Many homebuyers mistakenly confuse getting an accepted contract on a home with closing the deal. Don’t be one of them. Texas REALTORS® refer to this challenging period as “contract to close.” Of course, getting a signed contract is reason for celebration for both the buyer and the seller, but there’s still a long way to go before the homebuying transaction can be successfully completed. There are a variety of things that can happen during “contract to close” to derail the process. While they may not halt the sale altogether, each can potentially cause lengthy delays and even escalate into a legal matter. Understanding some of the most common pitfalls can help you successfully close the deal.
Show me the money
You will need to have some funds available at closing, but your lender will provide you with a good faith estimate of all your closing costs within three business days of filing your loan application. Closing costs include charges for establishing and transferring ownership, and the costs of getting a mortgage, including the appraisal, credit checks, loan documentation fees, notary charges, loan origination and underwriting. So before the closing process begins, make sure you budget for the necessary funds.
On closer inspection
If you are looking at purchasing a home but still need to get the home inspected, consider purchasing an option period to protect yourself. An option period allows you to buy some time, without losing the contract or your earnest money, to have the property professionally inspected prior to closing. In fact, the option provision allows buyers to terminate a new-home or resale contract – for any reason at all – and still receive a refund of their earnest money. The length of the option period will vary depending on the terms of the contract.
It all depends
Contingencies make the contract dependent on some action, such as securing financing or selling an existing home before purchasing another. If either party fails to meet the contingencies as laid out in the contract, the sale could potentially fall through. What happens at that point depends on the circumstances and the specifics agreed upon in the contract.
Working on deadline
It’s important to meet any deadlines outlined in the sales contract. Failure to do so could delay the sale or allow the seller to find another buyer. If it looks like a deadline is unattainable, inform your Texas REALTOR® right away so she can help meet the deadline or get an extension if possible.
Getting cold feet
Some buyers and sellers find that somewhere between the contract and the closing process they get cold feet. Maybe the seller has decided that “moving up” isn’t the right financial decision at this time. Perhaps the buyer realizes the monthly mortgage will stretch her budget too thin. Whatever the case, getting cold feet happens. And it helps to know what to look out for – no matter what side of the transaction you’re on. If you’re the one having second thoughts, talk with your Texas REALTOR® right away. Discussing your situation may help you remember why you do want to move ahead after all – or you can work toward the best resolution rather than springing a last-minute surprise.
For more information about buying and selling in Texas, visit TexasRealEstate.com.
For your real estate needs, please contact Waymond Lightfoot (RE/MAX Genesis) at 210-386-5201.