title search and the lender's title insurance.  These items are typical and included in your closing costs.  The title search is done to determine if there are any liens or claims to the property.  If there are items found, the seller will be required to have the removed before the financial institution will lend on the property.  Title insurance is purchase to protect against items that were not originally found on the title that may come up later.  However, it is important to understand that you are purcahsing lender's title insurance.  That protects them, not you.  In order to protect yourself, you will need to purchase title insurance for yourself.  You can let the lender know you would like that added to your closing costs.  

#5-Don't forget you have the right for a final walkthorugh before closing.  You do this to ensure the property is in the same consition as when you wrote the offer and got an accepted contract.

#6-Before closing you will receive the HUD-1.  Take time to review this document before closing.  It outlines the costs involved in financing the property.  Pay close attention to make sure there are no unnecessary or unexpected fees.  Sometimes there are just mistakes.  

#7-It is time to close! You will be signing a lot of documents.  Take time to understand what you are signing.  The closing attorney will be happy to explain any items you request.  Once the closing is complete and you have your keys, the closing attorney will prepare the new deed and send it to the county recorder. 

We will be here for you the entire way, overseeing the process and making sure everything goes smoothly.