From Offer to Closing: Things you need to know about the process of buying or selling a home.

The following is a detailed description of the sale process. The narrative below begins after the buyer’s offer has been accepted by the seller and the attorneys on both sides of the deal are in possession of a signed contract of sale. IMPORTANT: Whether you are a first-time home buyer or an old pro, a real estate attorney should be consulted.

Attorney Review
The attorney review period begins when the attorneys for both the buyer and the seller have, in their possession, fully executed copies of the contract of sale. During attorney review, which lasts 3 days but which can be extended by the mutual agreement of the attorneys, the contract of sale is modified in a manner such that it is acceptable to both sides, at which point attorney review will be concluded and the house will be under contract. Important: during the attorney review period, either side can walk away with no consequence (with the possible exception of legal costs). It is presumed, however, that both sides have entered into the contract on the expectation that, at the end of the process, clear title will be conveyed for the agreed-upon consideration.

Under Contract
Once the house is under contract, the buyer has a specified time frame to arrange for and complete inspections, typically 14 calendar days from the conclusion of attorney review, wherein some or all of the following will be conducted: a complete home inspection, a termite/pest inspection, chimney inspections, a tank sweep to uncover underground storage tanks, a roof inspection, a radon inspection, and, where appropriate, a septic system inspection. All of the inspections will be paid for by the buyer unless otherwise negotiated. Specific findings of consequence will likely result in negotiations relative to remediation or repair. The counsel of an experienced real estate attorney is an indispensable asset at this stage of the process. Once a clear path is established for moving forward relative to the inspection findings, the inspection contingency is considered satisfied. This is also the point when a second deposit is made by the buyer.

The Mortgage Contingency
At this point, the buyer, in order to satisfy the terms of the contract, must apply for a mortgage with the expectation that the mortgage commitment will be in hand by a specified date, which is often, but not always, about 6 weeks from either the conclusion of attorney review or 6 weeks from the date on which the inspection contingency has been satisfied. If the mortgage commitment is not secured by that specified date, either the buyer or the seller can consider the contract void. Importantly, it is not possible for the seller to provide a mortgage commitment prior to the completion of all inspections, as well as the bank’s due diligence with regard to property valuation (appraisal) and the financial fitness of the buyer. Once the mortgage commitment is in place, the mortgage commitment contingency will have been satisfied.

Property Sale Contingency
There is one additional contingency to consider; that is, the property sale contingency. When a property sale contingency is included in the contract of sale, it means that for the transaction to close, the buyer must sell an existing property. Whether a seller should accept a contract with a property sale contingency is based upon a number of factors the most important of which is an assessment of the probability that the buyer’s property will sell in time for the terms of the contract of sale for the seller’s house to be met. All things being equal, a contract of sale without is property sale contingency is better than a contract of sale with one.

Clear Title
Once the three contingencies have been met, the deal is awaiting closure. During that time the buyer’s attorney will order a search of title in order to assure that all liens against the property have been satisfied. It is likely, as well, that the buyer’s attorney will order to a property survey in order to clearly define the piece of property being purchased.

This usually takes place at the buyer’s attorney’s office, although it doesn’t have to. For convenience sake it might take place at the seller’s attorney, at the title company or by mail if the parties to the transaction are unavailable to close in person.

During the course of the sale process, money will pass from the buyer to the seller. However, since there is no guarantee that any real estate transaction will close, the money is placed in an escrow account where it will be held until closing, at which point it will be disbursed according to a closing document known as a HUD-1. A couple of days before closing the HUD-1 will be given to both parties to the transaction. In it, every penny is accounted for.

Local Inspections
Your town will likely require inspections in order to close title and they must be ordered by the homeowner, or by an agent working on the homeowner’s behalf. Order the inspections once the house is under contract since evidence that they were completed satisfactorily will be required to close.

Dinner Reservations
Once the deal is done it is totally appropriate to celebrate at your favorite restaurant. Bringing your Realtor with you is not required.

Want more information? Call or text me at 973-865-1863 or send email to

Categories: All Posts, Residential

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