What We Mean When We Say We Work at Your Pace
Photo by Alex Guillaume on Unsplash
One of the things we pride ourselves on is giving our clients ample room to breathe during the home buying process. We strongly encourage buyers — especially first-time buyers — to take their time, see as many homes across multiple price ranges, archtectural styles, locations, and so on, before really settling in on what they want. It’s important to us that our buyers and their homes are suitably matched.
However, once you’ve made the decision to put in an offer on a property, a series of events kick in that occur on their own timeline. It’s imperative that you be prepared for them lest the deal fall apart. Here’s what to expect.
Making the Offer
When there is significant interest in a property, the listing agent may set a date at which they will receive offers. Otherwise, they may take them as they come. If you want to make an offer, we can signal to the listing agent that we’re preparing to do so.
Once offers are received, they may be reviewed that same day, or perhaps the next. Offers typically are valid for 24 hours.
If all goes smoothly, the seller may accept the offer, and you’re in contract. Alternatively, they may counter on terms such as price, contingencies, timelines, or other factors. (This is why we prefer to write as clean an offer as possible.) You can accept the counter offer, or counter back with revisions.
The timeline on each of these cycles is set by the agents. In the case where an agent wants to put pressure on either side, they may set the deadline to as little as a few hours. Be present.
Once both sides have agreed to the terms, the contract is ratified and you enter escrow.
While in Contract
The contract is ratified, and escrow begins. A typical escrow may last 17 to 21 days, though in the case of cash buyers we have had escrows as quick as 5 days, and in other cases ones that stretch more than a month. During this time there are a series of deadlines to pay attention to. We will provide you an escrow timeline. A sample one is below:
| Event | Date | |
|---|---|---|
| Acceptance Date: | Day 0 | |
| Deposit to Title (EMD): | Day +3 | |
| Seller Documents: | Day +5 | |
| Preliminary Title Report: | Day +5 | |
| Insurance Contingency | Day +9 | |
| Informational Access to Property: | Day +9 | |
| Loan Contingency: | Day +11 | |
| Appraisal Contingency: | Day +11 | |
| Arbitration Liquidated Damages: | All signed | |
| Final Walk Through: | 5 Days Prior to Close | |
| COE Date: | Day +21 |
Let’s break it down:
The first and most urgent thing you will need to do is submit an Earnest Money Deposit (EMD). This is a 3% deposit on the sale price submitted to escrow that cements your commitment to the purchase; if you exit the contract from this point forward, you risk losing this deposit to the seller. (This is referred to as liquidated damages.) Depending on the terms of the contract, the EMD must be received within up to three calendar days of ratification, not business days. This can be submitted by personal or certified check or by wire transfer. Do not initiate an ACH transfer as they can take more than three days. If the EMD is not received within three days, the contract may be annulled (canceled by the seller).
Side note: If you are financing your purchase, do not make any large financial moves during escrow without consulting the lender first. Don’t change jobs or make any significant purchases. Keep your cashflow steady. Lenders like stability. The lender will also be requesting more information from you and about the property.
If you have contingencies on your offer, such as inspection, financing, etc., each of these will be assigned a date by which they must be satisfied. For example, there may be a 14-day window to waive the inspection contingency, during which time you can schedule an inspection, receive the report, and decide whether and how you want to proceed. We will help you set these expectations.
It is a good idea to start sourcing home insurance even before making an offer, as it has become increasingly difficult to get covered. Here’s why.
If a deadline approaches and you are unable to waive the contingency, for example if the inspection report has not come in or you have not yet found insurance, we may be able to negotiate some flexibilitym often involving an addendum to the contract.
If a deadline is not met, the seller’s agent may issue a minimum two-day notice to perform. This sets a firm deadline which, if not met, allows the seller to cancel the contract and keep your EMD.
Other documents and tasks are required along the way. Everyone working behind the scenes will ensure that things stay on track and nothing falls between the cracks.
A few days before closing, you will be able to do a final non-contingent walkthrough to inspect the property. This is just to confirm the property is in the same condition as when you last saw it. It’s a good opportunity to make any measurements, or bring in any contractors you may intend to work with if you plan to do any remodeling. It’s a good opportunity to make measurements or bring in contractors you intend to work with if you plan to do any remodeling.
In the last days before closing, once all contingencies have been waived and reports are on file, you will sign closing documents. These documents require a physical (wet) signature, so plan to be present. If you are out of the country or unavailable, we can arrange for a mobile notary to meet you, or you can appoint someone limited power of attorney to sign on your behalf.
You will also be expected to transfer the remainder of the deposit, if you’re financing your purchase, or the remainder of the purchase price if it’s a cash purchase. Again, do not use ACH.
If you need to liquidate assets or move money to cover the EMD and remaining transfer, make sure you do far enough ahead of time.
This may seem overwhelming, but we will be here to hold your hand at all times. Our Transaction Coordinator in particular will keep things on schedule.
After Closing
When the deed is recorded with the county, escrow closes. Congratulations! You now own your new home. We receive the keys from the seller’s agent, and bring them to you. From this point on, your schedule is your own. Go shop for furniture and appliances. Think about how you’d like to design your space. Move in whenever you like. Relax, and enjoy your home sweet home.