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Buyers Timeline

Earnest Money, Inspection & Appraisal

You have a fully executed contract and now it’s time to make sure everything goes smoothly from contract-to-closing.

An executed agreement is a legal contract between a potential purchaser and the property’s seller. Some important tips to keep in mind to guide you through the process:

  • Keep written records of everything.
    For the sake of clarity, it will be extremely useful to transcribe all verbal agreements including counter-offers and addendums and to convert them into written agreements to be signed by both parties. Your Weichert® Realtor will assist you in drafting all the paperwork for your purchase and make sure you have copies of everything.
  • Stick to the schedule.
    Now you have chosen your offer, you and the seller will be given a timeline to mark every stage in the process of closing the real estate contract. Meeting the requirements on time ensures a smoother flow of negotiations so each party involved is not in breach of their agreements. During the process we will keep you constantly updated, so you will always be prepared for the next step.

Earnest Money

Earnest money is a good faith sum of money given to bind a contract. Your contract outlines how much earnest money you put forward to demonstrate your eagerness to purchase said property and who is to hold the earnest money in their trust account. Your contract will also outline how earnest money is to be handled if one party is to default on the contract. Remember that earnest money is to be taken very seriously and shows your true commitment and willingness to purchase the property.

A Few Helpful Must-Know Escrow Facts

How to close real estate in Auburn
  • Escrow instructions should specify in writing how and under what conditions monies will be disbursed, especially if the transaction doesn't close.
  • If a transaction fails to close as scheduled, monies may continue to be held in escrow provided there is no written demand from one party to cancel the contract. Monies are typically held after the closing date if a date to obtain the loan has passed but the parties still want to proceed with the transaction.
  • If the transaction is cancelled by either party, the agent holding the escrow monies can not disburse any funds until all parties agree in writing how to disburse them.
  • If parties can't agree on how to disburse funds, the escrow agent may file an interpleader, which names all the parties that might have an interest in the monies and asks a court to decide how to disburse the money. This can be a very costly endeavor and in many situations the parties will agree how to disburse the funds. Otherwise, an escrow agent may be obligated to keep funds indefinitely.

    Source (REALTOR® Magazine, Mar. 2005)

The Closing Agent

Either a title company or an attorney will be selected as a closing agent. The closing agent represents the lender if you are financing your home and will research the complete recorded history of the property to ensure the title is free and clear of all encumbrances by the date of closing and all new encumbrances are properly added to the title.

Inspections

Once your offer is accepted by the seller you will need to have a licensed home inspector examine the property within the timeframe that was agreed upon in your executed contract to purchase. The timeline to address items noted in your home inspection is also outlined in your purchase agreement. Since Alabama is a “caveat emptor” (buyer beware) state it is highly recommended you have a home inspection done prior to closing on your property. You may also elect to have different inspectors inspect the property such as those who specialize in specific areas (i.e. roof, HVAC, structure…).

Appraisal & Lending

It is imperative you keep in close communication with your lender, who will let you know when additional documents are needed to keep your loan process moving along. If the contract is conditional upon financing then your property will be appraised by a licensed appraiser to determine the value for the lending institution, via a third party. An appraisal is an important part of the home buying process because it assures the lender that the property has adequate collateral to make the loan.

Your Weichert® Realtor is an important asset in this step of the process because they can help you navigate through the legal jargon, to ensure the contract closes in a timely manner