Our Offer Was Accepted - Now What?
This is the question that I sometimes receive from buyers once they have an accepted offer. I generally anticipate the question by outlining the important dates and items that need to be addressed and email it or discuss it with my clients as soon as we have that accepted offer. There are many details that are involved in a real estate transaction so it is important to stay on top of them. (Each state is different in its practices and norms so keep in mind that this is written for a Massachusetts buyer.)
The dates and deadlines are pretty much governed by what is in the final accepted Offer. And a well-written Offer takes into consideration the upcoming timelines so that they are realistic.
Home Inspection Deadline. That means that the buyer has until that date to hire a licensed home inspector and, if necessary, rescind the contract upon receiving unstatisfactory results of the home inspection. Therefore, it is important to schedule this as soon as the Offer is accepted. Typically there is a ten-day window from date of accepted Offer until the date that the inspection must be completed, although the time period is sometimes the subject of negotiation when the Offer is negotiated. Your buyer agent can give you a list of licensed home inspectors.
Mortgage Application Deadline. The offer will contain a date by which you have to formally apply for at least one mortgage. Some, but not all mortgage brokers may consider this requirement as satisfied during the pre-approval process. However, it is important to touch base with your mortgage broker or lender as soonas you have an accepted offer to make sure you have met this deadline. Your buyer agent should also be in touch with the mortgage broker and provide a copy of the accepted offer.
Purchase and Sales Agreement Deadline This is the deadline for the parties to sign and execute a Purchase and Sales Agreement. This date is after the Home Inspection Deadline so as to allow for negotiation of any home inspection issues into the final agreement. The Purchase and Sales Agreement completely replaces and essentially nullifies the original Signed Offer Contract.
Mortgage Commitment Contingency Deadline. This is the deadline by which you need to receive your Mortgage Commitment from your lender. The buyer has until this date to either receive a mortgage commitment or rescind the contract based upon lack of financing. After this date, unless you exercise your rights under this contingency, you must either proceed with the purchase (with or without financing) or risk losing your deposit. It is important that you and your buyer agent be in close contact with your lender to insure that all information is provided timely so that this deadline is met. In the event that the lender needs more time to issue your mortgage commitment, you can request an extension of this deadline from the Seller. Any agreed upon extension must be signed and in writing.
Closing Date. This is the deadline to close on the purchase of your home! Before this date, you and your buyer agent will have a walkthrough of the property to make sure it is in the same condition (wear or tear notwithstanding) as at the time of the home inspection. Your attorney should have reviewed the essential Closing documents, particularly the Deed and the HUD-1 Settlement Statement. Once again, your buyer agent will remain in close contact with the closing attorney and lender to insure that this deadline can be met and, if necessary, request an extension from the Seller
There are a lot of important dates and deadlines to meet between the accepted Offer and Closing. Buyers need to be aware of these dates and also need to make sure they have competent representation from their buyer agent and attorney to make sure that their interests are protected.