The seller has just signed the contract and returned it to us. Here's what happens next:
Deliver Earnest Money (usually 2 days or less)
- We will have negotiated an amount of earnest money to be delivered and when to deliver it. Earnest money is a deposit made to a seller that represents your good faith to buy the home.
- Usually, the listing office will hold the earnest money funds.
- Tami will give you the details of who, where, how, how much for the earnest money.
- These funds are cashed so make sure you have enough in your account to cover the check.
- The amount of money you bring to closing is reduced by the amount of earnest money you gave.
- The contract details all the ways your earnest money is protected--talk to your attorney about this if you have questions.
Send Contract to Your Attorney (5 days)
- Your attorney will review and approve the contract.
- The attorney has 5 days to make any requests of the seller to change the contract.
- The "attorney letters" may go back and forth several times with a bit of legal mumbo jumbo; but, just take the advice of your attorney. One note: sometimes these letters sound very formal, distant, or the tone can sound harsh. Don't worry; this is pretty standard.
- If for some reason, the parties can't reach agreement on any issues during this phase, you can cancel the contract and have your earnest money returned.
Have the Property Inspection (5 days)
- The article below outlines all the details about the inspection. Please read.
- The inspection must occur within 5 days of contract acceptance.
- If after the inspection you want to walk away, you may do so and have your earnest money returned.
Start the Loan (10 days)
- You'll begin the loan application process with your lender.
- You are free to "shop the loan" to other lenders during this time.
- Your lender will order the appraisal of the home--and in general you will have to pay for this now.
- Depending on what we negotiated in the contract, your lender must approve your loan either 5 days before closing or 45 days after the contract is accepted.
- If the lender cannot approve the loan in the contracted time, we may have to ask for more time. Or if you find out you don't qualify for the loan for some reason, we will cancel the contract and have your earnest money returned.
Other Time Frames:
- Verify the home is insurable (within 10 days). This is just your protection in case you find out for some reason you can't get insurance. Call your insurance company, give them the address, and make sure the house can be insured.
- We may have to deliver additional earnest money, depending on whether that was negotiated in the contract.
- If you need to sell your home first, you have 5 days to put your home on the market.
A few notes:
There will be lots of legal documents going back and forth between attorneys, lenders, etc. Don't get frustrated. Just work through each piece as it comes. We will try to make it as hassle free as possible--but there will still be some challenges. It is easy to get the wrong impression about the sellers, as if they are the ones being difficult. In reality, they are probably just as stressed as you are so don't read too much in to the attorney letters or responses that we get from the seller.
While applying for the loan, don't make any changes to your financial situation. Don't change jobs. Don't cancel accounts unless your lender advises you. Don't cash out an account before talking with your lender. Don't open any new credit cards. Just be very careful about your finances during this period.
The Waiting Game
After the initial rush of the first two weeks, there is a bit of a waiting game until the week before the closing. For all the info about what happens in that week, read this: