Wednesday, July 24, 2019 / by Barry Owen
What's the hurry?
The first 14 days after the Binding Agreement, most of the important components happen.
If a transaction were to fall apart, 98% of the time it would happen as a result of unsatisfactory discoveries during this 15 day period.
Most of the "Contingency Clauses" in the contract have time deadlines to be "satisfied" within this initial 15 day period.
Ultimately, the goal is to complete as many of the contractual requirements as quickly as possible after the binding agreement.
Within 3 days of Binding Agreement:
- Buyer to furnish Earnest Money Deposit to be held by a Real Estate Broker (Traditionally the Listing Company). It's important to do this with a personal check, Certified check, or wire transfer, so the lender can "source" these funds. This deposit remains in a dedicated Escrow Account until the transaction closes, at which time it is returned to the Buyer at the time of final settlement . . . or released by agreement of all parties or other legal remedies.
- Make loan application, send copy of Purchase and Sale Agreement to lender and instruct lender to order credit report. After this is done, the Lender can issue a "Loan Approval Letter" subject to verification of stated in the application and underwriting requirements. Forwarding this Loan Approval Letter to the Seller satisfies this 3 day performance deadline.
- Order all required Inspections - Most Purchase Agreement provide for an "Inspection period" ranging from 5-15 days from the Binding Agreement Date. During this period of time, the buyer may (at Buyer's expense) perform or hire professionals to inspect the property. These inspections are not required by law and are being done to satisfy the Buyer. Inspections typically include structure, systems (Heat and Air, Plumbing, Electrical, Roof, Crawl space, water intrusion), "Wood Destroying Insects - Termites", Fungus/mold, air quality, radon. Any and all inspections desired by the Buyer must be completed quickly enough for the results to be known before the end of the "Inspection Deadline.
Of course, your "Vital Few Pareto Realty REALTOR" will advise and counsel you through this process.