You Received an Offer … Now What?
The market is hot. You’ve got buyers at your doorstep around the clock and your home has only been on the market for three days. While you’re happy that you’ve got a contract in near lock-down, it’s all happening so … fast!
Here’s a look at what your contract-to-close timeline might look like.
Once you’ve received the offer, one of three things could happen:
1. You can accept the offer at what the buyer has offered
2. You can counter the buyer’s offer with a price that is closer to the original asking price
3. You can return the offer to the buyer without any counter If you reach a mutual agreement, the
timeline for contract contingencies kicks in the day after it was made.
The next milestones are:
1. An Option Period Begins.
This typically occurs in a 7 to 10 day window and gives the buyer the indisputable right to cancel the pending transaction. There is usually an option fee included in the real estate contract and doesn’t typically exceed $500. The purpose of the option fee is to provide a potential buyer with enough time to arrange inspections of the property that he or she intends to buy. Since option fees are generally paid directly to the seller and are immediately deposited by the seller, they’re rarely refunded.
2. Deposit Earnest Money.
Earnest money is the money deposited with the contract to show the buyer’s good faith intention to perform the duties of the real estate contract. The lower the amount of deposit, the lower the risk to the buyer if he or she fails to buy your house. This money is refundable to the buyer if the contract is terminated for reasons stated and allowed in the contract, like the inspection contingency. This money is also used towards the purchase of the home.
3. The Home Inspection.
The goal is to have the home inspection completely negotiated by the end of the option period. Once an inspection is completed, the buyer
may request repairs or a reduction in sales price of the home in lieu of repairs. Negotiations can still go back and forth until there is a mutual agreement. At this point, the buyer may still be able to terminate the contract and be refunded their money.
Once there is a completed agreement, your real estate agent will send it to the lender for approval. That’s where they pick up and schedule an appraisal. If the appraisal comes in at a lower price - which can happen - it will need to be addressed and negotiated. Either the buyer will have to bring additional funds to closing or the seller will need to accept a reduction in price or some combination of both.
You’re nearing the finish line! Once the lender has approved and cleared the conditions, they will issue a “clear to close.” The lender will then release the loan documents to the title company and all parties will agree upon an appropriate closing date. Then, a final settlement tatement called a HUD-1 will be reviewed and signed to show the final costs associated with the transaction sand the proceeds being paid to the seller. Next, you’ll start signing legal documents which will initiate the transfer of the deed. Then, the lender will release the funds and the closing will be complete!
I am here to help you navigate the process of selling your home. If you have any other questions about the closing process, or if you’d like to find out how much your home is worth, give me a call or shoot us an email!