From Offer to Ownership: Mastering the Homebuying Journey (Part 2)

You're under contract—now what? 🏡 In this action-packed episode of Mortgage, Markets, and More, Peter D'Angelo takes you from making the offer all the way to getting your keys! Learn the critical steps: earnest money, inspections, appraisals, underwriting, closing day, and essential post-closing tips. ⚡ Whether you're buying your first home or just need a refresher, this episode is packed with insider knowledge to make you a confident homeowner. #HomeBuying #MortgageTips #FirstTimeHomeBuyer #ClosingDay #RealEstate101 #MortgageMarketsAndMore

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Peter D'Angelo | NMLS: 885309 | Branch Manager | Guaranteed Rate, Inc., NMLS 2611
Peter.DAngelo@Rate.com

*All information, topics, discussion is my own personal opinion and insight, not reflective of Guaranteed Rate, Inc. May contain market information for informational purposes only, not to be used as financial advice.

Transcript

Did You Know? | The Homebuying Process: From Dream to Keys (Part 2 of 2)

1. Introduction (30 seconds)

• Welcome back and quick reminder:

"Last time, we got you ready to shop. Today, let's get you all the way to the closing table!"

2. Step 5: Making an Offer (1–2 minutes)

• Understanding the Offer:
   
  • Price, closing date, contingencies (like financing, inspection, appraisal).
•  
• Earnest Money:
   
  • A deposit showing you're serious; typically 1–3% of the purchase price.
•  
• Negotiation:
   
  • Sellers may counteroffer — stay flexible but know your limits.
•  

3. Step 6: Under Contract (1–2 minutes)

• Home Inspection:
   
  • Crucial to uncover major issues.
•  
  • Negotiate repairs or credits if needed.
•  
• Appraisal:
   
  • Lender requires this to confirm the home’s value matches the loan.
•  
• Finalizing Loan Approval:
   
  • This stage is called "underwriting" — lenders will re-check income, assets, debts.
•  

4. Step 7: Closing Day! (1–2 minutes)

• Final Walkthrough:
   
  • Check that agreed-upon repairs were made, and the home is in expected condition.
•  
• Signing Paperwork:
   
  • Bring your ID, certified funds if needed, and get ready to sign a lot of documents!
•  
• Getting the Keys:
   
  • After funding clears, you're officially a homeowner!
•  

5. Step 8: After Closing (1 minute)

• Set Up Essentials:
   
  • Utilities, locks, address change notifications.
•  
• First Mortgage Payment:
   
  • Typically due 30–60 days after closing.
•  
• Homeownership Tip:
   
  • Start a maintenance fund — plan for repairs and upgrades over time.
•  

6. Fun Fact to End (30 seconds)

• "Did you know? The word 'mortgage' comes from Old French and literally means 'death pledge' — not because it's scary, but because the loan 'dies' once it's paid off!"
• Quick thank-you and encouragement:

"If you're thinking about buying, I hope this series has helped you feel more confident and excited!"

TRANSCRIPT:
 📍  📍   

 Welcome back to Mortgage Markets and More. I'm your host, Peter DeAngelo. I hope you're doing great. We're here with our second part of our did you know series about the home buying process, so where we left off. You are now prepared and you are shopping for a home. You're going out with your local realtor and you're checking out properties in the area and in the towns that you are interested in buying. 

Now we're gonna move on to that offer making stage. So now let's say you found the home. You found the home that you would like to make an offer on. You're pre-approved, you worked with me and your power bid approved. Your mortgage is already done. So now we're gonna talk about  understanding the offer. So when you're placing your offer, I'm going to talk about New Jersey here because I figure. Let's talk about that and then if you're in any other market. It's probably just a little bit easier, but here in New Jersey it's very competitive, so that means you're likely going to need to be putting your best foot forward from your first offer.  Things that you should be clued in by, in the process when you're talking to your realtor about making an offer.

First thing is if there is what's called a best and final deadline, this is when the listing agent lets everyone who's come to see the property know. The sellers are putting out a deadline for offers by, let's say Tuesday at 12:00 PM We need to have all offers, and it's a best and final situation, meaning that the sellers are going to collect all the offers and then select the one that they are going to proceed with.

So let's talk about that offer. What are the elements of the offer and. What should you know about those elements? Well, the first is the price. That's the very obvious one. You are placing an offer at a particular price, but that's not the end all be all. There's also terms to the offer. Now the terms are things like.

Timing, you can tell the sellers, depending on your preparedness, we can close in as little as 30 days or 30 days or less. Or we would like to close in 45 days. Whatever your situation is, may permit one or the other, depending on your lender. That will depend on how fast that you can get the financing completed and close. 

Then the other element are things like contingencies, again, we got price. We've got timing. Timing of your closing, and then contingencies. Like contingencies are the actual terms in the offer. For example, a couple of the major ones to be aware of.

First inspection contingencies last week or two weeks ago, I did a did you know, segment and we talked a little bit about. Contingencies. I'll have that link in the episode description for you. We were discussing how you can tell the seller look, we'll do a home inspection on the property. We'll get into that later.

We'll do a home inspection on the property and then. We are going to limit our requests for repairs to only certain types of things. That's what's called limiting contingencies. It means you're telling them you're going to give them more latitude for what you discover in the property in your inspection phase.

The other contingency to be considered. Is your appraisal contingency? Normally when you place an offer, there will be a clause in this contract that states there's a contingency for this home to appraise for the value that we're offering on in New Jersey. It's very competitive. It's very common for buyers to waive that appraisal contingency.

There's a couple elements to that because you can waive the appraisal contingency on the contract, but still need to have an appraisal performed on the property for your financing. So that's a little distinction. If you wanna learn more about that, there's another episode talking about appraisals and those types of contingencies  you can check out.

Now those are the two main contingencies. You can talk to your realtor about other ones, but we wanna break down the offer. Those are the main elements.  Next is your deposit. On the contract, you will have an opportunity to communicate to the seller. I'm going to offer you, let's just say, $500,000 for your home and an I will give you a deposit on this contract after its acceptance of  $10,000.

Your money would then go to your attorney or the seller's attorney and be held in what's called an escrow account. The escrow account.  Set aside so that when you get to closing, the money that you've already given gets credited back to you, and that money is applied toward your transaction at closing.

So it's held by either your attorney or the seller's attorney. If you're not in an attorney state, your realtor may hold that money in escrow. It's also called an earnest money deposit. These are interchangeable terms, so earnest money deposit, deposit on contract. Both of those apply.  Now that we've talked about the elements of your offer, now you're going to wind up going into the negotiation phase.

You may have some light negotiations, but that may occur in the attorney review phase. Again, this is more specific to New Jersey because we're an attorney. State and attorneys are involved in real estate transactions.

 That is the point. After your offer's already accepted by the sellers, then your contract goes to the attorneys. So there could be negotiations that occur in that phase, but right now we're exclusively talking about negotiations. When you're making an offer best and final situations, that doesn't occur.

If it's not a best and final situation, then the sellers may come back after you place your offer and say, well, we're countering at  pick any number you like from there.  You're going to work very closely with your realtor on that negotiation phase.

It's also very good to be prepared with understanding what your maximum is before you go into the negotiations. So that could involve talking to you, to me, talking to your mortgage professional, to make sure that you understand what you're comfortable with going up to with that property in particular, because you already have verified the taxes and have a good sense of what all the other carrying costs would be. 

Now, let's say you had your offer accepted. Congratulations. This is the exciting part. Now we're going to start with the actual processing of your mortgage application. So in this process, that's where we're going to go through, updating your documents for your loan file. We're going to go through. 

Reviewing your credit, maybe updating your credit report if that's necessary. Getting updated assets, updated income documentation, getting your loan file prepared with the latest and greatest. If you've gone through, let's say, our power bid approval process.  It. It's very light updates that we need at that stage, and we're able to kind of jumpstart your mortgage process.

That's one of the benefits also of getting pre-approved thoroughly, which means you've provided most of the documents that you're going to wind up needing. So just a little side note on why there's so much value in that pre-approval process. And if you work with a company like Rate and you can get your mortgage approved, then.

It's an even faster and easier process at this stage when you're under contract. We're going to start that up while at the same time in tandem, your attorney is going to go into that attorney review phase. If you're in the state of New Jersey. The attorney review phase is your attorney corresponding with the seller's attorney and negotiating the terms of the contract.

The attorneys are gonna go back and forth and they're going to hash it out and finalize the contract. It's important to note you are not under contract until this attorney review phase completes.

That means that during this time, if there's anything that happens in the communications that buyer or seller are not. Okay with, they could either party can pull the plug. That also leaves you exposed because the sellers could entertain higher offers if they happen to come in at that time.  So once attorney review phase completes, now you are fully under contract.

Now you're going to move on to the inspections phase.  You will have a prescribed amount of time. That was determined in the attorney review phase to complete your home inspection.

That's different than the appraisal inspection that's required, possibly on my end. So you're gonna go and you're going to get a home inspector to check out the property. They're going to furnish a report for you. That report will identify everything that's wrong with the property. A good home inspector is going to flag.

Everything so that when you go in there, you have a sense of everything that's going on in that property. Now, depending on how you've negotiated your contract, that will dictate how much of what's flagged in that home inspection is something that you can negotiate with the sellers about. So that's why when we're talking about those contingencies, this is the real world impact in the process now. 

So let's say home inspection goes great, we're good. While that. Process is happening. We're servicing your mortgage application process, your appraisal's getting ordered if it's necessary, if there's no appraisal required, you are being notified about that at this stage,  and then we're able to proceed in the process delivering your mortgage approval. 

Once you have your mortgage approval  and the appraisal, you'll get what's called a commitment letter.  Commitment letter is the mortgage lender's commitment to lend on this transaction. Let's everyone know financing's good to go.  Other things that will happen now after your mortgage is approved, you're going to be shopping for your homeowner's insurance pro tip.

It's good to shop for that as soon as you know you're under contract, just so that you can have a stable number for what you're. Homeowner's insurance cost is going to be, it's going to help you budget better that way too, but you're going to really want to have that finalized after your mortgage is approved.

So there may be some documents that we need to update. It is a document heavy process. We do our best to mitigate that.  Still, there's a good amount of documentation required, and then we'll go through what's called conditions of the approval, and that means that the underwriter is the person involved in the process who issues approvals for loans.

They review your documents. They review your loan file.  They will list out items that need to be updated or things that they notice, like, I need actual clarification about this. So can you provide this document? Those are the types of things you can expect from your mortgage approval. Once we have all those documents and your homeowner's insurance, while at the same time there's a title company involved doing work on their end. 

The title company pulls the records for the property, understands if there's judgments against any parties involved in the process, any judgments against the buyers.  All of that could have implications for you if there are,  but if there's not, they're just getting a clean record of all of that to file with the transaction as well as.

 The lien history for the property you're purchasing. The title company is going to be providing two insurance policies. One is going to be a title insurance policy for the lender, and one is going to be a title insurance policy for you. The homeowner  title insurance is the only insurance I'm aware of that works backwards, and what I mean by that is you are getting a policy that is insuring you against the risk.

This is where the future comes in.  In the future, someone comes forward and says that they own that property, or at some point in the past, they placed a lien on that property.  If that were to happen, this title, insurance policy that you have and that the lender has is what protects you to say, no, no, no, no, no.

We had a clean title delivered to us when we purchased this home. Here's our title insurance policy, and if someone is adamant about that and has documentation of their own, that is what's called a title claim, and that is not your problem. That is for the title company to address, so that's the value of the title company.

 Now that we have all of that your loan file done, you are getting what's called a clear to close that lets everybody know we are done with everything that we need to do to facilitate this transaction to be completed. 

You will get what's called an initial closing disclosure. That is a document that gives you an outline of your closing costs, prepaids down payment, and in a full accounting of what you're going to need to bring to closing.  Those numbers all get balanced is what we call 'em. That between the title company and the lender, because we're going to generate that closing disclosure together to reconcile all of the information everyone has and then deliver that to you at minimum.  Three days before closing. This was a change that occurred in the mortgage industry and in the real estate industry a few years ago, and this was in an effort to ensure that home buyers and home sellers have an accurate accounting, or at least a very close to accurate accounting of the transaction.

With time to ask questions and verify that information so it bakes in at least three days. That would also mean that if you don't receive your closing disclosure, your initial closing disclosure, you will not be able to close until at least three days after that.  But that's your opportunity to talk to me, ask me questions.

I like to review that and make sure that we have an understanding of everything that's there. Any questions get answered. Now. We're moving forward to closing.  When you're going to the closing, before you even get to that closing table, you're going to do a final walkthrough. You're going to go with your real estate agent, you're going to tour the property, gonna check it out, and then you're going to go to the closing.

As long as everything's okay in the property, nothing comes up. Now you're at the closing table. That's when you're going to work with your attorney and the title company who may be acting as what's called the settlement agent, and they are going to help.  Facilitate the signing of all of the documents that are required. 

We at rate, actually offer a hybrid closing option, which is amazing because you can actually e-sign electronically, sign the lion's share of the documents, and save your wrist from carpal tunnel at the closing table.  But if you don't have that option available, it'll be a large volume of documents that you're going to be signing at closing. 

Now you've signed on the dotted line. You've signed your mortgage, you've signed your note, you've signed all of your closing paperwork, you've provided your final payment and the final funds for the transaction. That's normally by way of a cashier's check or certified check. Those terms are interchangeable, or you would be wiring the money and you're going to wire the money very likely to the title company or whoever the settlement agent is in the transaction. 

Now, when it comes to wiring money. I need to let you know it's very important that you always verify those instructions, so whatever party the instructions come from, you need to use the phone number that you have for the person at that company,  individually have separately from the communication to contact the party that's sent you those wiring instructions and verify that information. Wire fraud is real. And it's a huge problem even to this day. And the number one way that fraudsters get away with it is by individuals not going through this verification process.

You do not use the phone number in the communication that you received. To verify the information you have, to use the contact information that you independently have. Now you've maybe wired the money, brought a check. You are closed now.

Congratulations truly on your new home. So now that you have your new home.  Couple key things to remember and to consider. Number one, whatever month that you close in, you are likely going to skip the following month's mortgage payment because mortgages are paid in arrears. So that means if you pay your mortgage on the first of, let's say June, you're technically paying.

For May,  when you're at closing, you're going to wind up prepaying the interest to the end of the month.  It's commonly why people like to close toward the end of the month 'cause it lowers your out of pocket costs. But if you close toward the end of the month, skip the following month, and then you have your first mortgage payment due the month after that, 

so that's the first one. Secondly,  your deed.  Your note get recorded at the county.  That means it's public record and public information,  which also means  you can expect to get inundated with solicitation mail. At your new home address, I'm sorry, I know it's an exciting time, but I wanna make sure that we clear the air so that you can, be prepared for what you're about to see.

You're going to get a lot of mail, and unfortunately, there's also some fraudsters that are going to send mail that will purport to  people involved in your transaction because it's public record, so you're going to see. Maybe a letter in the mail that looks like if you worked with me. It's going to look like it came from rate.

It may even say rate. It may say my name. It may even have my company address.  But it's just listed on that document to give it a sense of legitimacy so that you call, and very likely they're trying to sell you something else, an insurance policy, life insurance policy, whatever it may be. So just be aware of that.

 Other than that,  welcome home. We did it. We went through the full process of from the moment you decide you wanna buy a house to now enjoying your new home.

It's pretty straightforward. Took us two episodes to do it,  📍 but I hope you found this helpful and useful, especially if you are a first time home buyer and somebody entering into the market for the first time. I encourage you as well to reach out. I am here for you to help. If you have any questions or anything that I can do please reach out to me anytime. I'll look forward to talking to you guys again soon with an update on the market. In the meantime, have a great rest of your day and take good care.