Posted by Congratulations! You just went under contract. Both parties agreed to all the conditions and terms of the contract. So what happens next? The clock starts ticking on the day the contract is signed. All contingency timeframes are counted from the date of ratification. If you come to terms and sign on Saturday night and you have a 7 day home inspection contingency, then the response to the seller for repairs, concession or withdraw needs to be delivered by the following Saturday. Buyers and Sellers must always take into consideration the day of the week they are negotiating and check calendars for conflicts. Especially for home inspections. It often takes a home inspector 24 hours to provide the comprehensive report on the findings of the inspection. A seller is not required to extend the contingency timeframe due to a buyer’s busy work schedule.
Days in the contract are not business days. Every day is counted. Typically, the timeline of events for contract contingencies work in the following order: home inspection, radon inspection, appraisal contingency, and financing contingency. Those are the four big hurdles that are required to be addressed within specific days. Other contingencies could include HOA document review, Condo document review, and often a home sale contingency or other inspections like mold or lead. It is the agent’s responsibility to make sure their client complies with the timelines specified in the contract. Agents must coordinate with each other to gain access to the property when needed to meet these deadlines.
While the agents are counting the days, things are happening on both sides of the transaction with the lender and the title company. They are working together to create a closing document that represents the costs of the transaction for the buyer and the proceeds for the seller. The title company is ordering a title search to determine who is the proper owner and provide insurance to the new owner. They are also ordering a survey to determine the proper boundaries of the property. The title company works with the seller to get a list of outstanding liens and payments due prior to ownership transfer. The lender is working with the buyer to verify income and get approval for lending the funds prior to the financing contingency deadline.
There is no denying it takes a lot of work on both sides of the deal getting “Under Contract”. But that is only half of the process. Just like winning in a sporting season, take time to celebrate the victory, but know there is an incredible amount of work going from “Contract to Closing”. Understanding the roles of the lender, the title company and the agents can be a huge factor to eliminating stress to buyers and sellers. Understanding contract terms, timeframes and contingencies is essential in making sure the deal closes and both parties are happy with the result.