Dear Heather: My offer was accepted subject to financing. Now what happens?

Having your offer accepted feels great, but for most home buyers it’s just the beginning. There is still a lot more to be done before you’re over the front door threshold. Here’s a rundown of what comes next:

1. Apply for a loan

Unless you’re paying in cash, you’ll need to apply for a mortgage loan for the actual property that you are hoping to buy. If you’re already preapproved, good for you. You should meet with at least two lending institutions and compare their loan options, terms and interest rates. Be prepared to ask questions, and be completely open with the lenders about your finances.

2. The sale and purchase agreement

Your agent will collect necessary information for the sale and purchase agreement, and will usually ask for a copy of your passports (given the varying degrees of citizenship in Bermuda!).

This will be sent to the vendor’s lawyer to review and then your lawyer to review. Your lawyer will discuss with you any agreed changes made, before the final copies are printed off (engrossed) for signature.

There will be a time frame for conditions, eg final approval of financing, structural survey, boundary staking (paid for by the vendor) etc, and a planning search and title search will be requested by your lawyer, which takes at least 30 days. So from the time your offer is accepted until closing is often six to eight weeks, sometimes more.

3. Home appraisal

The next step is getting your new home appraised.

Your lender will require your house be appraised by a qualified professional, who is usually chosen by the lender. The appraisal gives a detailed report on the value of the home.

If the home’s appraised value is less than the purchase price, you will need to either make a greater down payment or negotiate with the seller to lower the price. A lender won’t give you a loan for more than about 80 per cent of the appraised value.

4. Structural survey

A structural survey tells you if the home has any issues. Structural surveys aren’t required in Bermuda, but are sometimes done on older properties or fixer uppers and are paid for by the buyer.

This is your choice provided you’ve made it a condition in the contract. Go over the report in detail with the inspector to make sure you’re familiar with any problems, their severity, and the estimated cost to fix them.

5. Get your funds ready

Make sure the funds you need for the deposit (ten per cent of the accepted price) are available, and also any funds you are contributing to the closing costs are in reserve and are accessible. If you need to pull money from an investment, do it right away. Keep the paperwork for the transaction to show your lender you have liquidated funds for your down payment.

6. Find homeowners’ insurance

In most cases, buyers are expected to pay for homeowners’ insurance upfront as a condition of their financing, before closing. Shop around at several different insurance companies for the best rate. Your lender will need proof of insurance before approving your mortgage.

7. Final walk-through

Sometimes it is a good idea to do a final walk-through of your soon-to-be new home 48 hours or so before closing. This allows you to make sure any items that should be there, as per your contract, remain. It also lets you check the condition of the home to make sure no extra damages have occurred and makes sure there’s nothing different from what you agreed upon.

8. Closing

This is the day when you sign the mortgage documents and officially gain ownership of the property. It is usually done in your lawyer’s office, and your lawyer will provide you with the keys to your new home. You will need to bring ID and a cashier’s cheque for closing costs.

The above will help you learn the process ahead but don’t worry, your real estate agent will metaphorically hold your hand throughout the process, and will guide you through every step of the way.

• Heather Chilvers is among Coldwell Banker Bermuda Realty’s leading sales representatives. She has been working in real estate for 25 years. If you have a question for Heather, please contact her at hchilvers@brcl.bm or 332-1793. All questions will be answered confidentially.