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A little help from a Realtor...
Written by Julie McCormick
REALTOR, MK Partners Inc.
7.19.22
Selling or buying a house can be a stressful time in your life. It is important you pick a Realtor that will explain and navigate you through the process. There are many factors that play into this business, and it can be very complicated. If you use someone that is not knowledgeable or try to do it on your own, you will often leave money on the table and could wind up in court. That is why it is vital to get a licensed Realtor with all of your housing endeavors.
I'm a Realtor in Oklahoma, so I am referencing the time periods and laws in Oklahoma. So I am going to explain form a buyer's point of view, but I will also touch on the side of the seller as well. Your Realtor just wrote your contract to purchase your new home, and they explained that you need to put down earnest money. This money has to be given to the title company within 3 business days. You can get your earnest money back at this time. For example if you decide during your inspection period that there is something concerning that the inspector found, you can back out.
At the end of your Inspection Period you will submit a TRR: Termites, Replacements and Repairs document to the seller within a certain amount of time. Let's say your Home Inspector found a roof repair, a couple of electrical outlets that don't work, etc. The seller has a time period where they have to get back to you. They can accept to do all the repairs you requested. Or they can counter back on your request, and say they are not doing specific repairs, or that they are doing No repairs. At this point you can back out and eventually get your earnest money back (there is a process). Or you can move forward if you still want the house.
Some sellers are selling their house in 'as is' condition. That means they do not want to do repairs, but you have the right to do inspections on the house, so you know what condition it is in. I always advise my buyers to do a home inspection and a termite inspection.
After the TRR period we wait for the appraisal (unless you are a cash offer... cash offers are not required to get an appraisal). An appraiser goes to the house to measure square footage ,and determine the value of the house. We wait a week or two to see what the appraisal value comes in at. If it comes in lower or higher than the offer price, the buyer and seller are negotiating again.
In a loan situation, the Lender is not going to loan money that goes over the house value. There are many scenarios, and here are some of them. So the seller can come down to the appraised value. Or if the buyer has the money to pay the difference, that is an option too. They can also both walk away, or come to an agreement. Earnest money at this point, can be returned to the buyer if buyer and seller did not come to an agreement.
This is where 'appraisal gaps' come in. To make a buyer's offer stronger, you can have your Realtor add a 'appraisal gap' to your offer, to show that you have extra cash if the appraisal comes in lower than the offer price. The seller knows you will be able to pay all, or part of the difference.
Next step is getting to the Closing Table. A buyer that is getting a loan has to be careful. You should be communicating with your lender often! You should be getting All documents that your Lender is asking you for. They are on a very tight timeline, and if you delay you may not close on time, or worse, not at all. If closing gets delayed it can be very hectic because you are pushing the seller back on their plans as well.
Your Lender will likely tell you No Spending on big items like appliances, furniture and cars, or no spending at all except for everyday necessities. If in doubt call your Lender! You may lose your loan and your earnest money, if you are over spending during this time. Remember the seller has had their house off the market, holding it for You and if you can't qualify, they can take your earnest money. They will have to possibly make another mortgage payment they weren't expecting, and/or the delay may cause them to not be able to buy their new home.
The day before closing the Buyer and Realtor will do a Walk-Through. It is the expectation that the Seller will have all items out of the house by then. The Seller should have the house clean, and leave all garage openers. any relevant remotes, appliance information, door and alarm codes, extra keys, etc. in the kitchen for Buyers to find. It is kind to leave touch up paint or extra tile for the sellers. Please don't leave items unless you have confirmed that the Buyer wants those items.
Once you make it to the closing table. You will need to bring your driver's license. So be sure to make sure it has not expired. You will also have to bring funds for closing costs. You cannot write a personal check you have to do a wire transfer, cashier's check or a money order. That is something that your Realtor will advise you on and depending on which Title Company you use. The Sellers will bring keys to closing.
Once you have signed your papers. The house is not Yours until the funding has gone through at the Title Company. So listen to your Realtor, and don't start moving in until that funding has gone through.
Julie McCormick, Oklahoma REALTOR, MK Partners Inc, 179404,