ACCEPTING AN OFFER ON YOUR HOME: THE NEXT STEPS
1. After Accepting an Offer, Understand the Two Contingencies
The majority of the time, offers will have two contingencies – a Home Inspection Contingency and a Mortgage Contingency. It’s crucial to understand what each one means and how it impacts your home sale specifically.
Home Inspection Contingency:
A home inspection will be usually conducted 7-10 days from the time that the offer is signed. The inspection will consist of a thorough checking of all major structural and mechanical components of the home. The heating or electrical systems are the most likely suspects where issues may arise. If an issue does arise, classify it as something you were aware of (i.e. you knew the windows were original) or a surprise (i.e. the heating system is on life support). If the inspection points out things that were known, then don’t expect any further negotiating on the price. If there are any surprises, be prepared for the possibility of the buyer negotiating for the issue to be addressed or the price reduced.
A mortgage contingency is to protect the buyer in the event that they are unable to obtain financing. This contingency is usually 30 days after the offer is signed and accepted. It is important for the home buyers to make sure their pre-approval letter is thoroughly reviewed and that a full credit check and verification of income is performed by their lender of choice.
2. Sign a Purchase and Sale Agreement
Once the home inspection is complete and both parties are satisfied with the results, a Purchase and Sale Agreement will be drafted by the Seller’s attorney. The P&S, as it is commonly referred to, is similar to an offer but with more language protecting both the Buyer and the Seller.
Part of satisfying the mortgage contingency requires the Buyer’s bank to order an appraisal. Remember, all Buyers who get a mortgage have their bank conduct their own appraisal to ensure the value is at or above what the offer price is. This person will come to the home to view both the inside and outside and compare it to other homes that have recently sold or gone pending. An appraiser will also take into consideration anything that came up at the home inspection that is not being addressed, such as structural damage or a leaking roof.
4. Mortgage Commitment Letter
A mortgage commitment letter will be issued by the Buyer’s bank once all conditions have been met and the loan will be given “Clear to Close” status.
5. Obtain the Home's Final Certificates and/or Bills
A final smoke certificate will be required by the town, along with a final water/sewer bill.
6. Clean, clean, clean!
The day before the closing, makes sure home is in “broom swept condition” and all personal items have been removed.
7. The Closing Table
The closing itself is not what it used to be or even what you expect. Most closings are done in pieces where the Sellers sign documents the morning of or night before, while the Buyers sign documents separately and then everything gets filed at the Registry of Deeds. The days of exchanging keys and pleasantries around a table are a thing of the past.
If you hire an experienced real estate agent they will be able to check all the documents to make sure they are all in order and can answer any questions you may have. They can guide you through these steps to make sure the transaction goes smoothly.