Processing The Case, etc., etc.
The listing or selling broker (depending on local custom) oversees a contract through to closing and helps to place the financing, process the case, arrange various inspections and review financing and “points”.
At this stage, all contingencies will be satisfied and removed. The buyer will select a settlement and/or a title company, and the listing or selling broker will notify those firms and provide the vital information.
A number of professionals come into the home selling process during this period, including a home inspector (if requested by the buyer), well and septic inspectors, termite inspector, appraiser and attorneys. A mortgage approval can be made at application in many cases subject to verification of the information provided. However, on the chance that the financing falls through, the seller should keep the property in showable condition.
This inspection is required by most lenders and is specified in the contract, although it’s not usually required for hi-rise condominiums. The termite inspection is ordered by the selling or listing broker according to local custom. If existing coverage is in effect that might avoid an unnecessary inspection, the home seller should mention this to the listing broker. The seller is responsible for payment of the inspection, removal of any infestation if required, and the repair of damage if needed.
Your listing broker will keep you informed about the buyer’s loan approval progress. Most contracts require the buyer to make a loan application immediately after contract ratification.
The lender’s loan officer takes the buyer’s application. A property appraisal is ordered to confirm that the property is adequate security for the mortgage (the home seller should expect the appraiser to call for the inspection appointment). The lender verifies the buyer’s employment, income, deposits, credit rating and debts.
Upon receipt of any information requested and the appraisal, the lender issues final approval of the mortgage application. VA, FHA, and occasionally a conventional lender may specify requirements which must be met before the loan will be made, such as repairs. When the loan is approved, a commitment is issued to the buyer. Many contracts require loan commitment from the lender within a specified period of time.
After Loan Approval
After the buyer receives written loan approval, the selling and listing brokers will coordinate a settlement date. Your listing broker will notify you to confirm the date, place, and time and will give you a checklist of everything you need to bring to settlement. Your listing broker will also let you know when you should notify utility companies to transfer accounts.
A number of items a seller might consider, now that settlement is set, include:
- Begin to use food in your freezer.
- Eliminate items you won’t be moving. (You may want to have a garage sale.)
- Check with your insurance agency if you want to purchase full coverage on moveables. Make sure your family car and household goods are adequately protected while enroute and initially after arrival. (If the seller plans to vacate the house more than 30 days before settlement, be sure hazard insurance covers risk during that period and until the deed is recorded.)
- Obtain transcripts of children’s school records.
- Have birth records made of all family members.
- Secure medical, dental, and optometry records for the family.
- The selling broker will remind the buyer to arrange for insurance coverage in at least the amount of the mortgage as of closing, and to bring a certified or cashier’s check made out to the settlement attorney or title company.
Unless otherwise provided in the contract, the buyer gets possession at settlement. The seller should make plans to clean, remove trash, and vacate the day prior to settlement, or in any case, not later than settlement day. All appliances should be in good working order in time for the buyer’s final walk-through inspection.