Contract To Close
Your home has been on the market and we have received an offer that we have ACCEPTED! Now what? Since you are the Seller, you have it easy and not too much to do.
If we will be purchasing a new home for you, now we get serious and start making appointments to look for your new home.
The Buyer will deposit the earnest money with the Title Company and the Title Company will “open title” and begin obtaining the Title Commitment. If they find any liens or judgments on the Title Commitment, we will have to address those. If they are actually yours, they will have to be resolved/paid when we close the home or we cannot close. If they are not, we will provide that proof and they will be removed. Once we are pass our option period, we breathe a little easier.
You will receive a check in the mail for the option fee – cash it – its yours to keep. The Buyer has a specified numbers of days (normally 7-10 days) to have their inspections completed and negotiated. If we come to an agreement on any repairs, we move forward. If we do not, the Buyer will terminate the contract and we seek a new Buyer. Remember, the Buyer can terminate the contract for ANY reason during the option period – so we are cautious during this period. Keep the receipts to any repairs made as we will need to provide those to the Buyer. Please make sure all utilities are on for the inspections – even if the home is vacant.
The Buyer’s lender will schedule an appraiser to come out and appraise the home. The appraisal must be at least the sales price of the home. If it’s not, there are two options. Either the Seller reduces the price to the appraised value, or the Buyer makes up the difference. If we appraise low and do not come to an agreement, the Buyer will terminate the contract and we start looking for a new Buyer. The lender will only lend on the appraised value of the home. If the Buyer has an FHA loan, that appraisal will stick with the home for six months. This is why listing your home at MARKET VALUE is crucial – we want to avoid any appraisal problems at this point.
If not already provided by the Seller, a survey will need to be done on the property to ensure the boundaries are correct. The survey will be ordered by the title company or the buyer.
The Lender is doing all the work to get the file ready to submit to underwriting and we are waiting on those THREE very special words – CLEAR TO CLOSE! This means the Lender has all the documentation they need and we have a green light to set the closing of the home.
The Lender prepares the Closing Disclosure (previously known as HUD) which is a line by line detailed itemization of all fees being paid for by the Seller and Buyer. You will receive a copy 3 days before closing. It will advise you of the amount of proceeds you will receive from the sale of your home. You may receive a check or they can wire it directly to your account so the funds are available immediately.
Its closing day! The Buyer will do a walk through of the home to ensure all agreed upon repairs were done and that the home is in clean and presentable condition. The closing will take place at the Title Company. The address to the Title Company is at the top of Page 2 on your contract. Closings normally take about an hour total for both parties, but only about 15 minutes for the Seller.
Step #9: Warranty
Funding takes place once all documentation is signed and reviewed by the Lender. This can take 20 minutes or a few hours – the Buyer will not be allowed to have keys to the home until the transaction has FUNDED. Note – you must be completely out of your home by the time we close unless a lease back agreement has been made with the Buyer.
Coordinating movers, children, pets, etc can be very challenging. Often closing dates are moved because of various reasons – mostly because of the lending aspect of the sale. We try very hard to keep dates firm, but sometimes that is not possible. Please keep that in mind when scheduling appointments.
If you are purchasing another home, we will attempt a “double close” which means close on the sale of your home in the morning, then close on the sale of the home you are purchasing in the afternoon. Again, this takes a lot of coordination along with aligning the moon and stars!