Tuesday, January 29, 2013

O.M.G – What if I don’t close?



O.M.G – What if I don’t close?


            The process of selling the home can, in itself, be stressful.  But nothing will wake you from a deep sleep like the image of the other party backing out once you’ve gone to contract.  Listen, it’s a lesson we learned as kids – Life Isn’t Fair – it can happen, buyers can walk and sellers can decide to stay.  What’s prudent is preparing for the worst.  When properly prepped, you’ll get that beauty sleep we all deserve.

Promises are alright, but Escrow tucks you in at night


            The importance of escrow is undeniable.  Without the buyer putting something “in the game”, a seller is taking their home off the market based on nothing short of hope.   A buyer placing funds in escrow shows they are willing to put skin in the game, and want the same end result as seller – a closing at negotiated price.  Escrowed funds protect both parties and cannot be released unless both parties agree.  While escrowed funds vary, 10% of purchase is a good standard, but 5% is acceptable in some cases.  Without escrowed funds – and proof there of – your contract isn’t much more then an I.O.U – and that’ll keep you up at night.



Don’t be late on these 5 dates


            The protection of contract, and thus escrow – is based on specific dates to perform as listed in purchase contract.  Buyer must meet these dates or contract can be considered null and void, effectively placing escrowed funds at risk.  Contract dates are specific to events that must take place in a timely and orderly manner as agreed upon by both buyer and seller.  First date to know is your Effective Date, this is the date upon which both buyer and seller agree to terms of purchase contract, possibly the most important date as all other deadlines will be set according to.  Following is the inspection date, 2nd escrow placement date, mortgage commitment date and of course – your closing date.  Keeping these dates calendared will help ease the stress an upcoming closing can bring.  If ever unsure as to where your sale stands, a quick check up on other parties’ performance will give a great barometer.


Get to know your teammates

            Every Real Estate transaction has a team associated, and it is your agent’s job to manage that team to the best of their efforts.  The list of players is short, no reason not to know them all.  Our first teammates are of course the buyer and sellers agents, generally one of each – but some agents do work in pairs.  Secondly is going to be buyers loan representative, sometimes the MVP of the transaction.  Third is closing coordinator, often working directly with Title Company chosen to close transaction.  It is advisable to get to know all of these key players prior to issues arising.  While your Realtor® should be in constant contact with this team, it’s not a surprise that that doesn’t always play out.  Once inspections have passed, take inventory of who is involved in your transaction and what parts they play.  Make a list of contact information to have at your disposal, and be sure to call and introduce yourself.  The purchase contract authorizes seller and sellers broker to be fully informed of mortgage status throughout the process.  Shall an issue arise, you’ll know whom to contact and they’ll know you.   Keeping this line of communication open and clear can at the very best, keep a closing together – and at the very least, tell you when it’s time to find a new buyer.



            Keeping these ducks in a row should keep you from waking up in a cold sweat.  Be sure your agent, or you yourself, fully keeps track of status of contract at all times.   While we all hope and pray that all parties do their jobs to the best of their abilities – it simply doesn’t always happen.  The best person to protect you is you.  Ask questions, stay abreast, be prudent – putting these small steps into play will be sure to get you to the church closing table on time.

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