When you’re selling your home, accepting an offer can feel like you’ve completed a major milestone – you’re ready to take the next steps toward closing.
Here are some different components and contingencies of an offer you can expect to see, as well as tips from an experienced broker from In-House Realty on what you, the seller, can expect after accepting an offer.
Also referred to as a due diligence contingency, an inspection contingency protects the buyer’s right to have the home inspected within a specified time period. It allows for the buyer to cancel the contract or negotiate repairs based on the professional home inspector’s findings.
The inspection typically occurs within 7 – 10 days after the offer is accepted and allows the home buyer and inspector a chance to privately view the home. As the seller is not present for the inspection, you’ll have a few tasks that must be completed in preparation for the home inspection.
Doug Gartley, broker at In-House Realty, suggests to prepare your home so both the buyer and inspector view it at its best by clearing access to various points in the house that the inspector has to view:
- Crawl space
- Electrical service panel
If any of these areas are blocked and the inspector is unable to access them, the inspector might have to reschedule, delaying your timeframe for closing.
Much like the inspection, the buyer will likely order an appraisal through their lender. The appraiser will then schedule an appointment to check out the property.
Should the house be appraised at the value of the purchase agreement, with no repairs required, the process is all set to move forward. If not, the buyer has the right to cancel the contract, moving the process back to the negotiation stage. This, in turn, can tack on extra time to closing and possibly add a few unforeseen repair expenses for you.
That being said, you can prepare in the same way as the inspection by creating easier access to utilities, electrical systems and appliances, and making sure the house looks its best.
Traditionally, a home buyer uses a financing contingency to establish a period of time to apply for a mortgage and/or close on a loan. Basically, it’s an understanding between the home buyer and seller that the offer is contingent on being able to secure financing for the house.
The financing contingency typically ranges between 30 – 45 days from the time the offer is accepted and normally lists the type of loan they plan on securing, their down payment amount, the term of the loan and the interest rate. The contingency protects the buyer – should they be unable to obtain a loan, it prevents the buyer from being penalized.
While this process does not directly affect you, the timeline to closing is impacted by the home buyer’s ability to secure a loan. If they are unable to, it could slow the closing process down, should you decide to proceed with a different offer.
The purpose of a final walkthrough is for the buyer to ensure the property’s condition hasn’t changed since their last visit (typically during the inspection) and that any agreed-upon repairs between the seller and buyer have been made and that the terms of the contract will be met. The final walkthrough typically takes place 24 – 48 hours prior to closing.
You can prepare for the final walkthrough by making sure the home stays in the same state as during the inspection. Make sure your home is clean and any agreed-upon repairs are completed.
Just prior to closing, you’ll receive and review a closing statement, or a seller’s closing disclosure form, which includes a complete breakdown of expenses and credits from the sale of your home.
Gartley stresses that this is important for you to read carefully and review before sitting down at closing. Since there’s a lot going on, it can be easy to miss something. Most brokers review this statement ahead of time before they send it to the seller, but it’s still imperative for you to take time to understand the form and double check the information.
Closing signals the final step in the home selling process. On this day, the ownership of the property is transferred to the buyer. The closing date is typically set during the negotiation phase and is likely to be anywhere between 30 – 60 days out from the time you accept the offer.
Something important to consider during this time is the utility transfer. It’s tempting, once you receive the closing date, to immediately cancel your utilities for this date. However, this can cause problems if the closing date is rescheduled. You can, however, schedule a utility transfer with the closing date in mind.
“You want to make sure you do not terminate services early,” says Gartley. “Call your service provider to let them know that you are closing, but don’t turn them off before closing, as the date can change.”
While this is not required, often sellers will request post-closing occupancy of the home – a pre-established number of days that they can still inhabit the home after closing.
During this time, you’re still responsible for maintaining the property. This means keeping the home insurance on the property, maintaining the use of all utilities and ensuring that when you leave, the home is in the same condition.
Post occupancy can typically last anywhere from 30 – 60 days after closing, as determined in an agreement by both the seller and buyer. The buyer can request a final walkthrough to ensure the home is in the same state as it was at the inspection.
Understanding the timeframes and contingencies that occur after you accept an offer will give you a smooth and easy transition when selling your home.
Have you recently sold your home and have tips on how to prepare for closing? Let us know in the comments below!
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