When you have a contract that has been agreed upon with a buyer for your home your are now at mutual acceptance. Congratulations on reaching this point! You may feel that you can breathe a sigh of relief however before you can completely relax you need to get from mutual acceptance to closing of escrow.
Contingencies and Sellers
While the burden is on the buyer to complete financing for the home purchase there are some contract contingencies that will impact you as the seller also. As mentioned above, some transactions include a home inspection, so you’ll need to make your home available to the buyer their broker and home inspector and then negotiate with the buyers about anything the inspection turns up according to the terms of your contract.
Another extremely important step prior to closing if the buyer is financing the purchase of the property is the appraisal. An appraisal is different than a home inspection and is ordered by the buyers lender to evaluate and confirm that the property value meets or exceeds the purchase priced. If the appraisal happens to come in higher than the sales price, then the buyers will be happy that they have purchased a home for less than its market value. Once the contract has been signed, you as the seller cannot renegotiate the price higher. However, if the appraisal comes in lower than the sales price, then the buyer’s lender will limit the loan amount based upon a percentage of that lower value. The buyer may have to come up with additional cash to cover the financing gap or may ask you to renegotiate the terms of the contract based upon the low appraisal. Your Seattle Area Real Estate Team Broker will advise you and guide you about the best way to handle that situation if it does present itself, but in any case you and the buyer are also bound by the contract terms including any contingencies regarding the appraisal.
Before you get to the point of closing, you and your listing Seattle Area Real Estate Team broker will go over the contract to make sure you’re fulfilling all the details you agreed to in terms of what items will be conveyed to the buyer and any repairs or improvements that you agreed to make.
Buyers and sellers typically negotiate a settlement date that is mutually agreeable. If you have sold your home and are not yet ready to move into your next residence, you can sometimes negotiate a “rent-back” with the buyer that allows you to stay in the home after the settlement by paying rent to the buyer.
Alternatively, some sellers will rarely allow the buyers to move in before settlement. In either case, it’s crucial to have a written agreement about who is responsible if something happens to the home or its contents during the transition period. Generally, you’re restricted to a maximum rent-back of 60 days because lenders would require the buyers to finance the home as an investment property if the rental period is any longer.