Once under contract, sellers and buyers, each from their respective viewpoints and obligations, have approximately five major hurdles you will need to clear during the next 60 days. Most will be occurring simultaneously with their own respective timeframes. Depending on which viewpoint the respective parties come from, financing capabilities and due diligence – most commonly referred to as inspection period – will be the first two.
A great deal of research and analysis is necessary for financing and due diligence. Under there is some time constraint, as both have time periods of eight to eighteen days. By obvious terminology this process will involve several lenders, home inspectors and the professionals of their related fields. If you do not make it over both of these hurdles initially, cancel the moving van or at least reschedule, but all may not be lost.
Financing: rate changes, income verification, source of down payment are generally the items for this hurdle; not to mention minor credit issues from four years ago which were initially inadvertently overlooked. During due diligence, the inspection period, anything you can think of can disrupt the contract when crossing this hurdle. Everyone should be aware of the large ones – heating and air conditioning (HVAC) systems or roofing, septic systems or plumbing related matters. But there may be siding or minor structural issues which would have been overlooked – deferred maintenance.
OK, so we have made it over these two hurdles and the realtors are getting their hopes up. Now we bring in our other two friends – the appraiser and attorney – for hurdles three and four. The appraiser has to confirm for the lender that the value of the house is equal to or exceeds the purchase price of your home.
In today’s environment with continued declining values this “snap shot” the appraiser taking is just that and may require a second opinion.
The attorney – this hurdle can be an easy one until an issue arises from the title search. Most sellers have an easy time with this, but if there are some unsettled domestic issues of probate and divorce, that can throw a wrench into things.