You’re excited – you found the Cape Coral home of your dreams or you found a solid buyer! The hard part is over. Or so you thought. Finding a home or selling yours is really just the beginning of the closing process.
There aren’t too many differences between being a buyer or seller during the pending process (meaning the sale is pending close) unless you’re a short sale seller. For purposes of this article we are using a traditional resale as example. Once you have a contract things will happen in a certain order, or should happen in this order.
Inspection – Within a few days of a fully executed contract the inspection should be ordered and completed. The allowable length of time for inspection period will be dictated on the contract however getting it over as soon as possible is always a good idea especially if you think you may need to negotiate repairs.
Appraisal – Once inspection is completed and any repairs have been agreed upon between buyer and seller the appraisal should be ordered by the lender as soon as possible. If appraised value is less than the agreed upon price there are four options: cancel the contract, buyer & seller split the difference, seller reduces the price or buyer brings the difference to close.
Wind Mitigation – After appraisal it is highly recommended that a wind mitigation be ordered (for homes built before 2002) in order to get wind credits on your homeowner’s insurance policy. Most inspectors are now licensed to provide wind mitigation inspections and they can gather the information for the wind mit report during inspection.
Homeowner’s Insurance – Now that inspection and appraisal are finished and acceptable it’s time to gather a few insurance quotes. Sending over the property information, intended use (primary residence, second home, rental) and a copy of the wind mit if applicable to each insurance agent is important to get the best quote and coverage possible. A copy of the policy will need to be provided to the lender.
Mortgage Payoff – If you owe a mortgage balance on the property a payoff should be ordered from the title company to ensure there are enough proceeds at closing.
Title Search – This will typically be completed at the same time as the payoff request. Title searches should be ordered as early in the contract process as feasible – as a seller you want to make sure there are no surprise liens (I’ve seen this happen more than once) that affect your bottomline.
Title Commitment – A title commitment shows that there are no liens that will affect the seller’s ability to convey clear title and any exceptions, deed restrictions, easements etc. If a lender is involved it will also include a mortgagee clause with lender and mortgage amount info. Viewing this prior to closing is important to make sure that names are spelled correctly as well as property address and legal description.
Clear to Close – Yay!! You made it. Once the clear to close has been issued it’s time to schedule the final walkthrough and closing day/time.
This is a general overview of what happens from contract to close on your home. Every day is a new adventure in Cape Coral real estate though. If you have specific questions feel free to ask us. We’re always happy to help!