What to do Before Closing on a Home
You are now waiting for closing day. Congratulations on selling your home for sale by owner. You have a signed contract, right? Are we there yet? Not quite. You and the buyer have agreed on price and terms and signed the paperwork.
Now, you want to make sure that all goes smoothly until the Moving Day. Whether selling a house for sale by owner, or through a real estate agent the final selling steps are basically the same.
The only difference is, you should keep a slightly closer eye on the fulfillment of the contract while waiting for the closing date, when selling home by owner.
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The first thing you should do after the Purchase and Sales Agreement is signed, when selling a home by owner, is make sure you have at least 2 copies for yourself and 2 for the purchaser. If you have an extra copy, give one more to the purchaser for their Mortgage Broker or lender.
Once the purchaser has left, start marking the dates for each deadline on a notebook, tablet, smart phone, daytimer, (Do they still make those?) laptop, desktop, calendar or whatever your choice of weapon in this day and age of multitasking.
As an example, you would mark the date that the lawyer approval is to be satisfied or any mortgage financing that is to be in place.
Next you might put in a building inspection, a water test, survey, closing date etc.
The next step I would do while waiting for my closing date, should be a trip to the respective lawyers (seller and buyer) to have them look over the contract for approval as to form and content.
I hope you made sure that the subject to lawyer approval clause is in the contract. Go to Subject to Lawyer Approval Clause page if you need to refresh your memory or you haven't been to that page yet.
Follow the Bouncing Ball
After you have all the important dates marked and you have approval of your respective lawyers, you just keep track of each item that is to be finished.
On that date or the day before, you check with the purchaser to see if the clause has been satisfied.
Of course, while waiting for closing day on a house, if a clause that details something that you must put in place, you make sure it is done.
Meanwhile in the background, the lawyers, mortgage people and other folks are doing their jobs to fulfill the contract.
There will be Closing Costs to pay both by you and the buyer when selling a home by owner. Most of these will be adjusted on the closing date.
The buyer or yourself may also have some upfront costs while waiting for closing day closing.
Some examples of these would be a water test, a building or pest inspection and perhaps some work that you have to finish while waiting for closing day.
A Reminder about Deposits or Earnest Money
When we talked about the Earnest Money Deposit I encouraged you to get a substantial deposit.
Buyer's remorse, whether a first time buyer or a seasoned player, is one of the reasons for this.
If a buyer has a $5,000.00 deposit on a house they are in a contract to buy, they will be much less likely to try to back out of the deal than if they have a $500.00 deposit.
Under the contract, that earnest money deposit goes to the seller if the buyer defaults without just cause. The buyer could take the seller to court to try for a return of deposit, but would they?
Not likely. In the end, they would probably lose more than the $5,000.00.
Having said that, if a buyer really wants to get out of a contract to purchase, they can probably find a way by using an Escape Clause. It depends on how badly they want out, how tight the contract is and what type of conditions are in the contract.
The vast majority of agreement of purchase and sale on residential houses, do not have this problem unless there is a actual problem fulfilling the conditions.
An example would be that the buyers could not obtain financing, or during a building inspection there was a major fault discovered with the house whereas; the seller was unable or unwilling to repair and the buyer would not accept the house in that condition.
After the Conditions are Met
all the "subject to" conditions are met such as financing, inspections
etc., if you really want to, it's now OK to
put that big SOLD rider on your for sale sign. It's OK not waiting for closing day to do this enjoyable task.
Don't put the SOLD sign up until all the conditions have been met though. It is not a very good feeling sneaking out under cover of darkness, to remove your sold sign. :-(
Putting a sold sign on when you are a for sale by owner isn't necessary of course, but it feels great, right? All those real estate agents that told you that you needed them.
They told you that they could get you more money. They said you would only get tire kickers and people that didn't qualify to buy a house.
Yeah, go ahead
and put those SOLD signs up! It's OK to walk around with your head held
just a bit higher for a bit. Yes sir, we sold our own house and didn't
have to pay a real estate agent a big commission! Now, we are just waiting for closing day!
You will of course, have other things to take care of, such as arranging your Move to Your New Address You should start thinking about mailing address change, utilities, insurance etc.
Note: It's important while you are waiting for closing day, that you keep your house insurance in force until after the property changes hands!
Lets Look at Some of Those Conditions
On the next pages we will examine some of the conditions that may be on your Agreement of Purchase Sale contract and how you may want to handle them when selling home by owner.
What happens if there is a "bump" on your way to a smooth closing.
Can you save the deal selling a home by owner? While you sure can try. I'll be sharing some possible solutions as we go along.
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