Signing a Contract
Coming to an agreement on price and terms between the seller and the buyer is the first step. The typical home spent 58 days on the market in November 2020, 13 days less than the same time last year nationwide. The seller will either accept the offer, reject it outright, or issue a counteroffer. The procedure can involve just one counteroffer, or it might evolve into a multitude of counteroffers going back and forth between buyer and seller for a period of time. At some point, ideally, there’s a meeting of the minds. The listing status then changes from an active listing to a pending sale.
Time for Inspections
It’s critical for buyers to get a home inspection prior to closing. Other types of inspections might be advisable as well, depending on the age, condition, and location of the property. A buyer might further negotiate with the seller if an inspection turns up an unexpected defect. This is particularly the case if the defect is one that will cost a great deal to repair. Then, of course, the repairs take time, and the house isn’t sold yet when they’re accomplished. It’s not even considered sold when and if the buyer is satisfied with the results of the inspections.
The Buyer’s Loan Is Approved
The buyer’s mortgage file goes to underwriting after all the buyer’s supporting documents have been received by the lender, and after an appraisal has been completed. This underwriting process can take anywhere from a few days to a few weeks. The appraisal must support the agreed-upon purchase price. More negotiations will take place or a new appraisal might be ordered if the appraiser submits a low appraisal. The home still isn’t considered sold yet after the loan is approved.
A Contingency Sale
A buyer might have to close escrow on an existing home before moving forward with the purchase of the new home. This is known as a contingency sale and the contingency must usually be satisfied or released in order to move forward with the contract. One way to satisfy a contingency is to sign a release of contingencies or perform some other act, such as depositing all funds to close escrow. But even if the buyer deposits the entire purchase price in cash, the home might not be completely sold yet, especially if the buyer can only be held liable for liquidated damages in the event of default.
