Thursday, February 9, 2017 / by Jason Huerkamp
The House is Under Contract so is it Time to Celebrate?No, its probably not yet time to celebrate yet, but you are definitely on the way. There are still a few hurdles to cross before the deal is closed and your funds are safely in the bank.
So what could possibly go wrong? Lets take a look.
The Home InspectionThe Buyer for your home will inevitably require a home inspection. Its a good thing really even if you have heard some not so good things. The Home Inspector spends time searching your home for anything that could render the home unsafe or dangerous for the buyer of the home. He will check the plumbing, electrical, the structure for obvious issues, the roof, crawl space for damp, termites and other issues. Most homes have some items that need to be attended to. Many can be sorted out with little financial burden, however some items are more costly and it can cause the buyer to shy away from the transaction. A good buyers agent will try hard to get most repairs included and a brilliant listing agent will be able to save the transaction to the benefit of his seller. One thing you do need to keep in mind - if the Home Inspector uncovers issues with the home and the buyer decides not to go ahead with the transaction, the Seller and his agent are obliged to disclose the defects to any future buyer of the property.
Once the offer is signed and sealed and the buyer goes ahead with his mortgage process, the lender will call for an appraisal on the property. In todays market that is not a difficult process, however, if your home is priced and sold for top dollar it could need a little negotiation to get the property deal finalized. A experienced agent working with a buyer will know how to deal with that and will inevitably produce the comps in support of the property price and subsequent loan.
Once a buyer has found his dream home, he may go home and think about the longer repercussions of his purchase and how he may have made a big mistake. This can happen if he has been in a bidding war and won the property, but it can also happen with first time home buyers too. Often the buyer just needs some reassuring and to look at the comparatives again with his buyers agent, and then he will be fine - but sometimes, the thought is far too daunting and he may terminate the contract.
Buyers Finances Are Not in Order
The Buyer goes through a process of mortgage pre-approval and then at the last minute he does something to jeopardize his mortgage application and the lender can withdraw the pre-approval and with it goes the opportunity to purchase the house. This can happen right up until a few days before closing. A good buyers agent and an excellent lender will remind the buyer not to purchase anything big, to pay his accounts on time and not cause any damage to his credit until the deal is closed and the mortgage is in place.
Sometimes there can be hitch with the documentation - be it with the Sellers documents or the Buyers documents or even with the lender or closing attorneys documents. These can be a small amendment and sometimes it can be a lot more of an issue to repair. Its always a good idea to make sure that your documentation is in order before you begin the buying or selling process. The closing attorneys and the lender will usually know ahead of time and minor issues can be attended to.
Final Walk Through
The final walk through can be the final deal killer if the Seller has not kept to his end of the bargain and done the required repairs using a qualified person to do the work. The Seller is also required to have left the home with the items in it that are to remain as per the contract. All appliances, the hot water heater and HVAC need to be in a good working condition at time of closing. If they are faulty or not in a good working order, that could be means to cancel such contract.
As you can see, there are a number of things that can happen to delay or cancel a sale and its difficult to pinpoint the right time to celebrate the the sale. Generally the time that the appraisal is in place and good, the home inspection is completed and the repair items are negotiated and the Buyers finance is in place, its probably fair to say the sale will probably be safe. A great Buyer / Seller's Agent will help you through the transaction and make sure that everything is covered in your contract and subsequent conditions are met on time.