Contract to Close
So, you have a negotiated contract. What happens next?
Some of the major concerns of the sellers are answered below:
- Once you have accepted the offer, your home is marked with “ACTIVE OPTION”. During this time, you can show your property to other prospective buyers but you can’t accept any offer until your previous offer was withdrawn by the buyer.
- You shouldn’t be there during the home inspection. It’s a long process and the home inspector needs to be left alone to inspect the house. They need their privacy and they are professionals who know their jobs.
- Accepting the offer doesn’t mean that you take away the lockbox or keys of your main door. Once the offer is accepted, the home inspector and appraiser will be visiting your property for inspection. The buyer usually pay a final visit the property before the closing too.
- Packing should start right after the home appraisal results have been accepted by both the parties and there’s nothing left to negotiate.
- The contract closing date is tentative. Usually, conventional loans may take more than 45 days, so the closing date should be decided based upon that. Lenders tend to have a lengthy underwriting process and they have to look at lots of different things. It happens rarely that the close happens before the closing date otherwise, it’s usually around the closing date mentioned on the purchase contract.
- Closing dates are usually determined when you negotiate the contract. Sometimes these dates may be moved up or extended. Our staff will make sure to keep you informed so you know where to go, and what to take with you.
A pending sales agreement nearly always includes contingencies and special conditions that have to be fulfilled by the buyer and seller by the closing date, which usually falls 30 to 40 days after both parties signed the agreement.
Typical contingencies and conditions may include:
- The buyer’s securing of financing.
- An independent inspection of the home’s structural and functional condition (foundation, roof, electrical, heating, plumbing, etc.).
- A Title Search – an historical review of all legal documents relating to ownership of the property to ensure that there are no claims against the title of the property.
- The purchasing of Title Insurance in case the records contain errors or there are mistakes in the review process.
- A professional appraisal of the home, requested by the lender to ensure that the home’s actual value justifies the loan amount.
- Any additional contractual promises you have made in connection with buyer; such as repairs after the inspection
- An independent termite inspection.
- A final walk-through – the buyer is given the chance to look at the home to make sure that it’s in the same condition as when the sale agreement was signed.
It’s important to review the sales agreement with us so you understand your obligations. Any shortfalls or mistakes at this point can be very costly. We will discuss and remind you of these obligations throughout the transaction, as well as help arrange for their fulfillment and prepare you for the closing.
The buyers will schedule to get the home inspected by a private home inspector. Different offers have different timelines but usually, home inspection is conducted within 7-10 business days after you’ve accepted the offer. Typically, within 2-3 days of the inspection, the buyer will send you a response depending upon the home inspection report. We make sure to keep you informed about the inspection day and time and once the buyer sends his/her response, we contact you to discuss what the next step is.
The next step is dependent upon the buyer’s response. If according to the inspection report, the house is in a good condition and doesn’t have any deficiencies, then the seller isn’t entitled to do anything for the time being. But if the inspection report says that the house has deficiencies, the buyer might
- Ask you to repair some or all of the deficiencies
- Ask for a price reduction in lieu of repairs
- Exercise their termination option
Once an agreement has been reached, we move into the next phase of the transaction.
An appraisal on the property is ordered by the buyer’s lender. It usually takes 7-14 days. Again, if there isn’t any issue in the appraisal report, you can move ahead or you can revisit the options discussed above.
While different areas handle the final settlement in slightly different ways, generally the closing agent – a third-party professional, often an escrow agent at title company, who conducts the closing– reviews the sales agreement and does the following:
- Determines the total amount due from buyer and collects the check.
- Determines all the adjustments (e.g. seller prepayment of taxes, utilities, etc.) and ensures that they’re factored into the transaction.
- Assures that the transaction costs (closing, legal fees, etc.) are paid.
- Determines the seller’s payments, credits and adjusted net proceeds.
- Witnesses the seller’s signing of the property title and all other documentation associated with the transaction.
- Collects the keys and any other necessary items from the seller.
- Provides the seller with the net proceeds as well as copies of the documentation pertaining to the sale.
- Ensures that buyer’s title is properly recorded in the local records office along with any mortgage liens.
- In most cases, the buyer’s Possession Date will fall within 24 hours of the Closing Date.
Congratulations! You have now completed a successful home sale with the expertise and assistance of Tami Price Properties, Inc.! Remember to provide a positive review on Zillow and share your home selling experience us for others who are looking to utilize our services. Our business is built on referrals and the highest compliment you could ever give us is the referral of your family, friends and business associates!