What to Expect Now That You are Under Contract

I will provide you with an outline of all our important dates and milestones, such as our inspection period and loan deadlines if you are financing. I will be monitoring these deadlines and we will work as a team to insure we stay within the bounds put in place by the contract. Keep in mind that the deadlines set forth in the contract are rigid and if not achieved, they could expose your binder money for the seller to claim if we do not close. The important team players are you, me, your lender, your insurance agent, and the title company.

Home Inspections

• Selection of Inspector ' The choice of the inspector(s) is completely up to your discretion. If you would like some suggestions, I am happy to provide information on three to four inspectors so you can contact them to inquire about pricing and what they include in their service.
• General Inspection ' This is an inspection of the entire home (including the systems) and is done at the buyer's expense and solely for the buyer's information. This inspection is not to be provided to your lender or anyone else; it is simply further assurance that your home's condition is acceptable. If anything significant is found during this process, there can be additional negotiations if the seller is willing or has agreed to it in advance. In most of the commonly used real estate contracts, the buyer can cancel the purchase within the inspection period. The binder deposit is typically refunded to the buyer in this case, but the cost of the buyer's inspections would not be reimbursed.
• Four-Point Inspection ' This is an abbreviated inspection covering the roof, air conditioning/heating, electrical, and plumbing systems. The purpose of this report is to document eligibility for coverage and pricing of an insurance premium. This is typically required on homes that are older than 20-30 years (depending on insurer). This can usually be done by the same inspector doing the general inspection for an upcharge.
• WDO Inspection (Wood-Destroying Organism) ' This is an inspection typically done by a pest control specialist. The specialist surveys your home for termites, other wood borers, and wood rot. Some loans (like VA & USDA) require this as part of the loan approval requirements. If there are any deficiencies or active destructive situations, they are required to be corrected and verified prior to closing.
• Other Inspections ' During the inspection period, you can have any inspections you deem important done as well. For example, if you have concerns over your home's AC unit, you can hire a contractor to perform a much more thorough inspection for that system specifically.
• Other Considerations ' The inspection period is also an excellent time for you to do further due diligence regarding other matters such as HOA covenants and restrictions, insurance availability and premiums, costs of utilities, and more.

Loan Process

Keep in mind that your lender will need your full cooperation to meet their deadlines and remain within the requirements of the contract. If your lender asks you for anything, provide it as quickly as possible to keep things moving. If not, it could result in a contract breach in the form of a late milestone.

In financing there are typically three stages of varying detail in which the lender will ask for certain documentation. Please expect to be asked multiple times and don't be surprised if the lender is still requesting items very close to our closing deadline. This is the part of the process that only you can do to keep our team moving towards a successful closing, so please be involved and available for your lender.

If you are packing things up early, please keep all your bank statements and other financial papers available and pack them last in case they are needed late in the process. It is important that you do not make any changes to your financial position such as taking out additional loans, making any large purchases, or opening new lines of credit. If you are unsure of any potential impacts to your financial status, please contact your loan officer for clarification.

Appraisal

If you are using financing, an appraisal will be required on the property. This is typically paid for in advance by the buyer. None of the parties to the transaction get to pick the appraiser and it is typically scheduled under an appraisal management company (AMC) as a random cycle through their pool of appraisers. This technique began after the real estate crash and is designed to prevent collusion, which could result in overvaluing the property and putting the lender and buyer at greater risk in their investment positions.

Title & Closing

Typically the closing agent is also the agent for the title insurance, which is an insurance policy provided to you that covers and ensures you are receiving title without any claims from others. You will be contacted by the title company at some point to collect your information for taking title. This may include your legal name or entity name if you are taking title in some other form such as a trust.

If you have any questions about the coverage provided by the title insurance, feel free to ask the title agent at that time. Also, if you will not be closing in person, please let the title agent and other team members know well ahead of time as there are additional steps and time needed for all of us to prepare for a remote/away closing.

When you receive wiring instructions for your closing, always verify the information with a phone call before sending the wire. Wire fraud is prevalent in the real estate industry, and once a wire is sent, it cannot be reversed. Therefore, make sure you are wiring your funds to the correct account.

Insurance

You are encouraged to investigate insurance options early in the transaction process. If your home is in a flood zone (other than zone X) and you are financing the purchase, the lender will require flood insurance in addition to the required hazard insurance. If your purchase is not financed, it is strongly advised that you obtain insurance to protect your real estate investment.

If your home is not in a flood zone, you can still purchase flood insurance for a low premium amount. When we are in hurricane season (June-November), it is recommended that you bind your insurances (flood and hazard) as soon as practical. Once we have a named storm coming our way, insurance may be on hold and temporarily unavailable, which could possibly delay closing.

Utilities

Generally it is standard practice for the buyer to take over the utilities beginning on the day of closing. I will send you a reminder about a week before closing with the contact information for the providers of electric and water. The seller will be cancelling utility services effective the day of close, so if you do not arrange for this ahead of time, you could be without utility service until you do so. Other things like cable TV, internet, and landline phone service are all optional and can be scheduled for day of closing or later depending on your needs.

Sale Contingency

If you have a home to sell or a close contingency, we will be required to provide a copy of that contract along with updates as each of the milestones are reached. As part of the process, I will be in touch with the REALTOR® that is handling your home sale to obtain the milestones and get updates. If there are any changes to the contract to sell your contingency property, please let me know right away so we can act if necessary. It is our contractual obligation to keep the seller on your purchase side informed and to be completely transparent.

Good Faith Escrow/Binder Deposit

This is the money you put in up front to show your good faith to the seller and as further security against a possible contract breach. These funds are part of your cash that goes into the transaction. The funds are typically held by my brokerage firm's escrow account, and I will deliver them to the title agent on the day of closing to go toward your purchase. If the contract is breached, then these funds could be exposed for the seller to claim if the transaction does not close. You can deliver the funds for the binder deposit to me in the form of a personal check made out to Watson Realty Corp., or you can wire the funds if you prefer. Keep in mind if you write a personal check, our firm's policy is to hold the funds for 10 business days to insure clearing. In the event you cancel in the inspection period, there could be a short delay in getting your funds back due to this rule.