Steps from Contract to Closing
OK - now that you have a Contract on your home what next?
First, make sure that your Contract is completely signed and initialed. Check to make sure that all pages have both the Buyer(s) and Seller(s) initials at the bottom, that any changes to the printed terms are initialed by both Buyer(s) and Seller(s), and that the Signatures are in place, and that the Contract has an Effective Date inserted in the propery place. Unless all of the above is true you may not actually have a valid contract.
Also, be sure to make sure that the above applies to any Amendments that are attached to the Contract of Sale/Purchase.
Now that the Contract is completed lets look at the duties of the Buyer and the Seller separately.
* * * * * * * * * * * * * * * * * BUYER DUTIES * * * * * * * * * * * * * * * * * * *
1) BUYER DUTY (if Agent represented): It is normally the responsibility of the Buyer's Agent to take a copy of the contract and the Earnest Money check to the Title company to start the Title process and to open an Escrow account. If the Buyer is not working with a Broker/Agent then I highly recommend that the Seller take responsibility for taking the contract and the earnest money to the Title company, rather than depending on the Buyer to do this important task.
2) BUYER DUTY: The Buyer will be responsible for contacting a Home Inspector and having the home inspection performed. This will be during the Option Period which is typically between 7 and 10 days from the Effective Date. The home inspection will typically be performed within 1 - 3 days from the date ordered by the Buyer and the Home Inspector will usually provide a written report not later than 24 hours after the inspection is completed.
The Home Inspection Report is paid for by the Buyer and is the property of the Buyer and the Seller has no 'right' to see the report. In most cases the Buyer will provide a partial or complete copy to the Seller at the time that the Buyer requests the Seller to perform repairs per the Inspection Report. Regardless of how new the home is some minor, or major, items of repair will be found by the Inspector. Remember, it is the job of the Inspector to find problems with the home and even brand new homes (especially new homes?) have faults that need to be corrected. Do not be surprised when the Buyer submits a Repair Amendment requesting that some or all of the found faults be fixed.
Remember that as the Seller you are not under any obligation to repair items and the Buyer is in the Option period and can back out of the contract without penalty at any time. Therefore, you are still negotiating for the sale of the property with the focus of the negotiations now centered on the repair items requested. There is not specific guideline to provide for this process other than to use common sense and to visit with your Agent for guidance.
3) BUYER DUTY: The Buyer will contact the Lender and apply for a loan on the purchase of the property. Usually the Buyer has already started the process and has some level of pre-approval in place and is now simply completing the process. In any event, the Buyer must immediately contact the Lender to keep from delaying the closing due to loan problems. The Buyer will typically have between 14 and 21 days to obtain a loan committment from a lender. The Third Party Financing Condition Addendum has a provision that the Buyer may abort the purchase and receive a return of Earnest Money if the Buyer is unable to obtain financing under terms not less favorable than the terms indicated in the Amendment, however, the Buyer must exercise this right within the time period indicated in the Amendment.
4) BUYER / LENDER DUTY: The Buyer's Lender will order an Appraisal of the property since the Lender is the entity with the risk of loss in the event of foreclosure in the future. The Lender will typically order the appraisal about one week from the contract effective date, or about the time of the end of the Option period.
* * * * * * * * * * * * * * * * * SELLER DUTIES * * * * * * * * * * * * * * * * * * *
1) SELLER DUTY: Send a copy of the existing Survey to the Buyer, the Buyer's Agent and the Title Company. If a new Survey is needed it is normal for the Buyer to pay for the new Survey, however, the cost of any new Survey can be negotiated within the contract to be the responsibility of the Seller or the Buyer. If the old Survey is not acceptable to the Title Company or the Lender then a new Survey must be ordered. If the Seller is responsible for this cost then the Seller must make sure that the new Survey is provided in a timely fashion.
2) SELLER DUTY: The Seller must provide access to the property to the Home Inspector, the Appraiser, and any other parties that are appropriately in need of access to the property. Normaly, the other parties who may need access are specialists for engineering and systems that the Home Inspector found some fault or potential fault with during the Inspection process. A list of such parties could include Foundation Engineers/Inspectors, Roof Inspectors, Electrical Contractors, HVAC Contrctors, and others who may be called upon by the Buyer to repair items found in need of repair during the Inspection of the property.
3) SELLER DUTY: The Seller must provide the Title Company with contact information for the current lien holder so that the Title Company can determine an accurate payoff amount for the loan as of the date of closing. The Title Company may need a variety of specific information and the Seller must provide all required information in a timely fashion to prevent problems that could delay the closing date.
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
Unless unexpectedc problems arise the above list of duties for the Buyer and Seller will be all that is required up until closing. Then both parties will schedule appointments to close with the Title Company and show up with valid legal identification of identity and any funds required in the form of money orders or cashiers checks.
If you have any questions or comments please contact Lee Thurburn at 972-470-5888.
First, make sure that your Contract is completely signed and initialed. Check to make sure that all pages have both the Buyer(s) and Seller(s) initials at the bottom, that any changes to the printed terms are initialed by both Buyer(s) and Seller(s), and that the Signatures are in place, and that the Contract has an Effective Date inserted in the propery place. Unless all of the above is true you may not actually have a valid contract.
Also, be sure to make sure that the above applies to any Amendments that are attached to the Contract of Sale/Purchase.
Now that the Contract is completed lets look at the duties of the Buyer and the Seller separately.
* * * * * * * * * * * * * * * * * BUYER DUTIES * * * * * * * * * * * * * * * * * * *
1) BUYER DUTY (if Agent represented): It is normally the responsibility of the Buyer's Agent to take a copy of the contract and the Earnest Money check to the Title company to start the Title process and to open an Escrow account. If the Buyer is not working with a Broker/Agent then I highly recommend that the Seller take responsibility for taking the contract and the earnest money to the Title company, rather than depending on the Buyer to do this important task.
2) BUYER DUTY: The Buyer will be responsible for contacting a Home Inspector and having the home inspection performed. This will be during the Option Period which is typically between 7 and 10 days from the Effective Date. The home inspection will typically be performed within 1 - 3 days from the date ordered by the Buyer and the Home Inspector will usually provide a written report not later than 24 hours after the inspection is completed.
The Home Inspection Report is paid for by the Buyer and is the property of the Buyer and the Seller has no 'right' to see the report. In most cases the Buyer will provide a partial or complete copy to the Seller at the time that the Buyer requests the Seller to perform repairs per the Inspection Report. Regardless of how new the home is some minor, or major, items of repair will be found by the Inspector. Remember, it is the job of the Inspector to find problems with the home and even brand new homes (especially new homes?) have faults that need to be corrected. Do not be surprised when the Buyer submits a Repair Amendment requesting that some or all of the found faults be fixed.
Remember that as the Seller you are not under any obligation to repair items and the Buyer is in the Option period and can back out of the contract without penalty at any time. Therefore, you are still negotiating for the sale of the property with the focus of the negotiations now centered on the repair items requested. There is not specific guideline to provide for this process other than to use common sense and to visit with your Agent for guidance.
3) BUYER DUTY: The Buyer will contact the Lender and apply for a loan on the purchase of the property. Usually the Buyer has already started the process and has some level of pre-approval in place and is now simply completing the process. In any event, the Buyer must immediately contact the Lender to keep from delaying the closing due to loan problems. The Buyer will typically have between 14 and 21 days to obtain a loan committment from a lender. The Third Party Financing Condition Addendum has a provision that the Buyer may abort the purchase and receive a return of Earnest Money if the Buyer is unable to obtain financing under terms not less favorable than the terms indicated in the Amendment, however, the Buyer must exercise this right within the time period indicated in the Amendment.
4) BUYER / LENDER DUTY: The Buyer's Lender will order an Appraisal of the property since the Lender is the entity with the risk of loss in the event of foreclosure in the future. The Lender will typically order the appraisal about one week from the contract effective date, or about the time of the end of the Option period.
* * * * * * * * * * * * * * * * * SELLER DUTIES * * * * * * * * * * * * * * * * * * *
1) SELLER DUTY: Send a copy of the existing Survey to the Buyer, the Buyer's Agent and the Title Company. If a new Survey is needed it is normal for the Buyer to pay for the new Survey, however, the cost of any new Survey can be negotiated within the contract to be the responsibility of the Seller or the Buyer. If the old Survey is not acceptable to the Title Company or the Lender then a new Survey must be ordered. If the Seller is responsible for this cost then the Seller must make sure that the new Survey is provided in a timely fashion.
2) SELLER DUTY: The Seller must provide access to the property to the Home Inspector, the Appraiser, and any other parties that are appropriately in need of access to the property. Normaly, the other parties who may need access are specialists for engineering and systems that the Home Inspector found some fault or potential fault with during the Inspection process. A list of such parties could include Foundation Engineers/Inspectors, Roof Inspectors, Electrical Contractors, HVAC Contrctors, and others who may be called upon by the Buyer to repair items found in need of repair during the Inspection of the property.
3) SELLER DUTY: The Seller must provide the Title Company with contact information for the current lien holder so that the Title Company can determine an accurate payoff amount for the loan as of the date of closing. The Title Company may need a variety of specific information and the Seller must provide all required information in a timely fashion to prevent problems that could delay the closing date.
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
Unless unexpectedc problems arise the above list of duties for the Buyer and Seller will be all that is required up until closing. Then both parties will schedule appointments to close with the Title Company and show up with valid legal identification of identity and any funds required in the form of money orders or cashiers checks.
If you have any questions or comments please contact Lee Thurburn at 972-470-5888.
posted by DallasFlatFee at 6:35 AM
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