Real Estate 205 – Contract Period (Alabama Version)
This is the part where you can sit back and relax.
Well... maybe not completely. BUT – your agent will do most of the heavy lifting here (metaphorically speaking). If you have any questions, be sure to ask ahead of time. It is better to be prepared than wait until the last minute. Start packing up items if you still live in the home. Don't completely move out (unless you are able to move out and have your home vacant possibly knowing the current buyer's contract might not go through).
Things happen. There is no guarantee that the transaction will close until everyone signs at closing. As much as we all try to mitigate the issues we know might arise, there might be something that causes the sale to fall through. Sometimes buyers aren't completely truthful with their lender. Sometimes buyers have major health complications arise. Sometimes buyers lose their jobs. There are a number of things that CAN happen. Once you get through inspections and appraisal, the scariest part is over. However, buyers or lenders may require repairs to be made in order to move forward with the purchase.
Specific loans require different things. In the offers phase, we will go over any potential loan repairs that we notice to prepare you. Home inspectors are very thorough and go in crawl spaces and attics, take off electrical panels, and test everything they can get to. Sometimes buyers see these reports that are 80 pages and freak out. It doesn't mean you have a bad home necessarily. But there are usually always items on home inspections that are written up by the inspector. Depending on the severity of the items, buyers may choose to back out of the contract even if you agree to repair them. Usually, these are items the seller isn't even aware of.
But then comes your hard work! Time to actually pack up major items and plan your move! Keep in mind if you are using a moving company, a lot of times they require deposits and advanced bookings.
Make sure you keep insurance on the property the entire time until after you sign at closing. Once everyone signs, it is safe to call and cancel it. But DO NOT cancel prior to the closing being finalized. Also be sure to keep utilities on for inspections and appraisals. They will need those on even in a vacant home to test everything required.
Most importantly, listen to your agent and their requests. There will be various things that you will need to get for title and that usually comes later in the transaction. Title work isn't ordered until the inspection and appraisal are finished in most transactions. Some order sooner, but not always.
We have seen properties that the title company required a survey due to the legal description being so old that it was no longer accurate. In this event, no matter if a lender is involved, any title company is going to require an updated survey and legal description to be able to transfer to a new owner. Typically, this expense would fall on the seller. With that said, remember there are last minute things that can happen. Keep in mind that no transaction is identical to another transaction.
If you are not able to attend closing, please make sure your agent is aware well in advance so they can have the attorney prepare a Power of Attorney (POA) or make arrangements for a mail away with you.
With everything finally out of the way, you'll be ready to close! Head over to RE206 – Closing.