After Executed Contracts

After executed contracts, you can relax a little, but just a little, as there is still a lot of work to be completed prior to the closing. Many people will be working for you at this time in order to finalize the transaction and ‘get closed’. Not everything will be in your control, so it is important that you have your ‘team’ available in advance, and that you trust them to get everything completed in your best interest.

Closing Date: This is probably one of the most confusing of any terms in the contract, causing much frustration for both buyers and sellers. If the contract reads ‘on or about’, then the date in the contract is a ‘target date’ not an absolute date. It is very likely that the closing will NOT actually be on the specific date, as stated in the contract. The buyer and/or seller can postpone the date of the closing for up to 30 days. If one party (let’s say the seller) wants to extend the closing 15 days after from the ‘on or about’ contract date, even if the other party – let’s say the buyer – doesn’t want it extended, the date will be extended! Therefore when scheduling things like mortgage rate lock-in dates, movers, lease terminations, contract dates to purchase or sell another property, etc., great caution must be used!

Showing the Property: The property will no longer be shown as ‘for sale’. Any agent requesting to show the home will now be told that there are ‘executed contracts’ on the property.

WHAT THE BUYER WILL BE DOING:

Mortgage Process: If you are getting a mortgage you will now submit the necessary paperwork to get a ‘mortgage commitment’. A mortgage commitment is a term banks use, meaning the bank has reviewed and confirmed all the information about the buyers, and that the bank has officially approved the buyer to receive the money for the mortgage. In NY State, this entire process usually takes about 45 days, but it can vary tremendously, depending on the number of applications the bank is processing and the type of loan being processed. During a decrease in interest rates, the banks may be deluged with re-financing request, thereby extending the amount of time it takes to obtain a mortgage commitment.

Appraisal: One of the items the bank providing the mortgage will require is an appraisal of the property. The bank will send out an appraiser to the property usually within one to three weeks after the bank receives its copy of the executed contracts. If a buyer is applying to more than one bank (in order to shop for the best rate), there may be more than one appraisal. After the appraiser visits the property, the written appraisal is usually completed and submitted to the bank within five to seven business days.

Next week, I’ll cover surveying the property, terminating a lease, and conducting the title search; the final step for the buyer’s attorney before scheduling a closing.

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