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TLDR: This step is the last before closing. Aside from moving and conducting repairs requested by the buyer, this step is generally lighter for the seller.
TLDR: This step is the last before closing. Aside from moving and conducting repairs requested by the buyer, this step is generally lighter for the seller.
Huzzah! Your house is officially under contract. Let the obstacle course to get to closing begin!
Huzzah! Your house is officially under contract. Let the obstacle course to get to closing begin!
Now that you've accepted an offer and agreed on terms with the buyer, there’s a list of tasks that need to be checked off before you get to the closing table, including:
The buyer getting approved for financing
Getting the house appraised at or more than the agreed upon purchase price
Conducting the inspection and agreeing with the buyer on repairs and/or credits
Transferring a clear title
Canceling or transferring utilities
Scheduling closing
Most of these steps will be on the buyer to complete, so unless you’re on the hook for completing repairs, you’ll have to do a bit of sitting around waiting. As the buyer moves through these steps, they may reach out to you to adjust the timeline or with a list of items to fix after the home inspection. While the timeline to get to closing will have been agreed upon in the contract you signed, delays are common and you may be able to build some goodwill by remaining flexible.
What if the buyer wants out of the deal? Do I get to keep their earnest money?
What if the buyer wants out of the deal? Do I get to keep their earnest money?
Not a scenario anyone wants to be in: the buyer wants out of the contract. While this can be a huge disappointment after the time and negotiation you spent getting to this point, the bright side is that if the buyer backs out of the contract for reasons not specified in a contingency, you will get to keep their earnest money deposit.
However, the entire purpose of contingencies is to allow buyers to be refunded their earnest money deposit if anticipated pitfalls cause the deal to fall through. It’s the risk of accepting an offer that includes contingencies: the buyer has built-in chances to opt out if certain criteria are met before closing. Unless you’re in a hyper competitive market and the buyer forewent contingencies, they’ll usually have their EMD returned to them. If their reasoning for terminating the contract falls in line with the contingency, there’s nothing you can do except put your house back on the market.
What happens if I want out of the contract?
What happens if I want out of the contract?
While buyers often include contingencies that enable a smooth exit from the agreement, sellers don’t have the option to terminate the contract after ratification. If you get cold feet and no longer want to sell, you’ll more than likely end up in breach of contract. Breach of contract is legalese for saying you didn’t abide by the terms of the contractual agreement, and there are several consequences to consider:
The buyer may be able to sue you and force the sale, even against your wishes
A buyer may be able to sue you for damages, meaning you may be required to cover the expenses the buyer faced due to you breaking the contract, including lost deposits, legal fees, storage costs, and temporary housing
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