How exciting! You are under contract!
Congratulations on finding your dream home and entering into contract! You have a lot to do- but don't fear, Elke is here!
Earnest money: When you go under contract, you will typically need to provide earnest money. Think of this as a deposit, usually around 1% of the contract price. In the Myrtle Beach area, the buyer's attorney often holds this earnest money in an escrow account, and it will be credited back to you at settlement.
Loan: If you're financing your home, you have likely already started the pre-approval process with your lender. Now, the lender will require you to complete the loan application, provide updated documents, and submit your loan package for underwriting. This is when you finally get to lock in your interest rate! The lender will be able to get you a list of fees and costs that you can expect to pay. If you are going to be selling a house after your purchase, make sure you discuss with your lender about being able to do a 'recast' on your new loan.
Appraisal: Meanwhile, the lender will order an appraisal to determine the property's value and ensure it aligns with the contract price, ensuring the lender doesn't lend more than the property's worth. Remember, a appraisal is different than a home inspection. A appraisal is to check the value, while a home inspection is used to determine what repairs the home might need, and what you might expect to have to repair in the future.
A word of caution: Elke had a purchaser once decide to purchase new tires with a special at the automotive store with $0 money down, $0 payments for 12 months. Guess what? They almost didn't get the loan because they opened a new credit line for $5,000. With that being said, avoid making significant purchases or allowing anyone to pull your credit before settlement without talking with your lender. That means don't run out and buy furniture, appliances, etc. It also means don't pay off any credit cards without a discussion with your lender. Sometimes paying off debts can actually reduce your credit score, jeopardizing your loan. Also, refrain from depositing cash, accepting cash gifts, or moving money around without consulting your lender. These actions could potentially jeopardize your loan approval.
Inspections: Inspections are a crucial part of the home buying process. The most common inspection is the home inspection, which helps identify any potential defects and gives you an idea of future budgetary considerations for repairs.
In your contract, you may have a due diligence period, commonly used in South Carolina. This period allows you to conduct inspections, request repairs from the sellers, and receive their response before a specified date. If you find any inspections concerning or if the seller refuses a repair that's crucial to you, you usually have the right to cancel the contract before the specified date, although you may forfeit a pre-negotiated termination fee.
Attorney: In South Carolina, it is customary for each party involved in the transaction, the buyer and the seller, to have their own attorney to represent their interests. If you don't have an attorney that you have used in the past, Elke has a list of attorneys that she will be happy to give to you. Once you have chosen an attorney, Elke will send them the contract and they will get in touch with you for the next steps.
Insurance: Obtaining homeowners insurance is essential for your new home. Your insurance agent will likely ask questions about the property, such as square footage, roof type, and age- so make sure you have that information. Your home inspection report and the mls listing will have much of that information. If you aren't sure of something, you can always call Elke who will get you the information. You'll want the insurance coverage to start on the day of settlement. Your lender will need an insurance binder, so be sure to have your lender's information readily available when speaking with your insurance agent. It's recommended to contact at least two insurance providers, as pricing in the Myrtle Beach area can differ significantly due to factors like hurricane risks that larger insurers may consider undesirable or uninsurable.
This is a very much a shortened list and doesn't go over everything by any means. Don't forget to get your copy of "Your buyer's guide" from Elke, as that really goes over all the details.
As you proceed through the closing process, remember to communicate closely with your agent Elke, attorney, lender, and insurance agent to ensure a smooth and successful closing on your new home.
*Please note that the above information is not an exhaustive list, but it covers many key aspects. Each transaction is unique, and not all items may apply to your specific situation. It's important to remember that this information should not be considered legal advice.