Step 5: Offer accepted / Deposit Earnest Money

YAY! Your offer is accepted. It may have been your first offer. It may have been your 5th offer. Everyone’s journey to homeownership is different.

Once your offer is formally accepted, you will need to deposit your earnest money with the designated Title company within 3 days.

Your earnest money deposit is typically 1-3% of the sales price. This is refundable if you choose not to buy the home due to the results of an inspection, the seller’s disclosure, or failure to appraise at value.

Step 6: Title Report Review

This is a pretty hands off part for you and I. But during this time, Title is working diligently on this very important detail. Once they have completed their review (typically in 1-3 business days), we will receive this very informative report and I will go over it with you.

The Title company (aka “Escrow”) is a neutral third party in your transaction and will only take mutually agreed upon written instructions. The title company will research the title of the home you are buying, make sure there are no liens or judgments against the home or seller. Your name/social security number will be researched as well, to make sure there are no outstanding liens or judgments against you that would prevent the purchase from going through. Once the property’s title is cleared, the title company will issue a title insurance policy, insuring the discovery. The seller buys this policy for you and you in turn buy one for your mortgage lender (this is a part of your closing cost). The fee of the policy varies depending on the purchase price and condition of the home.

Step 7: Inspection

I strongly advise you get your home inspected by a reputable professional home inspector. Buying a home is a huge investment and you need to be sure your property is safe and will stand the test of time without any major costly repairs. We will use the information gathered from the inspection to negotiate money and repair requests from the seller.

The cost for an inspection is solely the buyer’s and is usually not refundable. Approximate cost is $600-1000.

An inspection is an excellent way to get to know the house, what has been done properly, and what will need future maintenance. Inspectors will look at everything from the roof to the basement/foundation, check for dry rot and pest infestation, test the appliances, run the furnace, evaluate the plumbing, electrical, and other aspects of the property.

Recommended Inspections include:

• General Inspection: Provides you with an overview of the interior and exterior of the mechanicals, structure, roof, attic, pest, & dry rot. A lengthy report with photos will be emailed to you after the inspection is performed. Approximate cost is $300-$400.

• Sewer Scope: A camera is sent down the sewer stack from the house to the city’s connection that is looking for roots, displacements, holes, bellies, or other issues. Approximate cost is $125.

• Radon test: Radon is a harmful gas that is the 2nd leading cause of lung cancer. It is caused by decomposing granite deep beneath the soil and Portland happens to have higher levels due to Missoula floods that occurred 13-15,000 years ago. Approximate cost is $125

• Oil Tank Search/Soil Samples: Older homes have a tendency to have an oil tank on the property, either as a working fuel source or abandoned after a gas upgrade. If the tank has been decommissioned and the seller has documentation to prove as such, no problem. Sometimes a seller has no knowledge of an abandoned tank on the property. If this is the case, I strongly recommend the buyer pay to have a tank search done (approx. $125). This will verify if there’s any tank on the property and if there is, the seller will need to properly decommission it.

Step 8: Negotiation / Repair Requests

After inspections are complete, the buyer has the opportunity to ask the seller to address some of the deficiencies that were discovered. There are two ways to address deficiencies— request seller credit ($) or repair. The seller credit to the buyer can come in the form of a credit towards your closings costs/ prepaids, or as a reduction to the sales price. Since this step is a negotiation, every situation is a little different.

Step 9: Appraisal

This is the last contingency we have to satisfy before closing. Once you have removed your Home Inspection Period Contingency and agree to move forward with the purchase, I will let your mortgage lender know to order the appraisal. An appraisal is a mini-inspection so to speak, on the lender’s behalf. This is different than the above inspections that you had performed for your own benefit & information. The lender wants to make sure the home is in its represented condition and in-line with local comparable home sales in order to reduce their risk to lend you the money to buy the property. You don’t need to be present during the appraisal but will receive a copy of the final report before or at closing. If the appraisal comes in under our purchase price, we will have to problem solve to find a solution to make up for the “appraisal gap” (the difference between the purchase price and the appraisal valuation).

Step 10: Homeowners Insurance / Utilities

Your lender will require you have a homeowners insurance Policy. You can typically bundle this with your other insurance policies, but you can also shop around and find whats best for you.

Utilities (water, electric, gas, garbage, etc) will need to be turned on and put in your name. I can direct you to your service providers.

Step 11: Closing

‘Closing’ is the term used when the deed has transferred from the seller’s name and into yours. There are 3 steps to closing: signing, funding, & recording. About two days prior to your closing date you will go the title company to sign all your loan documents. This process takes about one hour. You will bring with you proof of your identity (driver’s license or passport) and the balance of your down payment in the form of a certified cashier’s check made payable to the title company. You may also arrange a wire with the escrow officer in place of a physical check. The packet of loan documents will be sent back to your lender for final review, which may take a day or two. After your lender receives the signed loan documents, they will release the funds to escrow in order to proceed to close. Once the County records your closing and provides recording numbers as a receipt, then you officially own the property.

Step 12: Possession

In a small celebratory ceremony, I give you the keys and you officially take possession of your new purchase. Yay! I have affordable recommendations for companies who specialize in moving, cleaning, painting, and so much more. I will always be here as a resource long after our transaction has closed.