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Residential and Luxury Real Estate

A Step-by-Step Guide to Real Estate: Under Contract? Now What?

If you are reading this and under contract on a home, congratulations! You’ve made it past the offer and negotiations stage of the real estate process and are one step closer to being a homeowner. The first thing you will have to do is submit your earnest money deposit.  The amount depends on the price of the home. This is typically done within the first 24 hours after getting under contract. The earnest money deposit is basically a down payment on the home, proving you have a real interest. In Colorado, you have several opportunities to back out of the contract and get your earnest money back. However, if you don’t pay attention to the dates and deadlines or want to back out of the contract for no reason, then you will lose your earnest money. 

Next comes the home inspection. Unless you waive the inspection  (which is typically not recommended), your real estate agent will schedule an experienced, trained inspector within the first week or so after getting under contract. You may choose to do a physical inspection, radon inspection, sewer line scoping, roof inspection, structural or geological inspection, an HVAC inspection or all of the above. Inspections typically take between 90 minutes to a few hours depending on the size of the home. You and your real estate agent will arrive towards the end of the inspection so that the inspector can explain what they have found and if there’s any serious concerns. Once you get the detailed inspection report back from the inspector you and your agent will go through and prepare an inspection objection where you’ll write down your requests for what you’d like the seller to fix or if there’s any health and safety items that are concerning to you. Depending on what was found during the inspection, this can range from requesting thousands of dollars of repairs to be completed before the closing date or a small check to cover the expenses once you move in.  The seller is under no obligation to address these concerns and will submit an inspection resolution where they negotiate what they will and won’t address from your objection. 

You will also complete due diligence forms and approve of the seller’s disclosures along with the homeowner’s association rules if there’s an HOA. If you have concerns about any of these things or have issues with your loan, deadlines are in place to ensure that you can back out of the contract without losing your earnest money deposit. Otherwise you can remove these contingencies and move on with the transaction. 

A week or so before closing, your real estate agent will schedule your final walkthrough which is usually done within 5 days of the closing date, sometimes the day of. This is to ensure that the property is in the same condition as when you first wrote the offer and to also check to see if the negotiated repairs were done after the inspection. Your agent should provide you with a copy of the buyer’s settlement statement before closing to ensure that the numbers look correct and that you understand everything. 

Next stop is the closing table! Here is where you will sign the loan documents and the remaining paperwork. Once the loan is funded you will receive the keys (unless the contract states a delayed possession or rent-back) and you are free to move into your new home! Congratulations! You have successfully completed one of the biggest transactions you will likely ever make! You are officially a homeowner!

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