Closing on a House Checklist: 6 Things Home Buyers Must Do Before They Move In

When you're a first-time home buyer approaching the finish line in the journey to your new home, you want nothing to go wrong, right?

That’s why we’ve put together a home closing checklist, which outlines your action points in those few days leading up to settlement. Keep this closing process list handy to know you've done what you need to in order to close the deal.

1. Get all contingencies squared away

Most purchase agreements have contingencies—things that buyers must do before the real estate transaction is official, explains Jimmy Branham, a Coral Springs, FL, real estate agent at the Keyes Company. These are the most common contingencies that are part of your new home closing process:

Home inspection contingency: This gives buyers the right to have the home professionally inspected. If something is wrong, you can request that it be fixed—or you can back out of the sale. It’s rarely advisable to waive an inspection contingency. Although the average home inspection costs $300 to $500, it’s a drop in the bucket considering the costly home issues you might uncover, says Claude McGavic, executive director of the National Association of Home Inspectors.

• Appraisal contingency: With this contingency, a third party hired by your mortgage lender evaluates the fair market value of the home. If the appraised value is less than the sale price, the contingency enables you to back out of the deal without forfeiting your earnest money deposit, says Bishoi Nageh, president of the Petra Cephas Team at Mortgage Network Solutions, in Somerset, NJ.

• Financing contingency: This contingency gives you the right to back out of the deal if your mortgage approval falls through. You have a specified time period, as stated in the sales contract, during which you have to obtain a loan that will cover the mortgage.

2. Clear the title

When you buy a home, you “take title” to the property and establish legal ownership—a process that’s confirmed by local public land records. As part of the closing process, your mortgage lender will require a title search, and you'll need to purchase title insurance to protect you from legal claims to the house.

Sometimes distant relatives—or an ex-spouse—may surface with a claim that they actually own the home, and that the seller had no right to sell it to you in the first place. But clearing title will ensure this doesn’t happen, says Marc Israel, president and chief counsel of MiT National Land Services, a title company in New York City.

As the home buyer of this piece of real estate, you’re entitled to choose the title company. You can get recommendations from your real estate agent, mortgage lender, and friends—just be sure to check out the license and reputation of each company online.

3. Get final mortgage approval

You've made that down payment, but before you can go to the closing table, your home loan must go through the underwriting process. Underwriters are like real estate detectives—it’s their job to make sure you've represented yourself and your finances truthfully, and that you haven’t made any false or misleading claims on your loan application.

The underwriter—employed by your mortgage company—will check your credit score, review your home appraisal, and ensure that your financial portfolio has remained the same since you were pre-approved for the loan.

Since underwriting typically happens shortly before closing, you don’t want to do anything while you’re in contract that’s going to hurt your credit score. That includes making a down payment on a car, boat, or similar large purchase that has to be financed.

4. Review your closing disclosure

If you're getting a loan, one of the best ways to prepare is to thoroughly review your closing disclosure, also known as a HUD-1 settlement statement.

This official document outlines your exact mortgage payments, the loan’s terms (e.g., the interest rate and duration), and additional fees you’ll pay, called closing costs (which account for anywhere from 2% to 7% of your home’s price).

You’ll want to compare your closing disclosure to the loan estimate your lender gave you at the outset. If you spot any discrepancies, ask your lender to explain them.

5. Do a final walk-through

Most sales contracts allow buyers to do a walk-through of the home within 24 hours before closing. During this stage, you're making sure the previous owner has vacated (unless you’ve allowed a rent-back arrangement in which they can stick around for a period of time before moving).

You’re also double-checking that the home is in the condition agreed upon in the contract. If your home inspection revealed problems that the sellers had agreed to fix, you’ll want to make sure those repairs were made.

6. Bring the necessary documentation to closing

Make sure you have the following items when you head to the closing table:

• Proof of homeowners insurance

• A copy of your contract with the seller

• Your home inspection reports

• Any paperwork the bank required to approve your loan

• A government-issued photo ID (Note to newlyweds who just changed their name: The ID needs to match the name that will appear on the property’s title and mortgage.)

Plan to sign a ton of paperwork. An attorney or settlement agent will guide you through the process. When you’re done, you’ll collect the keys, and you're finally home free!

To read more, go to Realtor.com.

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• Here's how much money you should have saved at every age

• Arkansas Will Give You $10,000 and a Mountain Bike to Move There

The Future of Fair Housing with John Legend

Speaking at NAR's annual conference, the musician and civil rights champion said there are 'more pressing' fair housing issues than the term 'master bedroom'.

Earlier this year, Grammy Award-winning musician and civil rights champion John Legend took Realtors to task for focusing on what he called a “fake problem” — the term “master bedroom” — rather than a real problem: housing discrimination.

On Wednesday, Legend spoke on the last day of the National Association of Realtors annual conference, the Realtors Conference and Expo, in a general session called “The Future of Fair Housing with John Legend.” The National Civil Rights Museum awarded Legend its Freedom Award last year for his philanthropic and artistic contributions to civil rights causes.

The session, attended virtually by thousands of Realtors, was closed to press, which NAR indicated was at Legend’s request. The trade group later sent out a press release with some of Legend’s remarks.

In speaking with NAR President Vince Malta and Vice President of Association Affairs Mabél Guzmán, Legend touched on issues that contribute to lingering racial homeownership gaps, which he said have led to a white-black wealth gap of around 10-1, according to the release. He once again challenged Realtors “to promote meaningful change and help put an end to systemic housing inequities,” the release said.

“As you all know, in America, the most common way that folks build wealth is through homeownership. So, for us to understand this huge and persistent wealth gap … we have to talk about housing discrimination, its history and what we can do about it now,” he said.

As many panelists have done throughout the conference, Legend mentioned Richard Rothstein’s book on redlining, The Color of Law, and Newsday’s groundbreaking, three-year investigation of agent discrimination in Long Island’s housing market, which Legend has tweeted is “a real, persistent problem in the industry.”

“I’m not the true expert on this issue, but Richard Rothstein wrote a really exhaustive history [of housing discrimination]. If you read the book, you’ll realize that a lot of folks played a role in this happening. It’s not accurate or fair to single out your industry as the culprits, but [Realtors] have played a role in it historically and we still have issues like steering, where certain buyers aren’t being shown all the houses that they qualify for,” Legend said.

He told conference attendees that getting rid of housing discrimination will require difficult conversations and will depend on Realtors being intentional in their efforts to promote equity and fair housing, according to NAR.

“Hold yourselves accountable and hold your colleagues accountable,” he said. “We all need to do better. That won’t erase centuries of discrimination, but it will at least make sure that your industry is playing a role … in making this nation more just, fair and equal for everybody.”

The term “master bedroom” only came up briefly during the discussion “in the context of how [Legend] felt there were more pressing issues that impacted fair housing,” a NAR spokesperson told Inman via email.

The term has caused disagreements at the local level. At REcolorado, Colorado’s largest MLS, for example, broker Stacie Staub last month asked the MLS’s leadership to overturn a committee decision to not change the term in the MLS’s back-end database.

“It’s literally the easiest thing we can do. Small steps are the only way to complete long journeys and Fair Housing in Real Estate has a long way to go. While this issue is a bare-minimum endeavor, let’s not use our energy to specifically oppose it either, as it could be done by now,” she said in a blog post.

For its part, REcolorado says that it converted its Matrix database earlier this year to be compliant with standards from the Real Estate Standards Organization (RESO) and that conversion involved carrying data field names through “from the database level to the user-facing interface,” according to spokesperson Deborah Shipley.

“Our MLS Rules and Regulations committee did discuss changing the term ‘master,’ however; they decided to continue to take guidance from RESO as well as Bryan Greene, Director of Fair Housing Policy at NAR, and HUD. Because those entities are still discussing the topic, we aren’t making any changes at this time either,” she said.

At a conference session for multiple listing service and association executives two weeks ago, Greene made clear that the term did not violate the Fair Housing Act. Changing the term because it might offend based on race or gender is “fine,” but it’s not a Fair Housing Act issue, he said.

“That architectural term, if it does, in fact, offend people, and I’ve never never met anyone personally whom it offends, it does not violate the Fair Housing Act. HUD, who enforces the Fair Housing Act, has made clear that it doesn’t violate the Fair Housing Act,” he said.

The Fair Housing Act is not concerned with whether someone might find a phrase offensive, but rather if someone reading an advertisement for a home promoting the master bedroom would conclude from that ad that they should not apply or try to buy that home, according to Greene.

“You know, ‘We don’t want your kind here’ — that term ‘master bedroom’ does not communicate that to any reasonable person. HUD said that back in the ’90s. I said it again this year,” said Greene, who worked for HUD for 11 years before joining NAR last year.

“No one’s use of that term would ever be found by HUD, and almost certainly not by any federal judge, to deny someone housing,” he added.

In Wednesday’s release, NAR said it had intensified its efforts to support fair housing after the Newsday report came out last year. The trade group debuted a fair housing plan, ACT, in January and released an implicit bias training video in July that aims to help agents recognize biases that “persist despite best intentions and often without conscious awareness.”

Last week, the trade group passed controversial changes to its professional standards to crack down on racist and discriminatory speech and behavior as well as new standards for its local associations and multiple listing services that require certain fair housing components.

“NAR continues to rectify its past mistakes and to position our members to lead this nation’s fight for more inclusive neighborhoods and equitable housing policy into the future,” Malta said in a statement.

He continued, “From unveiling new interactive training platforms to developing resources on how unconscious bias can affect real estate transactions, NAR’s active role in this fight underscores the importance of fair housing to our 1.4 million Realtors and our larger society.”

BY ANDREA V. BRAMBILA | Staff Writer for Inman News.

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Here's how much money you should have saved at every age

If you make a hundred bucks, the saying goes, you'll probably need to spend at least $50 of it on survival — rent, groceries, heating your house. Then, $30 can go to the fun stuff, things like seeing friends or buying gifts for your family. 

And as for the final $20? You should probably tuck it away for a rainy day or retirement. That's based on the 50-30-20 rule, a common rule of thumb that tries to get within shooting distance of what you'll need to cover expenses in your golden years. Estimating how long you'll live, after all, is an imprecise art, and everyone has different incomes, tastes and spending habits. 

The figure is also probably a bit aspirational. Many Americans would have trouble saving 20% of what they make — roughly 11 million use up the entirety of that 50% survival figure on rent alone, to say nothing of food and other necessities. Flat wages plus rising living expenses is one possible explanation for why 69% of Americans have less than $1,000 in their savings account.

Still, even if 20% savings might seem out of reach, financial planners are not pulling that number out of nowhere: Research suggests that as a golden rule it comes pretty close to ballparking what a 25-year-old making $40,000 would need to save annually to retire comfortably by age 67: about 22%.

There's an important caveat there, especially if you're in your 20s — odds are, you'll probably work a little beyond age 67. That's especially true if you can save only the minimum amount financial planners suggest, around 10%.

But don't stress! Just by thinking about these questions, you are already ahead of the curve. Here's a little primer to help you figure out exactly where you stand — and how much you need to beef up your savings game.

How much money to have saved by age 20

Here's a more uplifting tip: The earlier you start saving, the less you need to save each month — and it's super smart to start putting away cash long before you take your first full-time job. We're talking babysitting money, or even that high school graduation check that you're not sure what to do with.

If you have anything at all in the bank by age 20, bravo. You're in good shape.

Consider putting that cash into a Roth IRA. Individual retirement accounts can easily follow you regardless of your career ups and downs, and with a Roth account, the money gets taxed going in as opposed to when you take it out.

Translation? It's an ideal way for a broke-ass college student to start their nest egg, since odds are you'll be in a higher tax bracket 40 or 50 years from now, when you're ready to start taking the money out.

How much money to have saved by age 25

As you get deeper into your 20s, you should shoot to have about one quarter of your annual cash (25% of your gross pay) saved up, according to a spokeswoman for the budgeting app Mint. That means that the typical 25-year old might want to have somewhere around $10,000 in savings. 

Curious about where you stand? 

Averages for 20-somethings range widely: One median figure suggests young people have about $16,000 saved for retirement, according to a 2015 study by Transamerica. But other research has suggested the true figure may be lower. A Wall Street Journal analysis of savers aged 25 to 34 found that the median account had only $13,500 saved, and that more than half of millennials didn't have a retirement account at all. 

In other words, something is still better than nothing. 

How much money to have saved by age 30

Once you're 30, figuring out a hard number gets a little trickier, since the stakes are a little higher. Fidelity suggests that by 30 you should have saved about one times your annual salary saved. 

The median income for 29-year-olds is roughly $35,000 per year, according to the Atlantic, which means that by 30 you would ideally have about that stashed away — though of course there will be exceptions, especially if you've gotten an expensive graduate degree that took you out of the workforce.

Other income readings suggest you should probably have saved up even more: According to the Bureau of Labor Statistics, the median weekly earnings for U.S. workers aged 25 to 34 would amount to about $40,000 annually.

How much money to have saved by age 35

Your 30s is when the push to save for retirement heats up: Data from a 2015 New York Federal Reserve report suggests that this decade is when your earnings really start to ramp higher. By the time your 30s are over, odds are you're within $1,000 of your peak salary. 

So it's time to get serious: Fidelity suggests you have about two times your annual salary saved by age 35.

If you earn the median weekly wage for a 35 to 44 year old, you might make close to $50,000 — which means you probably want about $100,000 saved.

How much money to have saved by age 40

Your 40s are when your finances start to get a lot more complicated, which is why it's also the age where it's increasingly helpful to consider paying a professional to help you make a plan and stay on track.

On the flip side, if you've been hitting the goals so far, by now you've built up pretty consistent savings habits, which means you might not have to depart too much from what you're already doing. 

A common benchmark for age 40, according to Fidelity, is to try and save three times your current annual salary, which could mean about $150,000. 

How much money to have saved by age 45

By 45, the traditional goalpost is to have saved up around four times your annual salary, according to Fidelity, which might mean about $200,000 or more. Alas, again, even that number might be far too low for you — and depends on the standard of living you hope to maintain in retirement.

Remember that this is the point in life when Fed data suggests you should stop expecting major salary increases down the line. 

Therefore, you truly need to be saving as much as you can. If you haven't already, consider opening up multiple retirement accounts.

When does it ever stop?

How much you need to save depends on when and how you want to retire. To sustain your quality of life, you'll likely need between eight and 11 times your annual pay by retirement, not counting Social Security.

Some estimates suggest that people may need between $1 million and $2 million dollars by old age — though again, it will depend on your lifestyle.

If you learn to live on less, you may need less. But if you want to be in true ship-shape, keep in mind estimated goals for your age group. The estimates really do range — so don't get too hung up on dollar amounts — but do understand the rules of thumb enough to stay on track.

Remember: Saving is more achievable than you may realize; the sooner you start, the easier it will be. You might even get to retire early.

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If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.

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Builder confidence reaches 35-year high in November

But the state of the lumber market and availability of land may not be able to keep up

The National Association of Home Builders and Wells Fargo Housing Market Index, measuring builder confidence, rose five points to 90 in November – the highest score the series has ever recorded since its inception 35 years ago and the third month in its history the score broke 80. Based on a scale from zero to 100, the index gauges builder perceptions of current single-family home sales and sales expectations for the coming six months.

In November, all HMI indices, including current sales conditions, sales expectations and traffic of prospective buyers posted their highest readings ever, the release said. In fact, current sales conditions jumped all the way to 96 – a nearly perfect score.

Regionally, the West showed the greatest promise, with builder confidence in the three-month moving averages jumping up four points to 96. The South also climbed four points to 86, while the Northeast gained two points to 83. The Midwest increased six points to 75, however, regional confidence gains slowed for the third month in a row since August’s double-digit spikes as builder confidence levels near their upper limit.

It’s important to note, 69% of November’s responses were received before the presidential election was called on Nov. 7. According to the NAHB, the election results, and their future impacts on housing market conditions, will be more fully reflected in December’s HMI report.

“Another record high for the HMI reflects that housing is a bright spot for the economy,” said NAHB chief economist Robert Dietz. “However, affordability remains an ongoing concern, as construction costs continue to rise and interest rates are expected to move higher as more positive news emerges on the coronavirus vaccine front.

“In the short run, the shift of housing demand to lower density markets such as suburbs and exurbs with ongoing low resale inventory levels is supporting demand for home building,” Dietz said.

That ongoing suburban shift, coupled with record low interest rates and favorable demographics, is exactly what spurred such an influx of demand and pushed new home sales up 17% year-over-year, NAHB chairman Chuck Fowke said.

“Though builders continue to sign sales contracts at a solid pace, lot and material availability is holding back some building activity. Looking ahead to next year, regulatory policy risk will be a key concern given these supply-side constraints.”

According to National Association of Realtors Chief Economist Lawrence Yun, median home prices are rising “much too fast” and suggests transforming raw land into developable lots and new supply are clearly needed to help tame the home price growth.

But it’s not just availability of land that’s causing the pressure. An October report from the NAHB revealed because of the spike over the last several months, lumber prices have soared 120% since mid-April, but are down 20% since mid-September. The Bureau of Labor Statistics estimates roughly $16,000 has been added to the price of a typical new single-family home because of the lumber price increase.

On Oct. 20, the NAHB, along with 100 members of Congress, sent a letter to President Donald Trump that asked the administration “to bring all stakeholders to the table and work to find a solution to address lumber scarcity and subsequent price spikes that ensures everyone’s needs are met.”

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If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.

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Arkansas Will Give You $10,000 and a Mountain Bike to Move There

Online applications are open now for those interested in making the move.

There are plenty of places to live outside of the world’s biggest and sometimes most overpopulated cities. Luckily, it seems like several towns and smaller metropolises are vying for the attention of those willing to make a move. Last year, Tulsa, Oklahoma offered to pay remote workers to relocate there, while Topeka, Kansas launched a similar initiative this year. Then, there’s those picturesque Italian villages auctioning off one-euro homes to draw people in.

Now, yet another place joins the ranks of those offering to pay you big bucks to pick up and move there: Northwest Arkansas.

The newly announced Life Works Here initiative is attracting new residents to Northwest Arkansas by offering them $10,000 to move there. They’re also throwing in a street or mountain bike with the deal, allowing new residents to easily explore the area’s 162 miles of paved trails and 322 miles of mountain biking trails. If biking is not your thing, you can opt for an annual membership to one of the local cultural institutions instead, like the Crystal Bridges Museum of American Art.

Northwest Arkansas is already rated as one of the best places to live in the U.S. thanks to its low cost of living, outdoor activities, world-class arts institutions, and a per-capita income that’s 14% higher than the national average. Now, it's ready to share those perks with more people, especially the nation’s top talent, as well as remote workers.

“Northwest Arkansas has one of the fastest growing economies in the country, but we must increase our STEAM and entrepreneurial talent to ensure economic growth in the future,” Nelson Peacock, president and CEO of the Northwest Arkansas Council, told Forbes. There are more than 10,000 job openings right now and a shortage of people to fill available STEAM jobs, Peacock added.

With new trends pointing towards many Americans leaving major cities, especially during the pandemic, Northwest Arkansas had various recruiting efforts in place long before this year. The added incentive of $10,000 is just an attention grabber, and it won’t last forever.

“Right now we know a lot of people are re-evaluating their priorities and their lifestyle,” he told Forbes. “We are seizing the opportunity to capture attention at this time when many employers have extended work from home opportunities and employees — knowing they can work from anywhere — are reconsidering where they are living and what they are prioritizing.”

For more information on the program and to submit your application, visit the Northwest Arkansas website.

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If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.

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