For those of you who haven’t witnessed this crazy real estate market, things are booming. The market is changing almost daily, and the value of a home a week ago probably isn’t the same as it is today.
With these crazy markets, it’s important to follow through and meet all of the obligations of any agreement that you have, primarily as a Buyer. The purchase agreements we often use are provided by the Idaho Realtors association. These contracts have some boilerplate, key deadlines and obligations for Buyers to meet in most circumstances. In addition, there may be a number of built-in contingencies or Buyer obligations beyond the traditional ones. I will outline a few of the most common examples below.
– Earnest Money Delivery: Depending on how your contract is written, it may be stated that the earnest money is already delivered, or shall be delivered within a certain time frame. As a Buyer, it is your responsibility to make absolutely certain that you deliver these funds in accordance with what the agreement states. For example, if the agreement states that the earnest money shall be delivered in the form of a personal check within three business days of acceptance to title company x, make sure it’s there. If the earnest money is not received in a timely manner, the Seller can elect to terminate the agreement.
– Proof of Funds or Loan Approval: Another common example is the requirement to deliver proof of funds and/or a loan approval letter within a certain amount of time. The agreements are typically written in a way that provides the Seller a few days to cancel the agreement if you don’t deliver these items by the deadline.
– Closing/Loan Funding: This is a big one. It is important to stay in close communication with your lender and remind them the importance of closing on time. Like everyone else, loan officers are busy and it’s easy to set a file aside and pick it up a couple of days too late. Make sure everyone involved in the transaction from real estate professionals to title companies knows exactly who the loan contact is, and try to set up reminders for appraisals and periodic check-ins. Other obligations and contingencies exist, so it’s important to have your real estate representative prepare a timeline with key dates and deadlines. Make sure you pay close attention to the difference between a business day and the calendar day, and understand that business days end at 5:00 Mountain Time. Sellers have obligations too, but in a Seller’s market it usually doesn’t benefit a buyer as much to try to act on these deadlines.