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When making an offer on a property, it pays to have your calendar or PDA in hand. Once the process begins, you'll need to schedule the dates for the inspection, the Purchase and Sale (P&S agreement), the mortgage commitment (to secure financing), and the closing. These are all important dates in the real estate transaction. Meeting them on time ensures the transaction proceeds smoothly and helps protect you and the seller.
Home Inspection
The home inspection is a thorough inspection of the structural and
mechanical aspects of the property. An inspection should provide insight
into additional costs that may come with the property. You'll want to allow
enough time to have the inspection completed by the home inspector plus
a few days to absorb the information once you receive the report.
Purchase and Sale Agreement
The P&S is the contract that outlines the terms and conditions under which
the property will be sold and is signed by both the seller and the buyer.
At the signing, a pre-specified lump sum is due, so make sure you have
sufficient funds available. You don't want someone else to swoop in
with a deposit because you missed your deadline while waiting for your
brokerage company to cut you a check.
Mortgage Commitment
The bank's agreement to make a loan to a specific borrower on a specific
property, the Mortgage Commitment outlines the loan amount, interest rate,
and terms of the loan. If the buyer decides not to accept the loan, then
all parties are notified and the deposit is returned to the buyer. However,
if a Mortgage Commitment is not obtained by the date specified in the
agreement, and a problem arises after this date has passed, then the
deposit could be in jeopardy.
Closing The closing occurs when the documents have been signed, money is exchanged, and the ownership of the property changes hands and is recorded in the Registry of Deeds.
When putting together an offer, don't take these dates lightly - miss one and you could delay or jeopardize your transaction. Ensure you know what is happening and when by promptly recording the dates in your calendar!
Got questions about real estate financing? Contact Debbie@westchester-mortgage.com or 617-965-1236. She'll consider them for inclusion in a future column. Debbie Siegel is president of Westchester Mortgage in Newton, Mass. She is licensed in several Northeastern states.
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