Next Steps
Whether selling or buying, going ‘under contract’ is a big step along the way to reaching your goals. Here are some key terms to understand as go from contract to the closing table.
DATES
Place a reminder of important dates in your personal calendar. What day does due diligence expire? What day is the financing contingency up? When should you begin packing? Don’t forget to schedule time off to attend the closing.
There are lots of moving parts to get from contract to closing, it’s important that you plan ahead. As always, rely on your Path & Post specialist to guide you through any confusion or concerns you may have along the path.
FINANCING
The buyer is responsible for most of the work during the loan process and should provide documents and information requested by the lender in a timely manner. However, some loans require sellers to make repairs prior to final approval. Buyers should not make any other large purchases (cars, boats, etc…) while in the process of buying a home. An appraisal is a key part of the loan process and does not require the seller to be home to complete the evaluation.
INSPECTIONS
It is common for inspectors to find items that need maintenance on the property because no house is perfect. Most repairs or replacements are addressed via Amendment to Agreement and typically require the seller to have work performed in a workmanlike manner prior to closing. Often in the inspection and repair negotiation stage, a buyer and seller will negotiate money instead of repairs, applied to the closing costs or sales price.
CLOSING
Closings take place at a Closing Attorney’s office. Typically, the attorney represents the Lender. Buyer should schedule a final walk-through to confirm repairs and final clean are completed by the seller prior to closing. Path & Post agent will confirm the lender documents and instructions have been sent to the closing attorney. Buyer and Seller should review a copy of the Closing Disclosure. Buyer should arrange to wire transfer the money to the closing attorney. Seller may arrange to receive funds as a wire transfer or check.
Important Terms
Whether selling or buying, going ‘under contract’ is a big step along the way to reaching your goals. Here are some key terms to understand as go from contract to the closing table.
DUE DILIGENCE
During this period, the buyer can perform any inspections and may seek to negotiate an amendment to the agreement. Buyer also has the right to terminate the contract during due diligence and receive a full refund of all Earnest Money. Seller may continue to show the property and solicit back-up offers.
INSPECTIONS
Buyer, at Buyer’s expense and risk, may inspect, examine, test and/or survey the property and surrounding neighborhood conditions.
SPECIAL STIPULATIONS
Requests made by either party that must be met or removed prior to moving forward.
FINANCE CONTINGENCY
Often times Buyers request a period of time to finalize all financing details prior to closing. Buyer may terminate during this time without penalty by providing a Loan Denial Letter.
APPRAISAL
Lenders typically require an appraisal of the property prior to loan approval. Buyer has the right to submit an Amendment to Reduce Sales Price, if the appraised value is less than the purchase price.
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We create these guides to help prepare you for each step of the journey. However, we are always happy to answer any questions and talk through any topics. Just reach out!