The Home Buying Process
Step 6 – Contract Deadlines
Congratulations – you are now under contract! This is where our work really begins.
Together we will review the deadlines that you are responsible for, such as inspection objection, survey, loan application, insurance, etc., to make sure you are on track.
You will schedule the inspection to be conducted within 5-8 business days of the contract. I have several references for inspectors, and I am required to be present at the inspection. I highly recommend that you be present for the inspection as well to learn about the house you are about to purchase. At a minimum, the inspector you hire should be certified by the American Society of Home Inspectors (ASHI). If they are not certified, the inspection report may be challenged. Budget for about $350 – $450 for the inspection, more for older homes that will need additional inspections.
I have a complete write-up on the inspection process in the buyer’s book because it is such an important part of the buying process. In some cases, it may be necessary to have more than one inspection, such as radon, roof, or furnace inspections in addition to the typical home inspection. The important thing to remember is that the purpose of the inspection is to identify any safety issues or defects that were discovered during the inspection.
After the inspection, we will sit down and discuss what we learned about the property and what you would like the seller to correct. Occasionally, the buyer may decide that there are just too many issues with the home and cancel the contract.
If the buyer decides to proceed with the purchase, then we will draft up the Inspection Objection with items to be corrected by the seller. If you are purchasing a distressed property (estate sale, short sale, foreclosure, or bank-owned property) you will likely be purchasing the property “As – Is” and the seller will most likely refuse to make corrections. Of course, there are always exceptions, especially if there are safety issues.
In my opinion, the inspection process is the most stressful part of the transaction. Just when you thought you had agreed on the price, now everything is up for re-negotiation if there are a number of items to be corrected by the seller. It is critical to meet all the deadlines for the Inspection Objection and Inspection Resolution from the seller. When the seller agrees to make corrections, they are documented in the Seller’s Resolution and agreed to by the buyer.
In the meantime, you will be contacting your insurance agent to verify that they will ensure the property and at an acceptable cost. Additionally, you need to keep in close touch with your lender to complete the loan application process and provide all required documents to the underwriter. If you are not able to secure a loan or the conditions of the loan do not meet your requirements, you can cancel the contract in writing prior to the loan conditions deadline, but the sooner in the process the better for all parties.
You will need to decide if you need a full survey or an Improvement Location Certificate (ILC). If you are buying in a residential neighborhood that was platted in the last 10 to 15 years, you may only need and ILC if required by the lender or title company. If on the other hand, you plan to install a fence or the lot was platted many years ago or you are concerned about a neighbor’s fence or garage in relation to your property line, you should order a complete survey. This is something we will discuss in more detail. The estimated cost varies depending on if it is an ILC or survey.
Contact the utility companies and arrange to have the utilities put in your name on the day of closing, so you don’t have any unexpected surprises, like no electricity on the day you move in…
If you need to cancel the contract at any point during the period between the contract date and your last deadline, typically loan conditions deadline, and you can justify the cancellation in writing prior to the deadline, you will receive your earnest money back.
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