Contract to Close - What to Expect

Contract to Closing What to Expect Next

Compliments of : Jannine Osborne, REALTOR速 TEXAS LIVING AT THE GULF COAST jannineo@yahoo.com 361.688.0067

Š2014 by the author of this e-book Jannine Osborne, REALTORŽ.

The e-book/brochure author retains sole copyright to her contributions to this material.

This material is based upon information which we consider reliable, but because it has been supplied by third parties, we cannot represent that it is accurate or complete, and it should not be relied upon as such.

This offering is subject to errors, omissions and changes including price or withdrawal without notice.

Silver Sands Realty. All Rights Reserved. An Equal Opportunity Company. Equal Housing Opportunity. If your property is listed with a real estate broker, please disregard. It is not our intention to solicit the offerings of other real estate brokers. We are happy to work with them and cooperate fully.

Contract to Close

Congratulations! We have a contract.

Now what?

We have several dates in your contract that we must adhere to. First date to keep is your contract’s Execution Date. 1 This is the date that drives all other time frames that your contract is based on. The execution date is the day the Title Company acknowledged the receipt of the earnest money.

From this date, your Option Period has begun.

2

Tick tock. We have to get our business done in the time frame specified in the contract.

Our primary goal during the option period is: - Interview and hire a general licensed property inspector - Coordinate inspection day and time - Review inspection report - If necessary, present an “Amendment” to the contract to ask seller for repairs - Receive a response for seller about the requests in the “Amendment” The Option Period is a period of time that you have “purchased” which gives you the unrestricted right to terminate the contract for any reason.

In most cases, you would only exercise your right to terminate if you and the seller cannot agree on repair issues. The seller does not have the right to terminate the contract. This is a block of time you have purchased.

Note to self: the other tasks that cost you $$$ (Appraisal, Termite Inspection, Survey) we will not order until AFTER the option period has been waived.

Jannine Osborne, REALTOR® 361.688.0067 call or text

Texas Living at the Gulf Coast

Contract to Close

You need to hire the inspector. By law, I can’t do this for you.

Be sure to check out “the” list.

Your inspector will provide a copy of the inspection report. (Please be sure to give him permission to also provide a copy to me.) Once we review, we will determine if there are any repairs that we feel are necessary for the seller to repair.

You can expect, depending on the size of the home, to spend a minimum of three hours at the property with your inspector of choice. TREC licenses the inspector and has many points for him to cover. You are welcome to be present. It can provide an excellent opportunity for you to really get to know all aspects of your future home.

In most cases, we will be able to determine from the report any issues that may become Lender Required Repairs. Please keep in mind there is n-o g-u-a-r-a-n-t-e-e that there will or will not be Lender Required Repairs.

The deal is…

Your option money (that check you wrote to the seller to purchase your option period) will be returned to you (most likely) at the closing table if you do not exercise your option to terminate. If you and the seller do not agree on repair issues or for any other reason you decide to exercise your option, you forfeit the money/check that purchased the Option Period.

While the clock is ticking on the Option Period, you also need to get busy with your lender.

Another time sensitive item within the contract is Third Party Financing Addendum , which you have to get your full loan approval.

3 On the Third Party Financing Addendum, you have committed to the seller that you will expedite your loan process and achieve full approval within time stated. This is very important as you will $acrafice your Earnest Money if you neglect the time line and do not report in writing to the seller that you are unable to secure your loan. NOTE: You have 3 days from date of execution to get your earnest money to the title company.

Jannine Osborne, REALTOR® 361.688.0067 call or text

Contract to Close

Next , the appraisal.

Once the option period has been waived and your loan process is underway (yeah!), the lender can order the property’s appraisal. Again, we are most likely not going to order the other items such as Termite Inspection, Surveyor or repairs until we have the opportunity to review the final Appraisal Report.

Why? As stated in the contract, if an agreement was not made in writing in reference to any possible Lender Required Repairs then neither party is required to fix those repairs.

Even though your option period has been waved and most likely we have been able to identify any likely lender required repairs, there is no guarantee that there won’t be lender required repairs. These are repairs that the lender will require to be fixed prior to granting the loan.

Ahhh, two different things?

Inspection Report vs. the Appraisal Your property inspection and your appraisal inspection are two different things! Who knew? The appraiser is hired by your lender. Your property inspector is hired by you.

They do not interact or share information.

The appraiser, hired by the bank, also provides a property inspection. They basically walk through the property and notate any obvious detriments to the home such as: rotted wood, holes in walls or obvious damages to the roof. Neither your inspector or the appraiser will notate anything that is decorative/fixture. Only items that are detrimental to the property or may be dangerous to habitants.

OK. Where are we?

The appraisal will determine the property’s Fair Market Value and solidify our contract price. It is our hope that the property appraises because the seller does not have to lower his price. He could refuse to sell at a lower appraised price and therefore the contract would terminate and you would get your Earnest Money returned. If the appraisal comes back higher than the contract price, the seller cannot raise the sale price.

Jannine Osborne, REALTOR® 361.688.0067 call or text

Contract to Close

Moving forward…

Lender is king.

The lender may require additional items such as Termite Inspection, Survey and if in a flood zone, an Elevation Certificate. By the way, there is a reason the lender is asking for all the documentation they are asking for. Please do not let it intimidate you.

Survey: In most cases, there is a definite time frame in which a Survey is to be provided and time frame for you to review. You have the opportunity to object to the Survey if there are unforeseen issues identified.

Termite Inspection: Your lender may require a Termite Inspection. If there are any termites found on the property, a termite treatment may be required to satisfy the lender. It will have to be determined at this point if you as the buyer pays or if you ask the seller. Your Termite Inspection in not a guarantee that termites are present. Just a simple report that termites were not found at the property at time of inspection.

Behind the scenes is the Title Company.

We love them.

In time, the designated Escrow Officer at the Title Company will be preparing the property’s Title Policy. Per the contract, the Title Company commits to providing the Title Policy within 20 days of their receipt of your executed contract and earnest money.

The Title Policy will be presented for our review. Any items on the Title Policy that prohibit clear title would be identified and addressed at this point. Not usually an issue.

Jannine Osborne, REALTOR® 361.688.0067 call or text

Contract to Close

OK. As your Real Estate Agent, I’m working hard for you!

Your agent (me) will facilitate and work in conjunction with the Seller’s Agent to facilitate all of these inspections and reports!

You will be kept informed as we progress toward closing. I encourage the Escrow Agent at the Title Company to keep you in the loop as well. I try to facilitate communication, but your contact with them is just as important.

I have my nose in everyone's beeswax. How else are we gonna get this done?

Your tasks.

C-R-I-T-C-A-L. Team work!

You are charged with several duties. Whatever is required by your lender. Acquiring full loan approval and getting Home Owners Insurance Policy. These things should be put into play as soon as we have an Executed Contract.

Those little things that make life in a new house comfortable…. water electricity and other stuff As we approach the closing date, you want to start preparing for utility transfer or opening a new account. Each company and city is a little different. Some cities on the coastal bend require you to come visit in person.

(If I have not given you the “list”, remind me and I will get it to you.)

Jannine Osborne, REALTOR® 361.688.0067 call or text

Contract to Close

Last Call.

Your choice.

There are two other activities that will (or can be) performed prior to your closing date.

If you choose, you can do a final Property Walk Through prior to closing. You can also choose to have your Property Inspector revisit the home to ensure all repairs are complete and acceptable.

Going to Closing.

Another reason to stay in close contact with your lender and title company: How much do you need to bring to the Title Company? Please check to see if a personal check is acceptable or a cashiers check or money order – every Title Company is a little different. 

Is it yours YET? The full title does not transfer until your lender has provided your Funds for Purchase to the Title Company to be wired to the seller’s mortgage lender. This is called Funding.

Even if you have successfully signed all your paperwork and provided any funds required at closing, you will not be granted access to the home until Funding has been completed.

Chances for funding on the same day of closing are best if closing takes place early in the day. It normally will take approximately three hours for funding to be achieved. If you are to receive your Earnest Money and Option Money back at closing, you will receive these funds once Funding has been achieved.

Making Memories.

Although at times, the process from Contact to Close may be stressful, my hope is that it will be a memorable experience with minimal issues.

Jannine Osborne, REALTOR® 361.688.0067 call or text

Contract to Close

And Then…

You Are A New Home Owner

Jannine Osborne, REALTOR® 361.688.0067 call or text

TEXAS LIVING AT THE GULF COAST Jannine Osborne, REALTOR速 Real Estate Marketing & Sales Silver Sands Realty jannineo@yahoo.com 361.688.0067