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As a homebuyer or seller, an accepted contract is exciting. But hangon … the deal’s not done.
Thankfully, if you’re working with a REALTOR®, he or she can guide you through all the potential twists and turns on the way to closing.
For starters, most purchase contracts include a termination option. The buyer pays the seller a fee for a specified period of time during which the buyer can cancel the contract. The buyer can exercise this option for any reason. In fact, he doesn’t even have to explain why.
Buyers usually hire inspectors during the termination-option period. Inspections that reveal items in need of repair may prompt a buyer to ask for a price reduction or repairs prior to closing. Or the buyer may simply choose to cancel the deal.
Transactions sometimes unravel when a buyer cannot obtain the financing specified in the contract or the property does not meet the lender’s requirements. For example, appraisals can come in lower than the purchase price, or there may be issues with obtaining insurance for the home.
Option periods, inspections, and financing are three common trouble spots for transactions, but there are many others. Problems with title insurance or the survey, disagreements about items that convey, issues related to homeowners associations, or damage to the property after acceptance of the contract but before closing are a few examples of issues that can arise.
Communicating with your REALTOR® about each stage of the transaction will minimize surprises and increase the chances that your transaction will proceed smoothly.