Congratulations! Your offer was accepted and you’re wondering what the heck do “escrow” and “contingencies” even mean? Now that you’ve reached this exciting milestone, let’s walk through the next steps that will ensure a smooth and successful real estate transaction.
As your real estate agent, I’ll be here to support you every step of the way, so let’s go…
Step 1: Earnest Money Deposit (Days 1-3)
After your offer is accepted, it’s time to make an earnest money deposit. This deposit shows your commitment as a buyer and is typically 1-3% of the purchase price. It’s due within three (3) business days of offer acceptance and can be paid by personal check, cashier’s check, or wire transfer.
As your agent, I can guide you through the process of submitting the deposit and ensure it’s properly accounted for as part of your down payment.
Step 2: Review Disclosures (Days 3-7)
During this phase, you’ll review important disclosures related to the property. The preliminary title report provides valuable information about the property’s ownership history, any incumbrances or claims, and legal restrictions that may impact your purchase.
Additionally, the seller will provide disclosures such as the Transfer Disclosure Statement (TDS) and Seller Property Questionnaire (SPQ), which disclose any known defects or issues with the property.
As your agent, I can help you understand and interpret these documents, ensuring you have a clear understanding of the property’s condition and any potential risks.
Step 3: Schedule Inspections (Days 3-17)
It is crucial to schedule inspections to thoroughly assess the property’s condition. A physical inspection, typically costing $350-$500, gives you an in-depth evaluation of the property’s structural integrity.
In addition, you may consider other inspections such as termite, AC, roof, or pool inspections, each averaging around $100 each. These inspections provide valuable insights into potential issues that may need to be addressed.
As your agent, I assist in coordinating these inspections and recommend reputable inspectors who specialize in each area…and, I always personally meet them at your property.
Step 4: Appraisal (Days 10-17)
Your lender will schedule an appraisal to determine the fair market value of the home. This step is essential as it ensures that the property’s value aligns with the purchase price. If the appraisal comes in lower than the purchase price, we can explore options such as renegotiating the price.
As your agent, we look at all of the different scenarios ahead of time and can help you navigate through this very important step of negotiating to find the best outcome for you.
Step 5: Request for Repair (Days 14-17)
Once you’ve completed inspections and reviewed the disclosures, you have the opportunity to submit a request for repair. This allows you to negotiate with the seller on any necessary repairs, or to request credits toward the purchase price.
As your agent, it is crucial that I help you prepare and facilitate productive negotiations to ensure that all of your interests are represented in the best possible way.
Step 6: Remove Contingencies (Days 17-21)
At this stage, you’ll remove contingencies that were included in your offer. These contingencies typically include the inspection, appraisal, and the loan approval. Once these are removed, you have taken huge steps in moving forward with your transaction.
As your agent, I will guide you through the process of removing contingencies and make sure that all necessary documentation is taken care of.
Step 7: Sign Loan Documents (Days 25-30)
Around this time, you’ll sign the loan documents, finalizing the financing aspect of the purchase of your home. This step is coordinated through the escrow office.
As your agent, I will be with you at your signing at the escrow office to explain everything and answer any questions you may have.
Step 8: Close the Transaction (30-45 Days)
Once all of the required documents are signed and your loan has been funded, the escrow company will send the documents to the county for recording. This step officially transfers ownership, and you’ll receive the keys to your new home!
Congratulations! and I will be there to celebrate this moment with you and to make sure you have a smooth closing process.
And remember: I’m here to provide guidance, answer your questions, and ensure that your interests are protected, so feel free to reach out to me at any time.