Below are all the steps through Closing Day
Under Contract by Definition:
The definition of Under Contract: A purchase and sale contract for real estate where both buyer and seller have agreed to the same terms in writing within the time limit set forth in an unexpired offer or counteroffer. And, all parties have a copy of the accepted contract with everyone’s signatures and initials by any changes.
The Binding Agreement Date:
The Binding Agreement Date is the date when all parties have a copy of the accepted contract with everyone’s signatures and initials by any changes. That date becomes Day Zero on our contractual timeline. We are off to the races!
All contractual deadlines are calculated based on the Binding Agreement Date. The Georgia Association of Realtors (GAR) contract forms default to calendar days. It is also important to know that days end at 11:59 pm (yes, sometimes negotiations can go all the way to the wire – though very few people enjoy that). Our goal is to work quickly so our buying clients have ample time to review their options and we do not get pressed up against a deadline.
Don’t feel bad if you are pulling out a calendar and manually counting days just to be sure – many of the pros do that too.
Initial Burst of Activity:
- Order Home Inspection – We will probably have asked our #1 inspector for their first availability during the final offer negotiations so that we can get that done right away. But, if it is a weekend and we were unable to get that information, scheduling the home inspection is the first order of business.
- Make Formal Loan Application – the Lender needs to get a copy of the Binding Contract ASAP so they can get your files started.
- Submit Earnest Money – Buyers typically submit Earnest Money within the first 3 days online via App (Earnnest or DepositLink) or Wire Transfer.
The first week during Due Diligence is fast and furious. Lots of things have to be scheduled and done on the Buyer side to make sure the proper inspections get done. Texts are whipping around between agents and their clients to make sure everyone know what is happening and when. Gate codes, lockbox codes and alarm codes are crucial to get. Updates like “Running 10 minutes late”, “running early”, “running long, need another 30 minutes”, “all done here” are all welcome updates during what can be a stressful time.
Due Diligence:
You’ll have the opportunity to conduct a home inspection to check for any issues with the property.
- General Home Inspection
- Stucco Inspection (if applicable)
- Pool Inspection (if applicable)
- Pest/Termite Inspection
- Radon Test (takes 48 hours)
- Mold / Air Quality Test
- Sewer Scope (mostly older homes with older sewer lines)
- Zoning Questions
- Review HOA Documents
- Order an As-Built Property Survey (this usually takes more time than Due Diligence allows – let’s discuss)
This is your chance to get comfortable with the property’s condition and negotiate the seller’s agreement to make any concessions/repairs in order to move forward. It should be noted that negotiations may take a few days and involve getting contractor estimates before a resolution can be reached. Therefore, it is important to submit an initial list of issues to the Seller as soon as possible to allow for time to work through a mutually acceptable resolution. This resolution is formalized on a form called the Amendment to Address Concerns (ATAC).
If no agreement can be reached, you as the buyer have three options:
- Request and obtain a signed extension to Due Diligence (takes a signed contract amendment)
- Accept the property as-is (automatically happens
- Accept the Seller’s last unexpired offer to address some items
- Terminate the contract
After Due Diligence:
Once Due Diligence is successfully resolved, everyone can catch their breath for a minute. Communication will slow way down during these next couple of weeks.
- The next step on the Buyer side will be the appraisal (if there is one) which is ordered by the Lender.
- The nest step on the Seller side is to complete any agreed upon repairs and arrange for a mover.
Other items will be to schedule a closing time, relay utility info and get additional info to the lender or closing attorney as requested.
Right Before Closing:
About a week before closing, things crank back up – imagine landing a plane. There will probably be 200 emails and texts flying around in the days leading up to closing just to make sure everyone is on the same page and all goes smoothly. Some of the milestones will be:
- Securing Homeowners Insurance (Hazard Policy)
- Moving funds around to make sure they are available for the wire transfer the day before closing
- Obtaining “Clear to Close” from the Lender/Underwriter
- Review a preliminary Settlement Statement for accuracy – have your name(s) spelled correctly, correct county for property tax prorations, escrow account amounts look reasonable, credits showing )
- Final Walk Through conducted to review any repairs and make sure house is in good condition (no new issues).
- Check to make sure the Seller has fully moved out and all personal property has been removed (other than any items negotiated to remain)
- Wire the funds to close based on the amount from the final Settlement Statement the day before to make sure the funds arrive on time.
Closing Day:
We will have emailed you directions to the closing attorney’s office in advance. Please bring two forms of I.D. (the primary form is your Driver’s License). Closings for a purchase involving lender-issued financing usually take about an hour; cash closings take around 30 minutes. Both Buyer and Seller (along with their agents) typically attend the closing.