Finding a house you want to buy deserves a celebration – Part 1 is done! But there’s a little bit of work for you and the seller to do before the place is officially yours. The first step may feel basic: You need to make an offer. But there’s more to it than stepping forward with a payment in hand. (Who knew?) Ahead, we’ll cover what an offer is as well as a few additional steps to know about and prepare for.
The price the seller is asking for could be what you’re willing to pay, but there could also be some wiggle room to pay a less. And in a competitive market … you could also end up paying more.
Regardless, offers, which your real estate agent can help you negotiate, could include:
For example, a contract could say that the seller gets to keep the money if the buyer changes their mind for reasons other than the seller’s refusal to make improvements needed after a home inspection. The contract could also protect the buyer, and require the seller to return the money under certain conditions. If the sale does go through, the earnest money is usually applied to the closings costs or down payment.
In addition to these highlights, you’ll also want to read the fine print of any homebuying offer and contract. Ask a real estate attorney or your realtor to walk you through any unfamiliar terms.
If the seller accepts your offer (great news!), then you’ll enter into a contract to buy the home.
Once you're under contract, it's time to carry on with property inspections. You may feel like you want to skip this, and the seller may even say the house is being sold as-is and they won’t make any changes. However, it could be worth pausing and considering having one done because an inspection can give you an understanding of the home's overall condition, which could help you identify any potentially costly changes you or the seller will have to make.
Some of the things inspectors will be looking for (there could be more):
It's smart to do some research before hiring a home inspector to ensure they have the proper training and expertise.
If the inspector finds problems – big or small – then you have the opportunity to ask the seller to pay for or repair them. You’ll be able to cancel the contract to buy the home if you have an inspection contingency in your purchase contract and the seller doesn’t agree to address issues.
Your real estate agent may be able to recommend a home inspector and you could also check online reviews for home inspectors in your area. Not all states require inspectors to be licensed, so it's smart to do some research before hiring one to ensure they have the proper training and expertise.
As your inspections are taking place, work with your lender to secure financing for your new home loan. (Yes, there's a lot of multitasking that happens when buying a home.)
During this process, you'll usually be asked for items like pay stubs, employment history, W-2s, and bank and savings statements, so begin to prepare these documents as early as possible. Submit all the requested information to your lender as they're requested to ensure your loan stays on track.
After you’ve secured a full loan approval, it’s the home stretch! You can get ready for closing day.
Before you pop the champagne, here are some dates to keep in mind:
Contact your lender or closing agent to find out how you will receive your Closing Disclosure. This will lay out your final loan terms and payments. It will also detail the funds you owe on closing day for the down payment and closing costs.
Talk to your closing team to find out how you'll need to pay for these – typically, a certified check is required, though a wire transfer may be acceptable. Take the time to read the Closing Disclosure closely and ask your lender, personal real estate attorney or agent any questions you have.
By law, you should receive the Closing Disclosure at least three business days before closing.
There’s just one last step before you sign on the dotted line: Complete a final walk-through of the property. This is to confirm that any agreed-upon repairs have been made and that any items that you negotiated in the purchase contract for the seller to leave (such as appliances, window coverings and light fixtures) are still in place.
A tip we’ve seen: Bring your real estate agent. They can be a witness to the walk-through and answer any questions that might arise. If something is off, they'll be able to contact the listing agent to get it settled before you close on the home.
Then, make plans to change those locks.
This article is for informational purposes only and is not a substitute for individualized professional advice. Individuals should consult their own tax advisor for matters specific to their own taxes and nothing communicated to you herein should be considered tax advice. This article was prepared by and approved by Marcus by Goldman Sachs, but does not reflect the institutional opinions of Goldman Sachs Bank USA, Goldman Sachs Group, Inc. or any of their affiliates, subsidiaries or division. Goldman Sachs Bank USA does not provide any financial, economic, legal, accounting, tax or other recommendation in this article. Information and opinions expressed in this article are as of the date of this material only and subject to change without notice. Information contained in this article does not constitute the provision of investment advice by Goldman Sachs Bank USA or any its affiliates. Neither Goldman Sachs Bank USA nor any of its affiliates makes any representations or warranties, express or implied, as to the accuracy or completeness of the statements or any information contained in this document and any liability therefore is expressly disclaimed.
Join our Marcus social media community, where we share content and inspiration to help improve your financial health. See you there!