You’re ratified! And excited…after all the phone calls and the texts letting everyone know, “hey, we bought a house,’ reality sinks in.
“NOW what do we do?”
The first order of business, really, is for me to go through each of your contingencies, determine when each expires, what action is required before then and make a note on my calendar. I’ll send you an outline of all of this, of course, so you will have a heads up as to what is going to be going on over the next few weeks.
Back to contingencies. Some of our common contingencies are:
Home Inspection: Let’s say we have 10 days to conduct the home inspection, from the date of ratification. That means that by 9 pm (for the purposes of your contract, the day ends at 9 pm) on day 10, we must have the complete home inspection report and the home inspection contingency removal addendum to the Seller’s agent. We can void the contract on the basis of the home inspection within this 10 day period, without any risk of loss of your earnest money deposit.
You can use any home inspector of your choosing; if you would like some recommendations, I have a list of inspectors other clients have used with good results.
You can read more about the home inspection in my post The Home Inspection.
Financing Contingency: This is a contingency that does not expire automatically. So, typically, if the Seller does not request that we remove it, we just let it ride. If the Seller does request we remove the contingency, we will proceed to do so, provided your lender is sure there are no problems with your getting your financing. Once this contingency is removed, your earnest money deposit can be at risk. For a more detailed look, read my post about the Financial Contingency.
Appraisal Contingency: Your lender will order the appraisal. If the property appraises, we simply remove this contingency. If the property does not appraise, then we ask the Seller to reduce his price to the appraisal price. If he agrees, we move forward. If he does not agree, we can negotiate or void the contract, with no risk of loss of your earnest money deposit.
Homeowners Insurance: You should make application for homeowners insurance as soon as possible to insure there are no insurance issues with the property itself.
HOA/Condo Documents: If you are buying a home in neighborhood with a homeowners association or a condo, you will receive the governing documents for the association. Once received, you have 3 days to review and at this time, you may void the contract based on those documents.
Don’t worry, my job is keep on top of this stuff and let you know if I need anything from you during this time period. I’ll coordinate with your lender and the title company as necessary, as well as with the Seller’s agent, as we all work toward a smooth and stress-free settlement.