This is a question I get from my Philadelphia home sellers all the time. It’s a step-by-step process and there is no skipping any steps.
- The Seller and Buyer come to a mutual agreement on price and terms. All parties sign the contract – we call this an executed agreement and yes it is binding. The listing status usually is changed to pending (under agreement).
- A home inspection is performed. If there are material defects more negotiation is a possibility. A buyer might ask for repairs, money, a little bit of both or cancel the transaction.
- Buyer applies for a mortgage sending all his supporting documents to the lender.
- Appraisal is ordered and must support the agreed-upon purchase price. If it comes in low, more negotiations take place or perhaps a new appraisal is ordered.
- Once the lender has all the Buyer paperwork and the appraisal the loan is then submitted to the underwriter. The underwriter then issues a Commitment to Lend which usually has a few contingencies that have to be met. Employment verification of Buyers 72 hours before closing is almost always required.
- Two days before closing the underwriter will issue a Clear-to-Close and everyone breaths easier. You are almost there!
As you see there is a possibility of many negotiations after the original agreement of sale is signed and before the house is actually sold. At any step of the way there can be many pitfalls and yes the whole shebang can fall apart.
This might be one of the most important reasons to pick your agent carefully. A good agent foresees bumps in the road, is proactive in keeping the sale of your house going forward, keeps you informed, and does whatever it takes.
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