November 12, 2020
Categories: Tools
In the prior blog posts in this series we discussed several aspects of the loan process; how a buyer needs to maintain their credit score, and how the home will go through a building code inspection and appraisal process. This post discusses the seemingly obvious but sometimes difficult part of the process, namely, expediency. The contract process and obtaining loan approval is stressful. It is important to try not to become overwhelmed or fall prey to procrastination, ultimately that could cost you the home you are trying to buy!
Contracts typically have a clause that states “time is of the essence.” This is often elaborated upon, explaining all parties agree to work together amicably and towards the common goal of closing the home. The contract will have several deadlines written in, one will be a date by which the buyer needs to have obtained mortgage approval (this is different than the initial pre-approval letter issued by the lender), and one with an estimated closing date. These dates are not necessarily set in stone; however, they should not be disregarded as mere suggestions. The contract can be cancelled if one of the parties blatantly disregards these dates and is not doing their part to work towards the closing. For the buyer, this means getting all necessary loan paperwork to the lender. For the seller, this means signing all contracts and addendums, and making any necessary changes to the home.
Completed homes are typically under contract for about thirty days prior to closing. If a home is under construction, the contract could span over a course of months. In this case, the closing date is more of a moving target as unforeseen events, like bad weather, can alter the timeframe of the construction process. It is the builders’ job to keep the buyer in the loop, setting an accurate expectation of how long the building process will take and of any changes along the way. Even though a home under construction can take longer, it is imperative the buyer maintains their end of the agreement, remembering “time is of the essence” for any outstanding paperwork they may have or tasks they may need to complete. Though the process can be stressful, the end goal of closing on your new construction home will be worth the inconvenience of any bumps along the way!
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Related Articles
Avoiding Mortgage Pitfalls: Part 1 – Fluctuation in Credit
Avoiding Mortgage Pitfalls: Part 2 – Building to Code
Avoiding Mortgage Pitfalls: Part 3 – Are You Getting What You are Paying For
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11.20
Categories: Tools