- Loan Application: The buyer must make formal loan application within 5 days of mutual acceptance. However, under new lending practices (TRID), lenders are required to provide buyers with a Loan Estimate (LE) within three days of mutual acceptance on a contract. Therefore, buyers should make formal loan application quickly after an offer is accepted to keep the lender in compliance.
- Inspection: If an offer is subject to an inspection there are 10 calendar days in which to get this done, including submitting a response of the inspection findings to the sellers. I recommend obtaining an inspection in 5 days or less to keep things moving along. As a team, agent and buyer determine what if anything the seller should remedy after the inspection. The seller may agree to all requests, some of the requests, none of the requests, or counter with new options. It is important to note that no home is perfect. Keep focus on the large items such as systems, structures, and roofing. If the inspection turns up an issue the buyer cannot overcome, or the buyer and seller fail to agree, the buyer has the right to terminate the contract and receive a refund of the earnest money.
- Appraisal: If you are getting a loan, the lender will require an appraisal of the property to be sure the home is worth the price you are paying. In some instances, the appraiser will call for work orders which will be mandatory for the seller to complete to make the property lendable. The lender often does not order the appraisal until after the inspection is complete and signed off on. The buyer should expect to pay for the appraisal independently of other loan costs and at the time of service.
- Underwriting: The underwriter is the gatekeeper of the loan. It is his/her job to verify that the buyer represented themselves and their finances truthfully. Underwriters evaluate credit from 3 major credit bureaus, analyze the home appraisal, and the buyer’s perceived risk as a borrower. At this point the loan may move to final approval or more documentation and explanation may be required. Once final loan approval is obtained the escrow company and lender work together on final documents for signatures.
Once the above is completed, we are ready to close!
What is Closing? In Washington State, closing is considered the day that the
deed is recorded into the buyer’s name(s). The bank funds the loan and the seller receives their proceeds from the sale.
The Role of the Escrow Company The escrow company is the neutral 3rd party handling the transfer of the property. This company will be named in the purchase and sale contract. The escrow company’s closing agent is responsible for balancing funds with the lender, receiving and taking care of funding instructions, obtaining buyer and seller signatures, and making sure the deed is recorded with the county to show new ownership
The Signing Appointment The closing agent will coordinate the signing appointments with both the buyer and seller. They will sign at different appointments with the escrow company. Typically, the signing of all documents occurs two to three days prior to the closing date as signing a few days early allows time to make corrections or adjustments if anything is missing.
Possession Possession can vary contract to contract. Some sellers need a few days after closing to do final move out, cleaning. The possession date will be indicated by the contract. If not agreed upon otherwise then possession occurs on the day of closing once the deed is recorded (typically by 9pm). The brokers work together to hand over keys and other important information.