One of the most significant financial investments made by an individual is the purchase of a home. The purchase of a home involves the efforts of the real estate broker, mortgage lender and attorney. A purchase can be stressful due to the unknown. The following should help alleviate some of the stress while at the same time outlining the process of purchasing a home.
Once an offer is accepted and the Contract is signed by the buyer and the seller, the parties have 3 days, excluding Saturday, Sunday and legal holidays before the contract can become legally binding. This is called the Attorney Review period. During that time, the contract will be reviewed by your attorney and any changes to closing date, contingency dates, financing options or any other aspect that may affect closing is addressed. Once the parties agree on the changes/modifications, the contract becomes legally binding and all time frames begin to run
The first time frame will be to give the additional deposit money to whoever is authorized to hold the money. The deposit money can be held by the real estate agent, the buyer’s attorney or the seller’s attorney. The money is held in an escrow/trust account and cannot be released without authorization from both the buyer and seller.
The second contingency is the home inspection contingency. You will have anywhere from 7-14 days within which to have the house inspected by a licensed home inspector. The inspector will inspect to make sure the house is structurally sound, mechanical systems are in working order, there are no environmental issues, no wood destroying insects and no other major defects. Once the inspection is completed, the report will be sent to your attorney who will review the results and then send a letter to the seller’s attorney requesting the seller to make repairs. Your attorney will work with the seller’s attorney to resolve any inspection issues.
The third contingency is the mortgage contingency. You will have anywhere between 30-45 days within which to obtain a mortgage commitment, which is a letter from your lender stating that they will loan you the money so you buy the property. You will work with your mortgage lender to secure the commitment. Once you have the mortgage commitment, it is sent to the seller’s attorney.
At that point, it usually signifies the conclusion of all the contingencies and your attorney works with your lender and the title company to enable you to close on the property. Your attorney will review the title and the survey to insure that you are purchasing a home with no liens. Your attorney will attend the closing with you and review the mortgage papers and title papers and of course make sure you get the keys.
