Under Contract – Next Steps

Navigating a Real Estate Purchase Agreement: What Homebuyers Should Expect

Congratulations on entering into a real estate purchase agreement! As you move forward in the homebuying process, there are important steps and contingencies to be aware of to ensure a smooth transition from contract execution to the closing table. Here’s what you should expect:

  1. Contingencies in the Contract:
    • Financing Contingency: Allows the buyer to secure financing within a specified timeframe and provides an opportunity to cancel the contract if financing falls through.
    • Inspection Contingency: Gives the buyer the right to conduct a professional home inspection to identify any issues. If significant problems are discovered, the buyer may negotiate repairs or terminate the contract.
    • Appraisal Contingency: Ensures that the property appraises for the agreed-upon purchase price. If the appraisal falls short, the buyer can renegotiate or back out of the deal.
    • Title Contingency: Ensures the property’s title is clear of any liens, encumbrances, or title defects. If issues arise, the buyer can request corrective action or cancel the contract.
  2. Protection of the Buyer’s Escrow Deposit:
    • In Florida, the buyer’s escrow deposit is typically held by a third-party escrow agent, such as a title company or attorney.
    • The escrow agent safeguards the deposit until the closing, ensuring it is protected and used appropriately in accordance with the contract terms.
    • Disbursement of the escrow deposit is contingent upon the successful completion of the contract and mutual agreement between the buyer and seller.

Important Steps from Contract Execution to Closing:

  1. Secure Financing:
    • Begin the mortgage application process promptly after contract execution to meet the financing contingency deadline.
    • Work closely with your lender to provide necessary documentation and respond promptly to any requests.
  2. Conduct Inspections:
    • Schedule a professional home inspection within the inspection contingency timeframe.
    • Review the inspector’s findings and discuss any concerns with your real estate agent.
  3. Negotiate Repairs:
    • If the inspection reveals significant issues, negotiate repairs or credits with the seller.
    • Your real estate agent can guide you through the negotiation process to ensure your best interests are represented.
  4. Appraisal and Title Work:
    • Allow time for the appraisal to be completed, ensuring the property’s value aligns with the agreed-upon purchase price.
    • Coordinate with your title company or attorney to ensure a thorough title search is conducted, addressing any title issues that may arise.
  5. Review Closing Documents:
    • Prior to closing, carefully review all closing documents, including the Settlement Statement (HUD-1 or Closing Disclosure) and the final loan documents.
    • Address any questions or concerns with your real estate agent or attorney.
  6. Conduct a Final Walk-Through:
    • Schedule a final walk-through of the property shortly before closing to ensure it is in the agreed-upon condition.
    • Verify that any negotiated repairs or agreed-upon changes have been completed satisfactorily.
  7. Closing Day:
    • Attend the closing appointment, typically held at the office of the title company or attorney.
    • Review and sign all necessary documents, including the deed and mortgage paperwork.
    • Bring any required funds, such as the down payment and closing costs, in the form of a certified or cashier’s check.
  8. Key Exchange and Possession:
    • Upon successful completion of the closing, the keys to the property are typically exchanged, and possession is transferred to the buyer.

Remember to consult with a qualified real estate agent like Rusty Hanna throughout the process to ensure a smooth and successful transaction. They will help guide you through the steps, protect your interests, and provide expert advice to make your homebuying experience in South Florida a positive one.