- BUYING RESOURCES -
RESOURCES FOR:
Congratulations on having your offer accepted! You are now under contract. The next several weeks are when the inspection, mortgage, appraisal, title work, insurance and other closing items are completed.
JUMP TO
Once the contract becomes effective, several things begin moving at the same time. If you are financing the purchase, your lender begins the full mortgage process. You also work through inspections, appraisal, title, insurance and the other items needed before closing.
A typical financed transaction may take several weeks, but the important dates are the dates in your accepted contract. YELLOW calculates those deadlines from the Effective Date and shows the important items throughout your transaction.
YELLOW SAYS...
RESPOND QUICKLY DURING CLOSING
Mortgage and title companies often ask for documents more than once, and sometimes with a short turnaround. Respond as quickly as you can. A request that sits unanswered for several days can push the entire closing schedule back.
YELLOW will also show important transaction dates and closing tasks on your homepage so you can see what is coming next.
The Florida AS-IS contract used by YELLOW starts its deadlines from the Effective Date, which is the date the final required signature or initial is completed and delivered.
IMPORTANT CONTRACT DATES
If a contract deadline falls on a Saturday, Sunday or legal holiday, the AS-IS contract generally moves the deadline to the next business day.
CLOSING GUIDE
Florida Title & Guarantee Agency provides a comprehensive summary of the closing process. Their buyer guide is linked below.
Below is what you're likely to see during the pre-closing period
A preapproval got you ready to shop. After the offer is accepted, you complete the full mortgage application for this specific home.
The lender will verify your income, employment, assets, debts, credit and the source of the funds you will use for closing. The lender also evaluates the property through the appraisal and insurance process.
DOCUMENTS YOUR LENDER MAY REQUEST
Do not be surprised if the lender asks for an updated version of something you already provided. Statements and pay records can become outdated while the loan is being processed.
YELLOW SAYS...
DON'T CHANGE YOUR FINANCES
Until the home closes, avoid financing a car, opening new credit, running up balances, co-signing another loan, making large unexplained deposits, or spending the money you need for closing.
If you are considering changing jobs or moving a large amount of money between accounts, speak with your lender first. Lenders can recheck employment, credit and assets before closing.
UNDERWRITING
Underwriting is the lender's detailed review of the loan. It is normal for an underwriter to approve the file with conditions and then ask for additional documents before issuing final approval.
Keep sending requested information until the lender confirms that the loan is clear to close.
Your lender will review your credit during the mortgage process and may check it again before closing. A credit-report charge may appear among the lender's loan costs.
The important part is not the small credit-report fee - it is keeping your credit profile stable until after closing. New debt or missed payments can change the loan qualification you had when you were preapproved.
For a financed purchase, the lender normally orders an appraisal to make sure the property provides adequate value for the mortgage being made.
An appraisal is different from a home inspection. The appraiser is primarily evaluating value and the property as collateral for the lender. The home inspector is looking for physical defects and maintenance problems.
The appraisal report usually includes information about the home, neighborhood and comparable sales. You normally pay the appraisal charge as part of the mortgage process.
IF THE APPRAISAL IS LOWER THAN THE PURCHASE PRICE
A low appraisal does not automatically end the sale, but it can affect the lender's willingness to make the requested loan. Under the financing provisions in the AS-IS contract, you must continue using good-faith, diligent effort to obtain loan approval and follow the financing-notice deadlines shown in your transaction.
A low appraisal may lead to a price negotiation, a larger buyer down payment, a different loan structure, or a financing issue that must be handled before the Loan Approval Period expires.
Here's an actual appraisal as an example:
YELLOW strongly encourages sellers to provide a pre-listing inspection report. Even when one is available, you may still hire your own inspector during your Inspection Period if you want an independent review.
Inspections arranged by buyers on YELLOW are performed by independent inspectors. YELLOW does not receive a referral fee from the inspector.
A general home inspection evaluates visible and accessible parts of the property, commonly including the roof, structure, electrical system, plumbing, HVAC, appliances and other major components.
Nearly every inspection finds something. The important question is whether the findings are routine maintenance items or problems significant enough to change how you feel about the purchase.
YOUR AS-IS INSPECTION RIGHTS
The YELLOW contract is the Florida AS-IS Contract for Sale and Purchase. During the Inspection Period stated in your accepted contract, you may perform inspections at your expense.
Under this AS-IS contract, the seller is not automatically required to make inspection repairs. You can ask the seller to repair something, provide a credit, or change the price, and the seller can agree, decline or negotiate.
Most importantly, the AS-IS contract allows the buyer to terminate by written notice before the Inspection Period expires. If you want to cancel based on the inspection, do not let that deadline pass while waiting for a repair negotiation.
The seller is required to provide reasonable access for inspections and keep utilities available as required for the inspection process. If an inspector cannot test a major system because a utility is unexpectedly off, tell YELLOW promptly so it can be addressed while the Inspection Period is still open.
Inspection pricing varies with the size of the home and the services ordered. Ask what is included before scheduling, because items such as WDO, sewer scope, pool, septic, wind mitigation and 4-point reports may be separate.
YELLOW SAYS...
FIND AN INSPECTOR NEAR YOU
Let the inspector know you need an inspection completed for the purchase of a new home, and they’ll handle the rest from there.
The following links will show inspectors in your current location of : (change search criteria as needed)
A WDO (wood-destroying organism) inspection is separate from the general home inspection. A licensed pest-control professional looks for visible evidence of termites and other wood-destroying organisms and for related damage.
A WDO report may be requested by a lender, loan program, insurer, or buyer, and it is particularly useful when there is visible evidence of termite activity or the property has a history of treatment. Ask the company whether the quoted price includes the written report needed for your transaction.
YELLOW SAYS...
FIND A WDO INSPECTOR
To find a WDO inspector, we recommend a basic internet search in the location of your new home (i.e. WDO Inspector in ).
Let them know you need a WDO inspection completed for a mortgage on a new home, and they’ll handle the rest from there.
The following link will help you find WDO inspectors in your area of : (change search criteria as needed)
A septic system is mostly underground, so its condition cannot be judged from a normal walkthrough. A septic inspection can evaluate the tank, accessible components and system operation and may include pumping or opening the tank.
If the property uses septic, we recommend considering a septic inspection during your Inspection Period. Pricing varies based on the system and how difficult it is to access.
This inspection is optional.
With a sewer-scope inspection, a small camera is run through the main drain or sewer line to look for damage, blockages, root intrusion, deterioration or other problems.
Here's who we suggest these inspections for:
Pricing varies by property and access.
A property survey shows the boundaries and physical features of the land. It can identify fences, improvements, easements and encroachments in relation to the property lines.
Under the YELLOW AS-IS contract, the buyer may obtain a survey at buyer expense at least 5 days before Closing.
SURVEY PROBLEMS
If the survey shows a problem that qualifies as a survey defect, the buyer must give written notice within 5 days after receiving the survey and no later than Closing. The contract then provides the seller an opportunity to cure the defect under the contract's title/survey procedures.
Common survey issues include fences over a boundary line, structures extending into easements, improvements outside the legal property, or differences between the legal description and what appears on the ground.
YELLOW SAYS...
ORDER THE SURVEY EARLY
Do not wait until the day before closing. The contract gives you a review period after receiving the survey, so ordering early gives everyone time to address an issue if one is found.
To find a surveying company, search in the location of the new home or use the Florida Surveying & Mapping Society.
"Title" refers to legal ownership of the property.
Before closing, the title company researches the property's ownership records and looks for matters that could interfere with the seller transferring clear title to you. Examples can include mortgages, liens, judgments, ownership claims and unreleased recorded documents.
Under the YELLOW AS-IS contract, the title commitment is due at least 15 days before Closing. After receiving the title evidence, the buyer has 5 days to give written notice of a title defect.
WHAT HAPPENS IF A TITLE PROBLEM IS FOUND?
The seller receives up to 30 days to cure a properly reported title defect. After the cure period, the buyer has 5 days to make the election allowed by the contract. The contract can also allow an extension of Closing, up to 120 days, while certain title defects are being cured.
Title problems do not automatically mean the purchase is over. Many are routine items that the title company can clear before or at closing.
If you have a mortgage, the lender requires a lender's title insurance policy covering its loan. The YELLOW transaction also provides for an owner's title policy protecting your ownership interest up to the policy amount.
The title company handles the title search, policy preparation, closing documents and the steps needed to clear title issues.
Title issues do occur. Here are examples of why title work and title insurance matter:
If you are financing the purchase, your lender will require acceptable property insurance to be in place before closing.
If you already own a home, you can call your insurance agency and let them know you’re buying a new home. They will write a new policy.
If you don’t have an insurance agent, you have a couple options.
Option 1: BUY INSURANCE DIRECTLY
If you know exactly what coverage you need, buyers can contact insurance companies directly to buy a policy.
Option 2: USE A BROKER
Many buyers, especially new buyers, use the services of an insurance broker. The broker will shop around and find a policy that meets the coverage you need.
YELLOW SAYS...
USE AN INSURANCE BROKER
We suggest buyers use an insurance broker. It makes the process much easier.
To find an insurance broker, we recommend a basic internet search in the location of your new home (i.e. Homeowner insurance brokers in ). A local agency will have more knowledge of the coverage requirements and will help find what's right for you.
The following links will help you find insurance brokerages in your area of : (change search criteria as needed)
POTENTIAL REQUIREMENT: 4-POINT INSPECTION
In Florida, many homeowners insurance companies require a 4-point inspection, particularly for homes over 20-30 years old.
This inspection focuses on four critical areas of the home: the roof, plumbing, electrical system, and HVAC (heating, ventilation, and air conditioning). Its purpose is to ensure these systems are in good condition and reduce the risk of costly insurance claims.
The 4-point inspection is separate from the general home inspection and can be scheduled at any time during the closing process. Insurance companies need this report before issuing a policy, so it's important to factor in time for the inspection and review process.
If you’re unsure where to start, many licensed home inspectors in Florida offer 4-point inspections. You can find licensed inspectors online, and the inspection typically costs between $75 and $150.
FIND AN INSPECTOR NEAR YOU
The following links will help you find inspectors in your area of : (change search criteria as needed)
SIMPLE PHONE SCRIPT:
YOU: Hello, my name is [Your Name], and I’m buying a new home in [City]. I need to schedule a 4-point home inspection for homeowners insurance. Could you provide me with a price quote and let me know the earliest available date?
INSPECTOR: Response
YOU: Great, thank you. Could you also explain what the inspection will cover and approximately how long it will take?
INSPECTOR: Response
YOU: That sounds good. I’d like to schedule the inspection for the earliest available date. Please confirm the date, time, and any preparations I should make.
INSPECTOR: Response
ADDRESSING REPAIRS
A 4-point inspection can uncover items that prevent an insurer from issuing acceptable coverage. If that happens, tell YELLOW and your lender promptly.
The seller is not automatically required to make these repairs under the AS-IS contract. However, an insurance problem can affect your financing, so the issue may need to be negotiated and resolved while your contract deadlines are still open.
MAKING THE INSURANCE PAYMENT
Many mortgage lenders collect property taxes and homeowners insurance through an escrow account. A portion is included with your monthly mortgage payment and the lender pays the insurance premium and tax bills when due.
You will normally also pay amounts for insurance and the initial escrow account as part of the cash needed at closing. Your Loan Estimate and Closing Disclosure show these amounts.
FLORIDA INSURANCE TIP
Start shopping for insurance early in the closing period. In Florida, the age and condition of the roof, electrical system, plumbing and HVAC can affect whether a company will insure the home and how much the policy costs.
Ask your broker for a written quote showing the annual premium, wind or hurricane deductible, other deductibles, coverage limits and whether flood insurance is separate.
Standard homeowners insurance generally does not cover flooding from rising water. Flood coverage is purchased separately through the National Flood Insurance Program (NFIP) or a private flood insurer.
If a building securing a federally regulated or insured mortgage is in a FEMA Special Flood Hazard Area, flood insurance is generally required for the loan. A lender can also require flood coverage in other situations.
FIND YOUR FLOOD ZONE
FEMA flood-zone designations are useful, but they are not a prediction that a particular home will or will not flood. Ask the insurance company for an actual flood-insurance quote when coverage is required or when flood risk is a concern.
The YELLOW AS-IS contract provides a 20-day period for the flood-zone, elevation and flood-coverage review described in the contract. Do not wait until the end of closing to investigate this issue.
Before closing, you will need to set up the utility services at your new home. This includes both power and water at a minimum, but you may also need other services like gas or propane. Services like phone, internet, cable, and security can be scheduled now, but are not needed before closing.
Contact the providers serving the property and schedule the accounts to begin when you take possession. Most utilities can now be established online or by phone, although identity verification or a deposit may be required.
Start planning the move soon after your offer is accepted, but avoid making expensive nonrefundable arrangements until the inspection and financing process are far enough along that the closing date is reasonably secure.
Moving costs vary widely based on distance, home size, packing, stairs, storage, time of year and whether you use a full-service mover or rent equipment yourself. Get several written estimates rather than relying on a national average.
MOVING CHECKLIST
MOVING ALTERNATIVE - CONSIDER "PODS"
Portable storage companies drop a container at your home, let you load it over time, and then move or store the container. This can be convenient if your move-in dates do not line up perfectly.
"PODS" is one brand, but there are several similar services:
Once underwriting is complete, the lender will issue final loan approval, often called clear to close. That means the mortgage is ready for the final closing steps, subject to any final lender conditions.
CLOSING DISCLOSURE
For most purchase mortgages, you must receive the Closing Disclosure at least 3 business days before closing. It shows the final loan terms, monthly payment, closing costs and cash you need to close.
Compare the Closing Disclosure with your most recent Loan Estimate. Check the loan amount, interest rate, monthly payment, lender charges, credits and the amount you must bring to closing.
YELLOW SAYS...
VERIFY WIRE INSTRUCTIONS
Real-estate wire fraud is serious. If you receive wiring instructions for your closing funds, verify them directly with the title company using a phone number you already know is correct.
If you receive an email saying the wiring information has changed, do not send money until you independently call the title company and confirm the change.
The AS-IS contract gives you access for a final walkthrough on the day before Closing or on Closing Day before the closing occurs.
The walkthrough is not a new home inspection. Its purpose is to confirm that the property is still in the required condition, the seller has not removed items that were supposed to remain, agreed work has been completed, and the seller has vacated as required for possession at closing.
FINAL WALKTHROUGH CHECKLIST
