Congratulations! Your home is under contract!
You’ve entered what is called the “pending” period. If your buyer is getting a loan, this period will typically take 30-45 days in NWA.
This is a time of collaboration between you and the buyer. You need to know what you agreed to, follow through and adhere to the strict timelines in the contract.
Throughout the pending period, your major tasks as a seller include:
Are you buying another home?
If you’re purchasing your next-step home upon the sale of this home, then you’ll need to simultaneously complete the necessary buyer steps for your new property during this time period.
For specifics on buying a home in NWA, check out our buyer’s guide here.
The major buyer responsibilities include:
Throughout the pending period, your agent is a busy bee – s/he is:
The length of the execution phase is set by the closing date stated on your contract. However, there are multiple time allotments set within the contract that must be adhered to.
This is a time of collaboration between you and the buyer. You need to know what you agreed to and follow the strict timelines in the contract to get to closing on time and without problems.
Once the title company receives a copy of your contract (from your real estate agent) they will begin researching your property to confirm that it is free of any liens or disputes.
If your contract is contingent on an inspection, it’s likely your buyers will hire a licensed home inspector to take a detailed look at the operating features, overall safety and maintenance aspects of your home. Based on their findings it may be necessary for buyers to bring contractors or repairmen to the property to get quotes.
Inspections typically take 3-4 hours, or more, depending on the size of your home. You should properly prepare your home for the inspection so the inspector can easily access all areas of your home. And, it is best practice for you to leave your home for the inspection (just as you did for showings).
It will be to everybody’s benefit for the following items to be addressed prior to the home inspection.
Make sure all utilities, water, electric, and gas are on and all pilot lights are lit.
Write notes to the inspector about any special concerns such as pets, locking up the home, thermostat settings, or repairs or replacements that may already have been made or planned.
Make sure all rooms / areas of the home, garage, and outbuildings can be unlocked so the inspector can get into them.
Move any boxes or storage to allow for a clear view of the walls, especially in basements and garages.
Replace any light bulbs that aren’t working.
Arrange items under sinks to allow for adequate inspection of the plumbing and the floor of the cabinet.
Make sure we have access to inspect the attic; water heaters; electrical panels; furnaces; AC, sump pumps, etc.
Fireplaces / Wood stoves: Make sure old ashes are cleaned out to allow for inspection.
Share any information you think might be helpful to the buyer.
by Eric Robb, Illuminating Home Inspections
Inspection day is usually the last time your buyer will visit the home until the final walk-through. For this reason, many buyers choose to use the inspection day to invite family members, take measurements for furnishings and look at the home in greater detail.
Once the buyer receives and evaluates the inspection report from their inspector, the buyer may choose to formally request some home repairs be completed prior to closing. Repair requests are made using a document called the IRSA (Inspection Repair and Survey Addendum).
Although you have already negotiated the contract, the inspection process opens up another round of negotiations with the buyer regarding what repairs you are, or are not, willing to make to your home.
In some cases, your home may be subject to repairs required by the buyer’s lender (This topic is covered fully under the section: appraisal process).
Once you and the buyer have agreed on repairs it is your responsibility to complete those repairs prior to the buyer’s final walk-through.
Did you know you actually need to sell your home twice?
Not only does the purchase price of your home need to be found agreeable to a buyer, but it must also be justifiable to an appraiser.
Home appraisals are conducted by licensed professional home appraisers, and are an unbiased estimate of the fair market value of your home. During the mortgage loan process, your buyer’s lenders will order an appraisal as an objective way to assess your home’s value and ensure the amount of money the borrower is requesting is appropriate.
Depending on the type of loan your buyer is securing (FHA, VA or RD), your property will be scrutinized by the appraiser for more than just price. Homes being purchased with these types of loans are subject to specific requirements that ensure the home is in working order for the new occupant. Typically, items like broken windows or roof leaks will have to be repaired before the buyer’s lender will agree to the loan.
The inspection by the appraiser is separate from the buyer’s home inspection and may come much later in the execution phase. So, while you may have already negotiated repairs with the buyer based on the home inspection, it is possible that the buyer’s lender will require additional repairs.
Although the home loan is not something you are directly involved with as a seller, it is still a good idea to understand the lending process. This way you can track the progress of the buyer’s loan and rest assured that the loan is being processed smoothly and you are on track for closing.
While you’re focused on executing the terms of your real estate contract, you’ll also be busy moving out of your house. Many sellers like to wait until the inspection negotiations are complete before starting this process. Remember, you’ll want to leave enough time to get the house ready for the buyer’s final walk-through, too.
It’s a great idea to create a safe location now where you can collect items you need to give the buyer (i.e. keys, garage door openers, operation manuals etc.), so they don’t get packed away. Additionally, keep a copy of the contract handy and adhere to promises regarding personal property so nothing is mistakenly packed and/or left behind that shouldn’t be.
Sometimes changes need to me made to the contract during the execution phase. If so, these changes will be made on the appropriate NWA real estate forms and signed by all parties. The two most common forms used to make changes are the General Addendum and Closing Date Addendum.
There are a lot of moving parts to the contract which require the collaboration of multiple people from many industries.
Although everyone involved is working hard to fulfill the terms of the contract on time, there may be set backs that are simply out of your control. For instance, the underwriting process could take longer than projected, or repairs could take longer than expected.