Once we’ve got the marketing out of the way and have negotiated a contract, the road to closing becomes more or less a scheduled checklist. Shortly after you sign a contract, the purchaser for your home will engage their lender to have them begin processing their mortgage application and other paperwork. If you’re moving on to another home that you’re purchasing, then be sure to give my Buyers Guide a read, which will tell you everything you need to know and do between contract and closing for that deal as well. For the sale of your existing home, here’s an idea of what needs to happen (on the seller’s side of the equation):
Numerous inspections will need to take place for your property between the time you sign a contract and the time you close on the sale of your home, including:
Wood destroying insects (termite) inspection: While it’s rather unlikely that anything will turn up, most buyers and/or their lenders will require that this form of inspection be performed and at your expense. Don’t worry, they’re very modestly priced and take only an hour or so for most inspectors to complete. I’ll let you know when it’s time and help you set this up.
Well and septic: This inspection applies mainly to homes located in rural areas (those without public water and waste services) and includes a quick check of your home’s water, to ensure that it’s safe for drinking, as well as a look at the septic system to ensure that it’s up to snuff and doesn’t need to be emptied. Both are quick and very inexpensive. Again, I’ll let you know when and how to set them up when the time comes.
Whole-house inspection: This represents the pinnacle of inspections and it’s the most in-depth that your house will undergo before closing. The good news is it’s paid for by the purchaser. The bad news is the results of this inspection often can open up a new round of negotiations. Let me explain.
A licensed home inspector will be hired to come out and have a close look at every inch of your property, in order to examine and document the condition of everything from the foundation to the rooftop and all points in-between. Whether it’s a leaky roof or just a loose doorknob, chances are it’s going to make the list. The resulting report can be startling at first glance, but just know that these inspectors are trained to pick up on and document every tiny detail. From the results of this inspection, a buyer may generate and support any requests for repairs, or cash credits at closing in lieu of those repairs. This represents the next and final phase of negotiation. Just as you negotiated a sales price and other terms for the purchase contract, when a buyer requests repairs, you will have the option of fulfilling some, all or even none of those requests. If they’re minor, you may choose to tackle them on your own. But in some cases, and especially for major repairs, buyers may request that they be performed (and documented) by a professional contractor.
NOTE: While you may be tempted to take some offense at many of the repairs that a buyer requests, my advice is: Don’t. Unless they’re nit-picking (in which case I’ll advise you on how we can best reel in those expectations), bear in mind that, should you refuse to perform those repairs, chances are, they’ll only be requested again when the next buyer and next inspection comes along. In other words, it’s best to get it over with and keep the current deal alive.
Property survey: Though it technically isn’t an inspection, this is when a surveyor will come out to your property to determine and examine the property lines. In a nutshell, they’re only looking to ensure that everything is where the survey plat says it is and that nothing’s been added or constructed that encroaches over property lines. So long as there are no new sheds or other structures that have been improperly placed, chances are, there will be absolutely no issues.
Pre-closing walk-through inspection: Perhaps the least painful of all inspections (unless you happen to still be shoving your belongings into boxes)—this is when, typically as close to the time of closing as possible, the buyer for your home takes one last stroll through the property to ensure that any requested repairs have been made and that your home is otherwise in the condition it was in when they agreed to purchase it. It takes maybe an hour and so long as you’ve treated the house gently while moving and have handled all of the repairs you agreed to make, all will be well.
Selecting a closing agent or attorney
As you might imagine, transacting the title to real estate from one party to another is a complicated matter. For this reason, you’ll need to hire a closing (sometimes referred to as settlement) agent. In most cases, this individual is a real estate attorney who is hired to establish all of the necessary paperwork for a transaction. Aside from providing them with whatever information they request (which is most likely going to be simple, but personal info like names, social security numbers, current mortgage info and those sorts of things), the closing agent will leave little for you to do other than show up at the determined time for closing and sign the final documents. When the time comes to select a closing agent, I can provide you with a list of a few that I’ve found reputable and great to work with. Otherwise, you’ll find plenty via a local search.
You’ll see me at closing. While many of the agents I work with do not join their clients at closing, I beg to differ. Rarely do issues arise, but, in my opinion, should something come up: If you aren’t there, you’re only part of the problem (and not the solution). For this reason, I attend every closing.
2 thoughts on “Contract Through Closing”