From contract to closing is a crucial time period
So you have a price agreed contract on your home – now what? Listed below is an explanation of the contract contingencies and the sellers contract to closing process. A typical time from contract to closing is 30 to 45 days. A lot happens during this time period and there are deadlines. It can be stressful because a lot of it is hurry up and wait.
The house needs to stay in order and “show ready” for at least 2 more appointments.
- The appraisal: One of the requirements the lender will have prior to issuing loan commitment is an appraisal. This appraisal is ordered by the bank and paid for by the buyer. Treat this appointment as if it were another buyer appointment. Make sure the lights are on, everything is clean and the house is free of clutter. The appraisal usually happens within the first 2 weeks after price agreement and just after the buyer’s building inspection. The appraisal is the property of the buyer and the only thing you will find out is whether it appraised or didn’t.
On the standard St Louis Realtors Residential Sale contract, the dates that are not specific are based on the “acceptance deadline date”. To find this date, review the final counter. It is the date that is just under line 6 and entitled “Expiration”. As your agent I will provide you a calendar of these dates.
- The building inspection generally occurs within 10 to 15 days of the “acceptance deadline date”. Soon after price agreement, the buyer’s agent will make an appointment for a building inspection. This is another occasion that is important to have your home “show ready”. The buyers are usually present and will be giving the home another “look see” to confirm that they still love it like they did on the first visit.
The building inspection usually lasts for 2 to 4 hours and can include the building inspection, a radon inspection, a mold inspection, a termite inspection and a sewer lateral inspection. Not all of the test results will be available immediately.
The buyers’ agent will present an Inspection Response Notice to the sellers’ agent together with a copy of the written reports within the time frames established during negotiation. Upon receipt of this document by the sellers agent, further negotiation ensues until an agreement is reached between buyer and seller as to the requested repairs. The time period to reach agreement is usually 10 days after receipt of the request. If an agreement is not reached in this time period the contract will be considered null and void.
- Homeowners Insurance: The buyer has a designated amount of time to determine the insurability of the home. If the rates are exorbitant due to excessive claims and/or the condition of the home the buyer may void the contract.
- Title & Survey: The buyer orders and pays for the survey and title examination unless otherwise negotiated in the contract. The survey examines any encroachments of property lines. The title examination is looking for any existing claims on the properties. For a more detailed description of the role of the title company, click here and here.
- During this time period (usually 25 days after acceptance), the title company will contact you for your social security number and contact information for any lenders listed as lien holders on the title examination. The title company pays off all loans and liens on the day of closing from your proceeds. In St Louis, buyers and sellers close at the title company. They do not necessarily close at the same title company. As your agent I try to schedule the sellers closing after the buyer has signed all documents. The title company will ask for wiring instructions from you and your proceeds will be wired to your account of choice or you can wait for them to issue the check after funding.
- Government Inspections and Occupancy Permits: If the home is in a municipality that requires occupancy permits, it is the seller’s responsibility to order the inspection and complete any repair predications prior to closing. It is a good idea to have this inspection done, if possible, prior to putting your house on the market.
- The title company will require lien waivers and paid receipts for any work that has been completed on the house within the last 6 months. The title company and buyer will require paid receipts and lien waivers on any work that has been negotiated to be completed prior to closing. It is good practice to supply this information to your agent at least 5 days before closing. When the buyer does their walk-through they will want to have these in their possession and the title company will want to review them prior to preparing the final HUD.
- After the buyer has obtained loan commitment it is time for you to coordinate changing the utilities. Click here for names and numbers to contact.
- Buyer Walk-Through: The buyer has the right to a final walk-through within 4 days of closing to establish that the home is in the same condition as it was on the date of contract. If repairs were made to the property, they may bring an inspector back to confirm that the repair was done properly.
As your agent I am in this every step of the way. The process of taking a signed purchase contract through to closing involves many details, deliveries and document submissions. It is a crucial time to stay in close communication. My goal is to keep us on track, making sure that all phases of the closing process move along smoothly. If you agree to repairs, there will be deadlines associated with completion and possibly requirements for the buyer’s inspector to return for a re-inspection. I also have a list of contractors to recommend and help with getting estimates and quality repairs in a timelymanner.
Our mutual goal is always a successful closing which is so much easier to accomplish with good communication and everyone being on the same page.