Now that you have a home under contract, it’s time to follow through with all the promises you made, many of which must be completed within a specific time frame.
It’s important to know and follow the deadlines outlined in the contract to ensure neither party is in breech of the contract (which could result in an unwanted termination) and maintain forward progress for an on-time closing.
Here’s your cheat sheet to what needs to be done, and when…
WITHIN 3 BUSINESS DAYS FROM ACCEPTANCE DATE
Seller is to provide the Buyer with a copy of the Sellers Property Disclosure (SPD), if applicable. Then, the buyer has 3 business days from the receipt of the Seller Property Disclosure to to review the document and choose to:
Seller is to provide the Buyer with a copy of the Lead Based Paint Disclosure, if applicable. If this disclosure is found unsatisfactory by the buyer, the buyer has 10 calendar days from receipt of the Lead Based Paint Disclosure to inspect/assess the risk and choose to:
Buyer is to provide Earnest Money or Nonrefundable Deposit (if any), as per terms of contact.
TIME IS OF THE ESSENCE
The following items should be ordered as early as possible. The party responsible for paying for a particular service (as decided upon in the contract) is responsible for ordering the service to be done.
Buyer is to schedule an Inspection, if applicable.
Buyer and/or Seller are to order a Title Search. While there is no time outlined or this in the contract it is best to do it as quickly as possible so any defects found on the title can be cleared by the Seller prior to closing.
Buyer or Seller is to order a survey, if applicable. As per the contract, a new survey must be completed within 30 days prior to closing.
Buyer or seller is to order a Home Warranty, if applicable.
WITHIN 5 BUSINESS DAYS FROM ACCEPTANCE DATE
Buyer to make formal application for their home loan.
WITHIN 10 BUSINESS DAYS FROM ACCEPTANCE DATE
Buyer repair requests are due to the Seller. Once the buyer has conducted their home inspection, they will submit a list of repair requests, if any, to the Seller on a form call the Inspection Repair and Survey Addendum (IRSA).
Seller is to order a Termite Policy, if applicable.
Buyer must be able to obtain homeowner insurance. If the buyer is not able to obtain insurance, they must provide the seller with written notice from their insurance company and all parties will proceed with the necessary steps to terminate the contract.
Third party requirements. Third party requirements refer to issues pertaining to the home that arise during the execution phase of the contract which must be fixed by the seller in order for the contract to close. Some examples include appraiser required repairs, lead based paint repair requests, or items the seller needs to do to be able to obtain a termite policy. Any third-party requirements that surface throughout the process are to be presented to the seller in a timely manner. The seller has 5 business days from the day they receive a third-party requirement to respond to the buyer and either accept or reject their part in fulfilling these requirements.
WITHIN 3 DAYS OF CLOSING DATE
Buyer and Seller to receive HUD 1 Settlement Statement. The settlement statement outlines the finalized fees and loan terms for the buyer. The settlement statement outlines the finalized fees and pay off for the seller.
Each party will review and sign this document to acknowledge that the numbers are correct for closing day.
Closing takes place on the date stated in the contract.
Final Walk-Through. The buyer has the opportunity to walk through the home for a final inspection prior to closing to ensure the home is in the same physical condition as when they wrote the original offer and confirm any seller requested repairs are complete. The buyer will sign the final page of the IRSA, stating they are satisfied with this final visual inspection.
Buyer takes possession of home. The buyer will take possession of the home once the title and loan paperwork has been signed to finalize the sale.
* This timeline assumes the buyer is getting a loan and taking possession upon closing. Individual contracts may vary with agreement by both parties. Therefore, contract dates and deadlines may be added or changed from those stated in the typed contract.
* TIME in the contract is defined as follows: “Time. Buyer and Seller agree time is of the essence with regard to all times and dates set forth in the Real Estate Contract. Unless otherwise specified, days as it appears in the Real Estate Contract shall mean calendar days. Further, all times and dates set forth in the Real Estate Contract refer to Arkansas Central time and date. “
From Real Estate Contract (Residential), AREC 2018.
NICOLE BREKELBAUM (The Education Realtor of NWA) utilizes her background in education and real estate to provide homebuyers, sellers and first year agents with resources they can use to make more confident and informed real estate decisions. Nicole is the founder of the Northwest Arkansas Real Estate Guide and an Executive Broker at Collier & Associates in Fayetteville. www.theeducationrealtor.com