Real Estate Corner
What happens after the contract of sale?
So you have a ratified contract on a home you're purchasing or a home you're selling. What happens next? This is one of the most often asked questions i get from my clients, whether they're buyers or sellers. The intent of this article is to give a general outline of the process that occurs after the contract ratification, leading up to settlement.
There are two pathways that are going to take place at the same time, immediately after contract ratification. If there is a mortgage involved, the lender will be processing the loan. At the same time, the chosen Title attorney will be researching the background of the the subject property. They will perform a title search, conduct a title abstract, and will do a survey of the property. The buyers can choose several different types of surveys, including a simple (and least expensive) house on location survey. They may also decide on the most extensive, and most expensive survey, known as metes and bounds. This is also the most accurate of the surveys. The title attorney will also ultimately consolidate the package that they put together from the work they do, with the mortgage lender's package. This will all come together at the closing table, to be presented to the buyers and sellers for their signatures.
While the mortgage company and the title company are doing their jobs, there's some other tasks that usually need to be performed. The ones that occur in most real estate transactions are the inspections. Typically, a home inspection and termite inspection will be conducted. The purpose of the home inspection is to evaluate the home (almost always performed by a licensed inspector) for significant defects in the areas of structural, functional, and safety. This is not the time to attempt to have cosmetic defects addressed. The buyers will identify the items as addressed by the inspector. A request will be made of the sellers to remedy the identified items prior to settlement. The sellers can choose to repair the items or not. If an agreement cannot be reached, the buyers will have have the option to terminate the contract, without incurring penalties. Normally, an agreement is reached in this matter.
In addition to the home inspection, additional inspections can be performed. The most common of these is the termite inspection. A certified termite inspector is asked to look at all suspect areas for evidence of current or recent infestation/damage caused by termites or other wood destroying insects. If such evidence is discovered, sellers will be asked to remedy the identified problem areas. The mortgage lender will often require that a termite inspection be performed.
If the home is operating on a private water supply (well) and, Septic system, It's a good idea to have inspections conducted here as well. Again, the lender may require these as conditions of loan approval. Other inspections that can be performed, which usually don't occur as often include radon, mold, chimney (if on exists) and environmental. Again, certified specialists should be chosen.
The final process will include the appraisal, to be ordered by the lender, and the changing of accounts for gas and electric and telephone service, as well as water service. The buyers will then be asked to obtain a certified or cashier's check to pay for closing costs and down payment balances. At this point, the two parties are ready to go to closing where the title will transfer from the current owners to the new owners. All real estate transactions can have other unique elements, but the process described above is the most common. For more information on these and other real estate matters, please go to my website at www.alchefsellshomes.com