UNDER CONTRACT: NOW WHAT?Congratulations, you are on your way to owning your Home!
Once we are Under Contract, we will send the contract and appropriate paperwork to your Lender and Title Co. Your Lender will work with you to determine the frame of your loan. This was discussed during the pre-approval process, but now we have an exact purchase price, settlement date (important for locking in your rate), and Seller concessions (if any). We have the complete picture of your transaction and will begin working towards our settlement date.
You wrote an Earnest Money Deposit check with submitted offer. The deposit check will be cashed at either our Brokerage, or 3rd Party title company. Assuming the sale goes through, this money will be applied to the settlement sheet and those costs that fall unto the Buyer. If for any reason the sale is not consummated, you may be entitled to receive all of your deposit back. In certain instances, the Seller may be able to retain this money as liquidated damages for failing to perform your duties as a Buyer. As a Buyer, you do have the right to pull out of the contract during an agreed upon inspection contingency period. If the home is not in acceptable condition, and you are within the agreed upon timeframe, you would be able to pull out and receive your Earnest
Money Deposit back.
The period that you are Under Contract is often 30-45 days. During this time, each item specified in the contract must be completed satisfactorily to both parties. There will be certain contingencies related to the transaction in the form of a Financing Contingency, and/or Home Inspection Contingency, and/or Home Sale Contingency, to name the most prominent ones.
The Financing contingency is an important one to the Buyer. Once the contract is signed, you have a period of time agreed to in the contract to secure financing. If you are unable to secure funding during the period of time granted to you by the contract (and the seller will not provide a written extension of time), you must decide whether you want to remove the contingency and hope for the loan commitment, or pull out of the contract inside the contingency timeframe.
During the transaction, the Title Company is reviewing the property for any marketable defects to the title, or outstanding liens on the property. Any defects or liens must be cured by the Seller in order to pass clear title to the Buyer. The title company is a third party to the transaction, helping both parties settle on the property with a clean title, no liens on the property, all taxes and pro-rations are balanced to the date of settlement.
Before settlement, you will need to secure Homeowner's (Hazard) Insurance. Due to such requirements such as special fire and hurricane insurance and sewer/septic backup protection, obtaining this insurance may require a lengthy period of time. You should apply for insurance as soon as you are under contract so you can explore all of your options.
Contact local utility companies to schedule to have service turned on when you close escrow. This is something you will do in the days leading up to settlement so we have an exact date to start/stop utilities.
Before we settle on the property, we will schedule the final walk-through inspection. At this time, you should make sure that the property is exactly as the contract says it should be. If the Buyer and Seller agreed to any repairs, the Seller must provide receipts of the agreed to work. During our walk-through, we will inspect the repairs to make sure they were done satisfactory.
We are now on our way to the Settlement table where you will sign the title and loan docs putting the home in your name. You will receive the keys from the Seller and the home is officially YOURS!