Under Contract Next Steps: Inspections, Appraisals, Attorney, etc.

The Process, Step-by-Step

Under Contract

An effective agreement is a legal arrangement between a potential purchaser and the property’s seller. In order to be a legally binding agreement, the agreement must be signed by both parties and delivered back. In most cases, buyer and seller have agreed to a Due Diligence Fee and Earnest Money Deposit. Our team will coordinate the proper and timely execution of delivering the funds.

Some important tips to keep in mind to streamline the process:

• Detailed steps when receiving and agreeing to an offer.

  Our team will assist you in drafting all the paperwork for your purchase, submitting your offer, confirming executed contract, etc., and make sure that you have copies of everything.

• Stick to the schedule.

  Now that you are under contract, you and the seller will be given a timeline to mark every stage in the process of closing the real estate contract. Meeting the requirements on time ensures a smoother flow of negotiations and also ensures that each party involved is not in breach of their agreements. During the process, our team will keep you constantly updated so you will always be prepared for the next step.

Closing Attorney.

A closing attorney will be selected to represent you and handle your closing. The closing attorney will research the complete recorded history of the property to ensure that the title is free and clear of encumbrances by the date of closing and that all new encumbrances are properly added to the title. Some properties are subject to restrictions which limit various activities such as building or parking restrictions. There may be recorded easements and encroachments, which limit the rights to use your property.

Inspections.

Once your offer is accepted by the seller, you will need to have a licensed property inspector inspect the property within the time frame that was agreed upon in the effective contract to purchase. You may elect to have different inspectors inspect the property, if you wish to obtain professional opinions from inspectors who specialize in a specific area (eg. roof, HVAC, structure). Our team is here to guide you through the entire process and recommend contractors as needed.

Depending on the outcome of these inspections, one of two things may happen:

1. Either each milestone is successfully closed, bringing you one step closer to the close, or
2. The buyer, after reviewing the property and the papers, requests a renegotiation of the terms of contract (the price and/or repairs).

Appraisal and Lending.

It is imperative that you keep in close communication with your lender, who will let you know when additional documents are needed to approve your loan application and fund your loan. If the agreement is conditional upon financing, then the property will be appraised by a licensed appraiser to determine the value for the lending institution, via a third party. This is done so that the lending institution can confirm their investment in your property is accurate. Appraisers are specialists in determining the value of properties, based on a combination of square footage measurements, building costs, recent sales of comparable properties, operating income, etc. When you are within two weeks of closing, double check with your lender to be sure the loan will go through smoothly and on time. Our team will stay in close communication with your lender to ensure a smooth transaction.

Association Approval.

If the property that you are purchasing is conditional upon an association approval, request the rules, regulations, and other important documents from the seller as soon as you have an effective agreement to purchase. Your closing attorney will ensure any needed documents for the homeowners association are received and any associated fees are submitted to the appropriate person at the association by the required time.

Property Insurance.

If you are obtaining a loan, you will be required by your lender to purchase a certain amount of insurance on the property. The value will depend on the lending institution and the purchase price of the property. You may be able to save hundreds of dollars a year on homeowners insurance by shopping around for insurance. Our team is happy to recommend experienced knowledgeable insurance agents for every property type.

• Ask your insurance agent about discounts. You may be able to get a lower premium if your home has safety features such as dead-bolt locks, smoke detectors, an alarm system, storm shutters or fire-retardant roofing materials. Additionally, your insurance agent might give you the option to bundle your home and auto insurance, further discounting your rate.