Once you get acceptance on your new house, you’ll probably go from total excitement, to a bit of panic. Packing, planning, escrow, your loan – there’s a lot to do.
Here’s a list of the top “now what” things you need to do (and a few you DON’T want to do).
1. Wire transfer your initial deposit into escrow – Your deposit is typically 3% of your initial offer. You have 3 days to wire transfer the deposit into escrow. The escrow officer will send you wire instructions to make the transfer. If you prefer to go old school and use a check, you have to write that into your initial offer.
Worst case scenario – if you don’t get it the deposit in within 3 days, the listing agent can send a 2 day notice to perform to make the deposit. If you don’t get it in, the seller can cancel you. That almost never happens.
2. Notify your lender – Loan approval takes a long time. Most likely you will have 21 days to get it. You want to make sure your lender knows you got accepted and to get the ball rolling. Your agent should really do this for you, but you want to make sure it’s done.
Worst case scenario – You delay the loan approval process which may cause you to miss the loan contingency deadline and could result in cancellation by the seller.
3. Set up inspections – It’s up to you to do any and all inspections you would like during your contingency period. The default days to complete inspections is 17 days, although listing agents are frequently reducing it to 10 days. In practice, your agent should help you with this process, but ultimately, it’s your call to order the inspection you would like.
(Read: Which inspections should I get?)
Worst case scenario – You wait too long and don’t get your inspections done in time and have to ask for an extension, accept the house without all inspections completed, or risk getting cancelled by the seller.
4. Contact Insurance – If you’re buying a townhome or condo, the HOA usually provides exterior insurance and you would only need to get the equivalent of renter’s insurance which is a quick and easy process. However if you need to get insurance for the structure, you’ll want to start that process early on. Many insurance companies have stopped writing fire insurance policies for many homes in Westlake Village and the surrounding area. You’ll want the extra time to shop around.
Worst case scenario – You wait too long and have to settle for insurance that may be more expensive than necessary.
5. Contact moving companies – Some moving companies need a decent amount of lead time to schedule your move. Plus you’ll want some time to shop.
Worst case scenario – You can’t move in!
6. Register your kids for school – Once you get into escrow, you’ll want to start the registration process to make sure your kids are ready to start school once you move. Most schools accept the escrow instructions as sufficient evidence.
Worst case scenario – Your spot may go to another kid.
And Now the DON’T Dos
1. Don’t start shopping – I know it’s tempting to start shopping for new furniture and a cool big screen TV, but you don’t want to do anything that may affect your loan. It’s not 2006 anymore. The lending process has gotten much more stringent. Some lenders will pull your credit again in the latter part of your escrow period and you don’t want to do anything that may throw off your ratios. You’re welcome to buy your new car the day you get the house keys, but not before!
Worst case scenario – Your loan get’s denied after you removed contingencies and you lose your 3% deposit.
2. Don’t start packing – There are a lot of hurdles to get over before you should start packing – inspections, loan, disclosures, etc. Your contingency period is typically 17-21 days. Give yourself a couple weeks to make sure you want to go forward with the purchase before you start packing all your stuff.
Worst case scenario – You end up cancelling your purchase and have to unpack all your stuff again.
3. Don’t get fired! – The only time I’ve ever heard of a buyer losing their deposit is when they lost their job after removing all contingencies.
Worst case scenario – You lose the house, your deposit, your spouse, and your dog.