Congratulations are in order! You and your agent’s hard work has paid off. You have a ready, willing and able buyer determined to purchase your home!
Once the final offer is accepted, both sides should sign the paperwork. Along with the buyer's 1% offer check, all signed disclosures (property condition, lead paint, possibly mold and foundation) and the loan approval letter are collected into one packet, along with the purchase agreement. This packet, the executed binder is then sent to both attorneys.
The wheels are now set in motion for a series of next steps to follow to get everyone to the closing table within typically 30 to 60 days.
During this time, your agent will switch the status of your home on MLS from ‘Active’ to “Continued to Show’, which designates your home can continue to be shown but has an accepted offer. I encourage my clients to allow buyers to continue to see their home during this time frame, as anything could happen and back up offers are always welcome!
Home Inspection
Your buyers will arrange for an inspection usually within 5 business days of the executed binder, paid for by them. The home inspection typically includes the building, radon and pests. Other items if featured in the home will be included, such as an inspection of the septic, private well, pool, tennis courts and any other structural features. The inspection will typically last 2-4 hours depending on the size of the home. Click HERE for a detailed description of how to prepare and what to expect from the inspection.
Contract Signed – Under Deposit
Once the binder has been executed, your attorney will draft the contract and forward it to the buyer’s attorney. Meanwhile, the inspections are completed and any repair requests are negotiated, agreed to and finalized in an addendum. This repair addendum is also forwarded to the buyer’s attorney for signing.
At the time of signing, your buyers will typically put up the full 10% deposit, made out your attorney’s escrow account. Contracts are then returned to your attorney for your final signing. Everyone’s goal is to move toward an executed contract, typically within 10 days of the executed binder to stay on track. This step switches your property to ‘Pending’ also called ‘Deposit’ and removes your home from being shown to other potential buyers.
Home Appraisal and Mortgage Contingency
If your buyers are paying cash, there is nothing to do except address any of the repairs required and start packing. However, more than likely your buyers are going to obtain a loan to purchase your property. Most transactions have a ‘mortgage contingency’ built into the binder and contract. This contingency states that if for some unforeseen reason the buyer cannot obtain financing, they are not bound to purchase your home and their deposit is returned.
In order for the lender to validate the sales price of the home (in case of default), they set up an appraisal. Depending on the size of the home and the lender, the appraisal might entail a home visit or it might just be a drone view, exterior only ‘drive by’ or computer validated appraisal. If there is a visit to the home, one of the agents should accompany the appraiser. We like to get this appraisal done within 2-3 weeks following the executed binder.
Once the appraisal is done, the loan team begins to request further documentation from the buyers to complete their underwriting process. At the final stage of the application, the buyers will obtain the lenders formal ‘commitment’ that the mortgage will be executed.
This is the last major hurdle and the seller’s attorney will be eagerly awaiting this letter so that the mortgage contingency is released.
The Home Stretch
By now there are only a few details remaining such as firming up the mutually agreed to closing date. You will confirm the date with your movers and be well into packing up your belongings. Your agent will provide a Moving Checklist for you to make sure you don’t miss small things such as postal forwarding and utilities cancellations.
On the night before or morning of the closing, your buyer's will do a final walk through of your home. The home should be 'broom swept' but I like to ask sellers to have it professionally cleaned as I am certain you would like the same courtesy for your new place. There should be nothing left in the home and the trash should have been collected or removed.
The Closing Table
The final closing is usually held at your attorney’s office and typically, this is done with the attorneys only. The buyers will have already met with their attorney and signed a plethora of documents earlier in the day for closing the loan and purchasing your house. You have signed your documents as well. The exchange of title and documents is done with the attorneys. You will likely get a phone call or email once everything is completed. Though this might seem a bit anticlimactic by now, don’t underestimate your accomplishments! Final congratulations are in order and time for celebration! Your new life chapter begins NOW!
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