While the responsibility lies with the buyer to secure financing and obtain homeowners insurance for the home purchase, certain contract contingencies can also affect you, particularly if you are residing in the property.
Before the house closing, it is common for a home inspection to take place. You will need to accommodate the inspector and then negotiate with the buyers based on any issues discovered during the inspection, as per the contractual terms.
In addition to the home inspection, certain contracts and lenders may require a termite inspection and a radon gas inspection. In such cases, you, your listing agent, or the buyer’s agent will need to make the property available for inspection.
An essential step before the house closing is the appraisal. If the appraisal value is higher than the sales price, the buyers can feel satisfied that they have purchased the home below its market value. Once the contract is signed, the seller cannot demand a higher price.
However, if the appraisal value is lower than the sales price, the buyer’s lender will limit the loan amount to the lower value. The buyer might need to provide additional funds to bridge the financing gap or request a renegotiation of the contract. Your agent can offer guidance on how to handle this situation, but both you and the buyer are bound by the terms of the contract.
Prior to the settlement, it is important to review the contract with your agent and ensure that you are prepared to fulfill any obligations you have made, such as conveying specific items to the buyer or completing repairs or promised improvements.
Negotiating a settlement date
Buyers and sellers typically come to an agreement on a settlement date that works for both parties. If you have sold your home but are not yet prepared to move into your new residence, it is sometimes possible to negotiate a “rent-back” arrangement with the buyer. This allows you to remain in the home after the settlement by paying rent to the buyer.
Generally, lenders impose a maximum rent-back period of 60 days. If you require a longer rent-back period, it is advisable to discuss it with your buyer and your agent.
Alternatively, some sellers may permit the buyers to move into the property before the settlement. In either scenario, it is crucial to have a written agreement that clearly outlines the responsibilities of each party in case any damage occurs to the house or its contents during the transition period.
The process of determining who handles settlement (also referred to as closing or escrow) services can vary depending on the market. In many areas, it is the buyer’s responsibility to select the settlement company, while in other regions, the seller takes charge of this decision. During the house closing, the buyer provides the necessary funds to purchase your home, and the settlement agent examines the sales agreement to determine the payments you are entitled to receive. The transfer of property title to the buyers is executed, and arrangements are made to officially record this transfer with the appropriate local records office.
During a typical closing, adjustments are made to ensure accurate final amounts owed by the buyer and yourself as the seller. For instance, if you have been paying property taxes through an escrow account, you may receive additional credit for prepaid taxes, or if the property taxes have not been properly paid, you may receive less money during the settlement.
Once all the settlement papers have been signed, and the keys to the house are exchanged, you are free to move on to your next home.
Experts in Residential Real Estate in Orlando
If you are BUYING or SELLING real estate it’s quiet often the single most important financial decision you make. For the last 30 years we have helped clients buying and selling property in Orlando and the surrounding areas. Put simply, this means the knowledge and expertise accumulated over this time ensures our clients get the best representation possible.
Our experienced agents will help and guide you through the entire process providing valuable support every step of the way.