Got A Deal? Now What?
Do You Have A Deal? Maybe----
This is not presented as legal advice. Please consult legal counsel for the state and locale for which your transaction will take place.
What follows is a loose guideline moving from an accepted agreed-upon price through closing. A good range of information is presented, but keep in mind there will be many other associated details within the process that are not covered.
The agreed-upon price is arrived at through negotiation. In many instances, the buyer's agent will convey the buyer's position verbally to the seller's agent. In kind, the seller's agent will convey counteroffers as directed by the seller. This process can involve email, phone calls, text messaging, and face-to-face buyer's agent to seller's agent communication.
When the agreed-upon price is determined, a purchase offer is prepared by the buyer's agent. The basic details of the purchase are noted. Earnest money, sometimes referred to as a binder, is taken as a gesture of good faith that the buyer has legitimate interest in proceeding to closing. This good faith deposit is generally refundable if the purchaser does not close on the subject property.
In most cases, an acceptable home inspection is noted as a purchase contingency. Home inspections are generally scheduled within 10 days of the signing of the purchase offer. In rural environments like Sullivan County, New York, a water test, septic test, and radon test are strongly advised. An insect inpsection may also be suggested.
If the buyer finds the home inspection acceptable, the seller's agent will contact the seller's attorney and request preparation of the formal sales contract. If however, the inspection is not acceptable, a renegotiation may take place. The deal may fall apart if a mutually acceptable new price cannot be found.
If the deal remains in place, the seller's attorney will forward the first draft of the sales contract to the buyer's attorney. In almost all cases, the buyer's attorney will modify the sales contract to one extent or another. Once all modifications of the sales contract are made by the respective attorneys, both buyer and seller will be required to sign. Upon the contract signature of both parties involved in the transaction, fully executed contracts are complete.
Along with fully executed contracts, common practice dictates a certain percentage of the agreed-upon price, 10% being the norm, be conveyed to the seller's attorney. The deposit is held in the seller's attorney escrow account and will be included as a credit to the seller at closing.
If the sales contract provides for a mortgage contingency, buyers should be actively pursuing financing options. It is a good idea to get an early start by obtaining a prequalification letter and then, proceeding to get full loan approval. Obtaining a loan approval helps move the purchasing process along. Buyers and sellers will both want to know funding has been approved for the purchase.
In almost all cases, lenders will need to appraise the subject property. Hopefully, the appraisal verifies the property you wish to purchase has a current market value of at least the agreed-upon price or higher. If the appraisal determines current market value to be less than the agreed-upon price, a renegotiation of the agreed-upon price may be in order. The alternative for you, the buyer, is finding more liquid resources offsetting the lower appraisal price or, exiting the deal.
The title search, survey, or recertification of survey are generally requested by the buyer's attorney. The title search reveals if a clear and marketable title can be conveyed at closing. The title company will insure title for the buyer and charge a premium. Please consult with your lawyer about other specific details encompassing a successful transaction.
When the numerous details related to closing are in order, and if financing, a clear to close by the lending institution is given, the attorneys will set a mutually convenient date, time, location for which to finalize the transaction.
At the closing, many outstanding fees, adjustments, and other important financial and legal details come together. Generally, the buyer's attorney, seller's attorney, a representative from the title company, a representative from the lending institution, and the broker and/or agents will be present.
Foreclosures and Short Sales: Buyers should keep in mind that an offer on a short sale or foreclosure property has to be negotiated with, and agreed to, by the lender. The process is often long and paperwork intensive with many starts and stops along the way. A buyer may realize an attractive buy or come away empty handed for any number of reasons.
Summary: Please be aware this document is a brief description of the real estate process within the Sullivan County , New York Catskills. It is not meant to be legal advice or cover every conceivable detail pertaining to a real estate transaction.
Having an experienced and licensed New York State agent/broker goes a long way toward the successful completion of a real estate transaction. Furthermore, a Realtor® helps ensure a professional approach in dealing with both buyer and seller. There is no substitute for sound legal advice from an attorney of your choice. Consulting with professionals such as an accountant, home inspector, engineer, and others help protect your best interests.
Please contact me if you have any questions or need clarification on the real estate process. I look forward to working with you when the time is right.
John Kavaller-Owner/Broker Catskill Country Real Estate
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