You’re Under Contract! Now What?
As a real estate professional, certain parts of my job are thrilling, satisfying and rewarding. But other parts of my job make me cringe, lose sleep, worry, and bite my nails! I had a client last week ask me how REALTORS stay sane during the process, many times juggling more than one deal, numerous personalities, needs, frustrations, and demands. I do sometimes wonder!
So, you’re under contract, either as a seller or buyer. Great! Keep in mind while negotiating that contract, time frames written into the contract are a guess at best—a “shoot for” goal. Your agent will use his/her experience and best effort to estimate those dates as closely as possible, but in most cases has no control over when things happen. Let’s look at a few possibilities!
At the time of signing, you may have a preferred home inspector in mind, but find out later there are no openings that fall within the 14-day inspection time frame you asked for in the contract! Unfortunately, you may have to find a different home inspector in order to be compliant with the terms of the contract. Your contract may also specify that any repairs must be asked for within 3 days of the completion of the home inspection. That doesn’t leave you much time to decide what you may ask the home owner to repair or what you can deal with later.
An appraiser is assigned to the transaction, but may take over a week or two to complete the appraisal and hand it in to the bank. This can delay the underwriting process (final approval of loan). Many lenders have underwriters that are not “in-house” and can take two or more days for that final approval. Once final approval is given, federal laws kick in on time frames of when the transaction can actually close. Those are ALL requirements that your lender, agent, buyer or seller is not in control of at all.
Closing of transaction dates are most certainly “shoot for” dates and not “drop dead” dates! Unless it’s a cash deal, the buyers and sellers are at the mercy of the lender of when the final underwriting is completed and ready to close. Can the seller back out if the transaction doesn’t close on time? Generally not if the delay is through no fault of the buyer and is attributed to the lender or lending process.
Possession dates are generally based on the closing date. For example, if the contract calls for 10-day possession after closing and/or recording of the deed, the seller and buyer may not even have a firm date until there is a closing scheduled. Don’t count on those dates prematurely.
The tricky part is when one transaction depends on another. Perhaps your house is under contract but you can’t close on the next one until your sale is completed. And then that family can’t close on their next home until yours closes. We call this the “domino” affect. It becomes quite tricky to try to coordinate closings and possessions to meet everyone’s needs. And generally, the first buyer is a renter and needs to move before paying another month’s rent! A three-tiered transaction usually involves four families who have to move, have time to move, etc. The whole process can get quite contentious at this point and everyone’s patience, empathy and understanding is essential to get through this part of the transaction.
As agents, we try to work as a team in this effort to help the process along, make sure everyone is doing their part in a timely manner and coordinate what is required in the transaction. Sometimes, we are all at the mercy of others and have no control over the process, but good communication and understanding is the key to a successful transaction for ALL parties involved.
As appearing in the Canton Repository 7-15-16