First week: Offer to Purchase: material terms: ($1000 deposit). Mortgage loan preapproval in hand. Material terms of the deal are established:
Deadline for execution of P&S Agreement;
Mortgage contingency date and amount of loan;
Inspection contingency- date and amount of allowable repairs. Potential re-negotiation of purchase price depending on results of inspection report.
Condominium governing document review contingency (if applicable)
Appliance / Fixture inclusions / exclusions.
Second Week: P&S Agreement signed. Deposit balance of 5% of purchase price into listing broker’s escrow account. Legal and financial obligations of buyer and seller during the escrow period are established. Key events for buyer:
Complete mortgage loan application within 48 hours of P&S execution;
Listing agent schedules Appraisal, which buyer pays for. Appraisal report must show fair market value of the property that is equal to or greater than the purchase price.
Buyer complies with lender’s document requests diligently.
Fifth Week: Mortgage Contingency / Commitment Letter date.
Appraisal report received by buyer prior to expiration of mortgage contingency. If the report shows FMV too low, buyer either terminates or restructures the deal, depending on seller and lender options.
Commitment Letter: lender’s commitment to disburse the loan funds at closing.
Conditioned upon buyer satisfying any outstanding conditions such a verification of cash to close, ongoing employment, etc.
If letter is not received by the deadline, or if the letter contains conditions that are not “reasonably within buyer’s control,” buyer’s counsel will either terminate the deal or negotiate an extension of the deadline.
Seventh Week: Closing. Buyer and seller meet to exchange money for title deed & keys to the property.
Buyer’s cash to close=(Price + Closing Costs) - (Loan Amount + Deposit). Buyer brings a cashier’s check for the funds to close.
Closing attorney will pay off any outstanding mortgages, property taxes, and any other liens.
The deal is “official” when the deed is recorded. Only then will proceeds be released to seller and buyer take possession of the property.
Move in to your new home.