Homebuyer Checklist: Ten Things To Do After You Get An Agreement Of Sale

An agreement of sale is basically a contract between you (the homebuyer) and the person who currently owns the home. When you get an agreement of sale, it is easy to feel so excited that you sign right away. However, there are a number of things you need to do before signing the agreement of sale, since after it is signed you may not be able to make any kinds of requests or get out of the deal. Here are the top ten things you should do after you get an agreement of sale:

1. Read the agreement of sale start to finish.

You've probably already discussed everything in this document with the homeowner. However, when the contract is drawn up, there may have been extra things thrown in, and if you don't agree with these terms, you need to fix the contract before you sign. If you just skim the document, you could miss things that come back to haunt you later.

2. Get a home inspection.

Before you purchase the home, you should get a home inspection. This home inspection will uncover any problems that might be present, even if they aren't easily spotted by the naked eye. Home inspections might be a bit pricey, starting at around $500, but they are well worth the money. If you're required to sign the agreement of sale before you can get the home inspection done, it should have a clause that releases you from the contract if problems are found with the home.

3. Make sure that there is a mortgage clause.

Sometimes, even if you think you have good credit, it can be hard to get approved for a mortgage. If you haven't been pre-approved, you might find that you can't get a loan in the amount you need, and if this is the case, there should be a way out of the contract. This clause should specify an interest rate. Otherwise, you could be forced to get a mortgage and a very, very high interest rate just to fulfill the contract.

4. Determine who will pay for utilities and other related expenses while the deal is in escrow.

If this is not in your agreement of sale, you need to talk to the homeowner about it. They might assume that you're paying for all or some of these costs. In reality, however, these things should be at their expense until the title is transferred. Everyone needs to be on the same page.

5. Find an escrow company.

Your realtor might be able to help with this one. You and the current homeowner need to decide on an escrow service. Research the company fully. There are a lot of dishonest escrow services that will take some of the money, as well as a number of scams. You need an escrow service you can trust and that you and the current owner both agree upon.

6. Put your money in escrow.

Once you've decided on an escrow service, put your money in escrow. Adding your down payment to the escrow account means that you'll be paying escrow fees whether or not the deal goes through, so keep this in mind.

7. Do a final walk-through of the house.

Before you transfer the title, it is important to look at the house once again to make sure that there haven't been any recent damages. If there have, you should ask the homeowner for information about how it occurred. You should also ask for a credit or that the damages are repaired before you officially purchase the house.

8. Make any corrections you need to the contract.

Before signing, it is important to make a new copy of the agreement of sale and reread it once again. Even if you hand-write a note on the copy, you should reread everything to ensure that it is exactly what you need. If there are any discrepancies at all, they could hurt you later.

9. Meet with mortgage lenders.

If you have not already been pre-approved for a mortgage, now's the time to start booking for one! Take some time to clean up your finances, and then begin applying for a mortgage. Make sure that you closely compare interest rates, terms, and other conditions offered to you. Every deal will be slightly different.

10. Begin budgeting!

Lastly, now is the time to really start putting money away for your mortgage payments every month. You do not want to fall into a foreclosure situation! Pump up your savings by sticking as much as possible in the bank out of every paycheck. That way, when the deal officially goes through, you'll be ready to make payments every month.