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All dates referred to in your real estate sales contract are based on calendar days, not business days. Important Buyer action items are listed throughout this page.
You may download a copy of the Consumer Finance Protection Bureau's Home Loan Toolkit. This step-by-step guide provides Buyers helpful information about the hom loan process.
Reaching a successful real estate closing requires paying attention to an incredible number of details. I will work closely with you to make sure all details are handled. Remember, all dates referred to in your real estate sales contract are based on calendar days, not business days. Please note that contracts for resale homes will differ slightly from contracts of new home builders. At the end of this page is a checklist that may be downloaded to remind Buyers of important action items.
I offer my clients access to all real estate contract documents through the RE/MAX Roundtable document system. After contracts or addenda are executed by all parties I upload them to the site for easy access for my clients.
Buyer Action Item: Provide checks for earnest money and option fee money.
Home buyers should be prepared to deposit earnest money and an option fee immediately upon acceptance of an offer of a resale home. Some sellers will require certified funds however others may accept personal checks. The earnest money and the option fee will need to be two separate checks as the earnest money goes to the title company and the option fee goes directly to the seller, with the checks made payable accordingly to each.
Please note this important item, the time performance on the option fee in the Texas Real Estate Commission promulgated contracts require that the option funds be delivered to the Seller or the Sellers agent within 3 days after the effective date of the contract by 5:00 pm local time. If the Buyer fails to pay the option fee to the Seller with the time prescribed, the option period will not be a part of the contract and the Buyer shall not have an unrestricted right to terminate the contract.
For the earnest money the buyer has "reasonable time" after the contract is executed by all parties to deposit the earnest money. Buyers should deposit earnest money as soon as possible after the contract is effective. Failure to deposit the earnest money in a timely manner could result in the Buyer being in default.
Buyers will be notified if the funds should be provided to me to deliver to the Sellers agent(s) or directly to the title company. If you have a preference of a real estate title company be sure to let me know.
Special note regarding new construction home purchases: If purchasing a new construction home, the local area builders typically require earnest money and can also require deposits on structural options upgrading the base level floor plans to be paid at the time of contract signing. Also, new home builder contracts do not include "option periods" so the information regarding option periods in this page would not be applicable.
Buyer Action Item: Schedule your property inspection and provide inspector contact information to Nancy David, Realtor, and request a CLUE report from your insurance agent if interested in this information.
An option fee is paid at the time of execution of the sales contract from the buyer to the seller for the unrestricted right to terminate the contract within a specified time frame called the “option period”. The time performance for the option period is calculated by starting with the first day after the effective date of the contract, and counting the number of days specified to reach the last day by 5:00 pm local time, for performance.
During the option period is when the buyer should perform any pertinent inspections, and negotiate any needed repairs, if any, that are discovered during the inspections. Buyers are able to choose their own inspectors.
In addition to hiring a general inspector, I also suggest having the heating and air conditioning systems checked by a licensed HVAC service professional, as well as having a roofing company inspect the roof. Although these inspections will incur slight additional costs to the buyer above the cost of the general inspection, they will provide a more comprehensive review of the condition of these two systems.
A listing of some area inspectors is on the Service Providers page that you are welcome to contact.
Please schedule all inspections as soon as possible after acceptance of the offer. Doing so will allow maximum time for negotiating any repairs or treatments if needed. Upon selection of your home inspector, please have them contact my office for instructions to access the property and so that we may notify the Sellers and their agent of the date and time. Payment for the home inspection is usually made to the inspector(s) at the time of service.
Buyers should review their inspection reports in detail even if the inspection was attended in person. Any questions should be directed to your inspector.
Once the inspection is complete, please have your inspector forward a copy of the report to my office. As soon as the report is received you will be contacted to review and discuss it together. Please be sure to mention any issues or needed repairs or treatments that are of concern. I will then contact the listing agent to negotiate those items for you prior to the expiration of the option period.
Be sure to visit the Tips and Questions for Home Inspections page of my web site.
Buyers can also view information about Pest or Wood Destroying Insect inspections at the Insect Assassins Pest Control web site. For more information about any past insurance claims history on the property, Buyers may discuss a CLUE Report with your insurance agent.
New construction home buyers may also have their home inspected. Buyers can elect to have incremental specific inspections such as foundation, structural, electrical, and plumbing inspections done during construction or just have a general inspection after the building is complete and prior to walk through and closing.
Buyer Action Item: Contact your lender/loan officer and gather all requested loan documentation items and submit as soon as possible to your loan officer.
Mortgage or home loan underwriting is the process a lender uses to determine if the risk of offering a home loan to a particular borrower under certain parameters is acceptable. Most of the items that underwriters consider fall under the three C's of underwriting: credit, capacity, and collateral (the property).
A copy of the sales contract is also forwarded to your loan officer immediately upon contract execution by all parties. If your contract includes a Third Party Financing Condition Addendum, this is your financing contingency and allows a specific number of days for the underwriting of your loan. Prior to the expiration of this time frame the Buyer will need to satisfy all of the lender’s financial requirements relating to assets, income, and credit history. It is very important to respond to all requests for information or documentation from your loan officer as quickly as possible. Loan officers typically request copies of basic financial records at the time of the loan application that is most commonly requested, however, during the underwriting process, your lender will probably request additional supporting documentation. It is suggested that you contact your loan officer immediately upon notification of the accepted offer to determine exactly what they will need to complete and submit your loan for approval.
Some lenders will require that the fee for the appraisal be paid prior to submitting the loan to underwriting. Please speak with your loan officer for additional information.
Please remember, your sales contract contains time performance dates for financing approval and your loan officer or lender must receive all requested documentation for your loan before your loan packet can be submitted for processing and underwriting. Delays in providing requested documentation reduce the amount of time your lender has to work on your file. Sellers are not contractually obligated to extend time frames. If a Buyer exceeds the time performance stipulations in their contract and an issue arises on receiving loan approval or if the lender is not ready to close in time, not only is the Buyers earnest money at risk but it also puts the Buyer at risk of defaulting on the sales contract.
Buyer Action Item: Approximately 15-20 days after title is opened for your home purchase transaction, you will receive a copy of the Title Commitment provided by the title company. Please take a moment to look over this document, especially Schedule C, and if you have any questions feel free to contact either my office or the title company directly.
A copy of the executed contract and your earnest money is immediately delivered to the title company. The title company will begin the title search and examination in order to provide a title commitment. The title commitment is a commitment for title insurance based on the results of a title search and is a summary of the title conditions including title defects, liens, etc. It also identifies conditions to be met in order to insure the proposed real estate transaction and is an agreement to issue a title insurance policy upon payment of the premium.
Closing 101 is an educational website offered by The American Land Title Association covering all aspects of the title process.
Buyer Action Item: Shop for and secure home owners insurance.
During loan processing and underwriting, Buyers should shop for and secure coverage for insurance. Proof of coverage from your provider, usually referred to as an "insurance binder" will need to be provided at just prior to closing or may be requested by your loan officer. Payment can either be made in advance, which will require a proof of full payment, or may included as your closing costs and paid by the title company from closing funds. Please check with your lender for their guidelines.
Prior to closing the title company will need an "Insurance Binder" from your provider/agent. Once your selection has been made, please contact the title company and provide them with your information. You may also or have your insurance provider/agent provide the information to the title company.
Please note that even for cash transactions, the new 12 month home owners insurance policy will need to be paid in advance or at closing.
Regardless of inclusion on a contract, a home protection program, also sometimes referred to as a home service contract or home warranty, is a valuable investment and I highly suggest them for my clients. More information about Home Protection Programs is available in the Client Center section of my web site. Please review the information on the various plans to make your selection. I'd be more than happy to answer general questions on the programs but for questions or clarifications on specific coverage's it is suggested that you contact the provider directly to ensure accurate, first-hand information. Once your selection has been made, let me know your choice of program and plan level and we will order it for you with coverage starting the day of closing.
Home protection programs are also available for new construction homes
Buyer Action Item: Select home protection program plan and notify me of your choice. Some contracts may include terms with the Seller paying for a home protection program for the Buyer.
Typically upon loan approval, a new survey, if needed, and the appraisal will be ordered as applicable. Please note that some lenders may require the appraisal to be submitted with your complete loan application for underwriting so some appraisals are ordered before loan approval. Typically the appraisal is ordered by your lender and the survey is ordered by the title company. Payment for these items will vary and will be required either at closing or could be at the time of, or prior to the service by the provider.
Buyer Action Item: Transfer utilities, change of address, other items needed for your actual move.
There is a Tools For Your Move page in the Client Center section of my web site that contains helpful information to help prepare for your move. Also, be sure to check out the About the Area section of my web site for information on area including information on Schools, Property Taxes, and Entertainment and Activities. I also have links to many of the area Home Owners Associations in the Client Center section of my web site.
Buyer Action Item: Review preliminary Closing Disclosure then sign and return to your Loan Officer.
At least three days before closing your Loan Officer will provide a copy of the Closing Disclosure. Once you receive a Closing Disclosure I like review it with Buyers prior to closing so that you are completely comfortable at the closing table. Your loan officer will review the information with you prior to closing also. The figures contained in the preliminary closing disclosure could slightly adjust prior to closing. Examples of these circumstances that do not require a new 3-day review but still require an updated disclosure are: seller credits for unexpected discoveries on a walk-through; payments made at closing for items such as real estate commissions tax prorations or amounts paid into escrow; or typos found at the closing table.
Buyer Action Item: On the day of closing Buyers should bring a photo id, such as a drivers license or passport, and a cashiers check payable to the title company for the funds required to close on your purchase.
Prior to closing my office will send you the address and direction for the title company.
Usually on the day of closing, or the evening before for an early morning closing, I suggest my Buyer clients to do a "walk-through" of the property to ensure all negotiated repairs have been completed by the seller and the property is a satisfactory condition. Occasionally, based on the type of repair or treatment performed by the seller, Buyers might consider an earlier walk-through in addition to their final walk-through.
For buyers of new construction homes, the builders will provide a "home introduction meeting" after construction is complete and at that time buyers may request repairs or corrections to items that are of concern. Usually a final walk through is completed the day before closing.
Below is a checklist form that may be downloaded for reminders of important actions items as we work towards closing.
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