Post Ratification – Next Steps 2017-05-01T18:50:59+00:00

POST-RATIFICATION: NEXT STEPS

The most important thing during these next steps is open communication with your agent. This part of the process is complicated, your agent has conducted 100s of transactions and between our team members, and we’ve pretty much seen it all. There are over 200 variables at play with a real estate transaction, you have one of the best teams on your side to make it as smooth and hassle free as possible.

 

Just after ratification, there will be a flurry of activity that will be very fast-paced. You’ll be getting requests from your agent, your loan officer and the settlement agent. This will last about 7-10 days. Then there will be a lull in activity while all parties work their behind-the-scenes duties.

After this period, you may get questions or requests for information. This is when your agent and others are working hard to manage all the paperwork details.

Don’t make any major purchases during this period, don’t apply for new credit cards and remain communicative and available.

  1. Your agent will forward your ratified contract to your Lender and your Title Company/Settlement Agent
  2. Your Earnest Money Deposit check will be deposited, or you can set up a wire transfer to the Settlement Agent.
    1. This money will remain in escrow until closing
    2. The amount will be credited back to you at closing
  3. You need to contact your lender right away. Your lender will begin processing your loan and will be in close touch with you requesting lots of paperwork, if you haven’t already provided paperwork, here’s a general list of what they’ll need
    1. Income documentation
    2. Asset documentation
  • Housing payment history (you’ll need to provide landlord contact info if you’re renting, if for some reason your landlord isn’t reachable, you may need to provide 12 months proof of payments)
  1. Other items – each file is different, so be prepared for almost anything here. It can be annoying, but remember that the lender is committing to lending you a large sum of money and they need to cover all their bases before final approval
  2. BE RESPONSIVE to you loan officer, timing is important
  1. Your agent will schedule a Home Inspection – if you have a preference of home inspectors, let us know. We’re happy to recommend a reputable Inspector.
    1. It’s not required, but we recommend you be present for the Home Inspection, it’s a unique opportunity to gain an education about the home you’re purchasing.
    2. The Home Inspection Report will usually arrive 1 – 3 days after the inspection. Your agent will review the report with you.
  • Depending on the contract terms, you have a short window to negotiate any items of concern. The report will indicate if there are safety issues, maintenance recommendations and items that may need further review by an expert.
  1. IF A CONDO or HOME OWNERS ASSOCIATION
    1. The listing agent will order a “Resale Document Package” from the Condo Association or HOA.
    2. The Association will conduct an inspection of the property – they will confirm the condition of the property and also take note of any violations of Association regulations, ie shutters the wrong color, usually very minor items
      1. If there are any violations the sellers are required to remedy them before closing
  • These documents will be sent to you, usually via email. Occasionally we’ll get paper documentation.
  1. You have three days to review these documents and confirm that the rules/regulations associated with condo and HOA living work for you
  2. Your agent can help you interpret these documents
  1. Settlement Agent will send you an information request form. They’ll ask for your Social Security Number for tax reporting purposes.
    1. Your agent will send the information relevant to the Buyer’s Agent or Listing Agent questions
    2. Do not send the form with SSN back to your agent – we do not have the online security in place to be able to guarantee privacy for these documents, the Settlement Agencies have higher security protocols in place.
  2. There are different ways to take title, you’ll need to let the settlement agent know which works for you
    1. There are four types of ownership
      1. Sole Ownership—Only one person owns the property
      2. Tenants in Common—Two or more persons have an undivided ownership in the property. The percentage of ownership need not be equal; each party has a right to sell his interest, and upon the death of any of the owners that owner’s interest in the property goes to the deceased’s heirs.
      3. Joint Tenants—Ownership taken by two or more persons at the same time in equal percentages with an undivided right to possession. If one owner dies, his or her interest automatically goes to the remaining owner(s).
      4. Tenants by the Entireties—Owners are husband and wife and together they hold title to the property with a right of survivorship. Upon the death of either, the survivor takes sole ownership to the exclusion of the deceased spouse’s heirs
    2. Title Insurance – there are many opinions about title insurance and what type of coverage to get. Here are some resources to check to see what type you want.
      1. You have no choice regarding LENDER’S title insurance, they require you purchase them coverage
      2. You do have a choice about your BUYER’S title insurance, follow these links for more information
        1. Frankly Realty Blog
        2. Why Title Insurance – Published by Commonwealth Insurance Co
        3. Title Insurance Costs – Published by Commonwealth Insurance Co
      3. Your lender will order an appraisal of the property
        1. It takes about 7 – 10 days to receive the appraisal
        2. Buyer ‘owns’ the appraisal, and you’ll need it later
  • We let the seller know if the appraisal came in at contract value – they do not receive a copy of it or the exact appraisal amount unless it’s below contract price and we need to renegotiate the sale price.
  1. You’ll probably need to send your insurance company a copy of your appraisal, they’ll use parts of it to determine replacement costs and insure you have adequate coverage
  1. The Title Company will be performing several tasks behind the scenes
    1. They’ll send someone to the courthouse to research the property records to see if there are any issues with the title being ‘clear’ and that there are no claims, judgements, or liens on the property
    2. Research the tax records to verify all payments are current
  • Send information to title insurance provider and receive an insurance “binder” letting the lender know that the title is clear and OK to lend a mortgage
  1. Order a survey if necessary
  2. Order elevation certification if the property is in or near a flood zone
  3. Order pest inspections if required
  1. Your lender will be busy working on processing your loan package. This can take 14 days, during which we all sit and wait. It’s likely the lender underwriters will request some additional paperwork, so don’t be surprised by additional requests for information from your loan officer.
  2. After about 28 days, your loan will be “clear to close”, at this point, all the pieces are put together from the various entities
    1. The settlement agent will prepare a HUD 1 or Settlement Statement
      1. You’ll have received estimates along the way, this is when we all see the final numbers
      2. Your agent will review this statement with you. We’ll look at each line item and make sure it’s correct and what you expected
      3. There is a very short window to make corrections to this document, so it’s important to review this asap with your agent

 

It’s very common to experience some level of buyer’s remorse during all this activity. The key to working through this is to be communicative with your agent about your concerns and let us know if at any point you’re not comfortable with the process. We’ve seen it all, and we have your back – we are not only committed to you on a personal level, but we’re legally obligated as your fiduciary representative to work in your best interest.

 

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