So, you have the accepted offer, or you have accepted the counter-offer, now what? This information is not being presented to frighten or create doubt. If you chose a good agent and followed the receiving an offer advice you have reduced the risk of complications going forward. The idea here is that being fully informed can reduce the risk of complications even further.
The instant you sign the offer to purchase, or the counter offer document you have mentally sold your home. If the contract contains contingencies, your home is not sold. Be extra cautious about making decisions that involve money for which you depend on the closing. Buying another home, booking an expensive vacation that requires a non-refundable deposit or entering into a long-term lease contract are just a few examples.
Some contingencies more likely not to pass muster are:
- Financing contingencies
- Subject to the sale or closing of other properties
- Subject to inspections or testing
- Subject to change in buyer circumstances that are difficult to guaranteed, such as confirmation of an inheritance, divorce judgment date or new employment.
Closings fail for a variety of reasons. Sometimes closings fail even after the contingencies are removed. There is an old cliche attributed to Yogi Berra, “ It’s never over, till it’s over” that is well-known in real estate transactions. Accidents, lenders backing out, natural disasters, change of heart or circumstances and more can and do occur in real estate transactions.
A checklist to follow:
Delivery to the other party is when the contract becomes a contract. Verify the contract of sale or counter offer acceptance has been delivered.
Update the dates each contingency must be satisfied in your calendar. Add notes to your calendar three days prior to contingency “drop-dead” dates to contact the listing agent for status and verification.
Get agreement with the listing agent if the contingency involves actions on your part, about who will be responsible, what specific actions the task involves and the date of completion of the task. Record these dates in your calendar, so you remember to follow up.
It is likely that your home must be available to view by appraisers, inspectors or others. If you have a scheduled vacation or cannot be available to open your home, it would be wise to have another point of contact who can. Coordinate this with your agent. If you disappear for two weeks without making arrangements, it could jeopardize or delay the closing.
Here is a tip if you agreed to make repairs in the contract. There are several common complaints from homebuyers after they move into the home.
- They bought the cheapest part.
- They did a poor job on workmanship, just to get it done quickly.
- They had an incorrect solution that did not fix the problem.
There are two ways to alleviate or minimize this happening to you.
- Hire a reputable contractor to do the work. The chances are high the contractor will do the work correctly and follow-up on a legitimate complaint. Also, the buyer is less apt to complain when they know a professional performed the task.
- Get a quote from a reputable contractor and ask the buyer if you can write a check from the closing payable to the buyer for the task. By allowing the buyer to handle the issue, you are giving the buyer control over the repair. The tactic takes complaints out of the equation, and most buyers would rather control the task. After there is a contract in place, this conversation will not distract from negotiation on the property.
There are some different companies and individuals involved at this point in the process. The involvement of dozens or even hundreds of other transactions increases the exposure to lost documents, pigeon-holed phone messages, and poor memories or follow-up skills. Here is a list of types of vendors that may be involved:
- Real estate agents
- Insurance agent
- Moving and storage
- Title company
- Appraisal company
- Home inspector
- Mortgage lenders
- Contractors – pest, swimming pool and more
Do not forget about the importance of this period between the acceptance and the physical closing. This is a stage in the process of selling your home where a seemingly small oversight can create a domino effect and create delays, extra costs or even a failed closing.