Now that you have accepted a written offer, it’s time to mark your calendar in anticipation for what was agreed to. Before you get to the actual closing date, there are a few things that need to happen. Below is a rough timeline that will cover most transactions, but not all. All deadlines can be extended when mutually agreed upon. However, if your buyer is not working diligently to complete these items, you may want to cancel the contract to find a more proactive buyer. Please understand this is a general overview of the timeline to a successful closing and should not be considered legal or financial advice. Use the contact form on the right to ask a more detailed question or speak with your Listing Agent, if you already have one.
As part of the negotiations a Title company will be agreed to. They will 1) act as a neutral 3rd party that makes sure the terms of the agreement are completed, 2) handle the exchange of all funds and 3) work to transfer the title of your real property or real estate to the new owner. In order to “open escrow” your listing agent will send them the purchase agreement to the Title company as well as any addenda that modify the terms of the agreement. This will allow them to create a file for the transaction as well as an escrow account that holds funds for the exchange of money for marketable title of the property.
Opening of Escrow:
Once the file has been opened, the buyer will receive instructions on how and where the Earnest Money Deposit or EMD can be accepted. Your Listing Agent will need to follow up with the Title company to make sure the buyer has, in fact, sent the EMD according to the terms of the agreement. Should the buyer not provide the EMD in an acceptable time frame, you will likely want to cancel the contract and place your home back on the market to find a more responsive buyer. If you choose to cancel the contract, it does not mean you automatically get to keep the EMD. There are various conditions and terms that determine your right to keep the EMD as consideration for taking your home off the market.
Ordering of Resale Package:
If you live within a Common Interest Community or HOA, it is your obligation and expense as a seller to provide a “resale package” to the buyer, which details the rules and regulations owners in the HOA must abide by, as well as a number of other details. Per Nevada legislation, the resale package should be ordered within two business days of accepting a contract. It could take 10 days or more before it is available. The resale package is good for 30 days, so if for some reason this purchase agreement is not completed, you may have to pay for additional copies as needed. Once the buyer receives the resale package, they have five days to review the details. If they disagree with any terms, they can cancel the contract within those 5 days for any reason and receive a full refund of their EMD.
If your buyer or lending institution has requires an inspection, it’s likely that these will be done within the first week after accepting an offer. Home inspections range in price based on the size of the home and are usually done before any appraisal usually at the buyers expense. The reason that these are done first is to limit the buyers’ out of pocket expense. Should the buyer find a condition that is unacceptable with the inspection, they will have time to cancel the more expensive appraisal. Generally speaking any inspections will happen within the first 10-14 days, after accepting an offer. It is the sellers’ responsibility to have all utilities on for any inspection.
Should the contracted number of days pass without receiving a request for extension via an addendum or a request for repairs, the inspection contingency is considered satisfied.
Any transaction that utilizes a loan to compensate you for the home’s value will require an appraisal to validate your home’s value. It can take a few days to schedule an appraisal and up to a few weeks to receive the completed report. If all goes well, the appraisal will agree with the contract purchase price, otherwise you may need to renegotiate the terms of the agreement. VA and FHA loans will have an Amendatory Clause that addresses the need to return the EMD, should your property not reach the contracted purchase price. If your buyer does not have an appraisal done in a timely manner it is possible for you to receive the EMD as compensation for taking your home off the market, but not before the agreed date for closing of escrow.
Currently due to the COVID-19 Pandemic, most if not all appraisals will be done in a drive-by or desktop format. If you have upgraded anything within your house, it’s important that your Listing Agent provides this information to the appraiser with photos and receipts if possible.
The financing timeline can be one of the trickiest parts of the transaction, since it is not up to you or your buyer. Many things have to take place before a lending institution can give your buyer a “clear to close”, including the appraisal, any request for additional financial records from your buyer, before an underwriting department will commit to funding a loan. Should your buyer not complete this step in a timely manner, it is possible for you to receive the EMD as compensation for taking your home off the market, once the agreed date of completion has passed, but not before the agreed date for closing of escrow.
Once the above contingencies have been satisfied, you’re well on your way to a successful closing to your transaction. If any of these timelines are not met, you may cancel the contract, but this does not mean you will automatically get to keep the EMD. The contract has been written to require both the buyer and seller to mediate any differences. Even if things are moving slowly, the buyer might be able to complete the terms of the purchase agreement, before the scheduled close of escrow, which is exactly what everyone wants in the end!
At some point prior to the expected closing of escrow and transfer of title, you will need to sign your side of the paperwork with the Title company. This should be scheduled no less than a few days before the closing, with most buyers signing their side of the paperwork, just a day before the closing. If everything is moving on the agreed timeline, it’s time for you to get packed and moved if need be, otherwise you may need to request to rent back your own home!
One last walk-through for the buyer to verify that the condition of the property has not
changed and that any agreed to items of personal property are still in place a few days before closing. If anything has changed from the agreed terms, the buyer will likely ask you to live up to your agreement or they could cancel the contract. So the best thing is to do is fulfill the agreed upon terms so that everyone can have a stress-free and happy closing as expected.