Receiving Offers and the Offer Process
When you receive an offer on your home, it is imperative that you review it carefully. The offer tells you the price the buyer is willing to pay and under what terms. We will review the offer with you and generally give you a summary of the offer, highlighting the important points. It is customary that the buyer include a pre-approval letter from a lender and proof of funds for the amount they say they will put down and use to close escrow.
Once you’ve read the offer, you have several choices.
• Accept the terms with no changes and sign the offer.
• Make a counteroffer to the buyer by making some changes. In some cases, a series of counteroffers will take place before the final agreement is signed.
• Reject the offer entirely.
Once you have accepted an offer you must continue with that offer unless the buyer fails to perform. You may accept a backup offer if that buyer clearly understands the house is under contract. The backup offer becomes effective only if the first offer falls through and the transaction fails.
For a sample calendar/Seller’s Checklist of the life of real estate transaction click here
Most real estate contracts come with contingencies. The most common are:
• Loan (Buyer’s ability to obtain a loan)
• Appraisal (The lender will send an appraiser to determine the current value of the property)
• Buyer’s Physical Inspection (Home inspection, roof inspection, pest inspection, chimney inspection, pool inspection, foundation inspection etc.)
• All Buyer Investigations other than physical inspection (easements on the property, insurability of the property, other concerns)
• Condominium/Planned Development (HOA or OA) Disclosures (Covenants Conditions & Restrictions, Home Owner’s Associations Documents)
• Reports/Disclosures (Natural Hazard Disclosure, Property Tax Disclosure, all of Seller’s Disclosures etc.)
• Title: Preliminary Report (ownership of a specific parcel of land, together with the liens and encumbrances)
• Sale of Buyer’s Property (purchase of your home is contingent on the buyer selling his or her current home)
All contingencies have a negotiable time limit. At the end of the time limit the buyer has 4 options:
• Release the contingency
• Ask for a correction of the issue
• Ask for more time
• Dissolve the contract
The Buyer’s deposit is at risk after they release contingencies. Prior to the release of contingencies, the Buyer has a right to all of his deposit back should they decide not to move forward with the contract.
Once the contingency period is over the sale is almost complete. The next step is the Final Walk-Through, then the sign off with the Escrow Company and finally the close of escrow.
Buyers are encouraged to make a final walk-through up to 5 days before closing. This is their opportunity to see that the property is in the same condition as when they purchased it and to verify any corrective work negotiated has been completed.
Once the lender has notified the escrow company that loan documents are ready to sign, the agents for Buyer and Seller will individually set up appointments to sign the necessary documents at the escrow company.
The night before the home is due to close escrow the escrow company will notify the agents when all funds needed to consummate the sale are in the escrow account. The following morning the deed is recorded into the Buyers name and escrow has closed.
Here are some key things to remember while waiting for your escrow to close:
27 Days Before Close of Escrow:
Contact moving companies for bids
Once All Contingencies are Removed:
Confirm dates with the Moving company
Tip: Ask moving company if they provide boxes for you to self pack – often they will drop them off for you
10 Days Before Close of Escrow:
Contact your utilities to stop service. Arrange to have them shut off the day following close of escrow since most utilities do their shut offs early in the morning. If you are staying through close of escrow you will want lights and hot water.
Trash and Recycle companies generally pick up your used trash cans and issue new ones to the new owner. Depending on your trash day you may need to arrange to have last minute garbage removed.
Set up house cleaners for close of escrow day
2 Days Before Close of Escrow
Put in Change of Address with the postal service