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Steps to Take While Under Contract
Step 1:
Earnest Money
Now that you are under contract, there will be a series of steps that will take place. If done with experience and taking into consideration all possibilities, these steps should happen in a certain order so as to not incur any unnecessary expenses. Many of these steps will be performed by us, your real estate consultants, and others will be performed by your lender and closing attorney (otherwise known as the title company). As per our contracts, the earnest money, or the amount you put down when you submitted your offer, will be deposited into a non interest bearing trust account with either our brokerage or the co-operating real estate brokerage.
Step 2:
Home Inspection
As per your contract terms, you will typically have between seven and 14 days to perform all inspections (types are outlined in our next section of the buyer's guide). Since this is a contingency in the contract, you will want to discover anything that might prevent the sale from moving forward as soon as possible. If repairs are needed, can be remedied, and both parties agree, these will be completed prior to closing. If there are repairs or other issues that either cannot be remedied or the seller has refused to do them, the contract can be cancelled at that time and any further expenses can be avoided.
Step 3:
Loan Application
The purchaser will be required to make loan application within a certain period of time after contract execution, and this will typically be within seven days. This will require that the applicant meet with the lender of their choice to fill out the application and provide most or all of the necessary documentation requested by said lender. We will forward a copy of the contract to the lender at this time. The credit report will be ordered as well as the appraisal. It is important to notify the lender at this time that until after inspection, the appraisal should not be done so as to avoid incurring that expense in case the inspection results cause the sale to be cancelled.
Step 4:
Title Search/Insurance/Survey
The closing attorney will be notified and the closing date will be scheduled as per the date in the terms of the contract. The
lender will order the title search to be done by the attorney at that time. This search is with all recorded court records to discover anything on file from the past that might influence this sale. The attorney will find out at this time if there is a survey on file and ask the purchaser whether or not they would like to a new one performed.
Step 5:
The attorney will then begin working to provide you and your lender a satisfactory abstract of title and line item costs for items required by your lender.
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