Under Contract, What Next?
The sequence of events from contract to close in St Louis Mo Real Estate transactions is usually a 4 to 6 week time period. Many buyers and sellers find this time period somewhat anxiety ridden. For the buyer there is a lot to do:
1. As your agent I email a copy of the contract to your lender immediately after price agreement is reached. Now is a good time for you also to contact your lender to start the process of providing them with the necessary paperwork. The loan commitment date is a very important deadline on the contract so the process should be started as soon as possible. The lender may ask you for a check at this time to cover your credit report and the appraisal. The lender orders the appraisal.
2. Make sure the money is in the bank to cover your earnest money check. This money is usually held by the title company. Regulations require that it must be cashed within ten days of price agreement. It is held in a non-interest bearing account and credited towards your down payment at closing.
3. Discuss the building inspections with your agent and schedule them as soon as possible. As your agent, I coordinate the building inspections and accompany you on them. It is a very good idea for you to be present also. A good building inspector will be glad to point things out as he goes along. The standard time limit for this contingency in the St Louis area is within 10 to 15 days of reaching price agreement. The standard inspections that are done at this time are: overall building inspection, radon inspection, termite inspection and sewer lateral line inspection.
4. As your agent I forward the contract to the title company. The title company examines the condition of the title to make sure there are no defects. The bank will require title insurance coverage. The title insurance company will also order the survey of your choice: spot (about $175) or stake ($350-$450). The stake survey is the one where they tag all of the corners and locate the improvements on the property. It is a more in-depth analysis and gives you more coverage. For a better explanation please contact me for a detailed brochure. The stake survey is recommended. This contingency is defaulted on the standard residential sale contract to a 25 day time deadline.
5. At this time, you need to start getting your homeowners insurance lined up. The lender will need a copy of your policy before giving loan commitment. Also, this is a time to find out if there have been numerous insurance claims on this property making it uninsurable or high risk. If the home should turn out to be uninsurable or require a higher than normal rate, there is a 10 to 15 day deadline on getting back to the seller to negotiate.
6. About 2 weeks before closing, is the time to let the utility companies know you are going to be the new owner. Here are the standard utility companies to call:
- Laclede Gas – 314-621-6960
- Missouri American Water – 866-430-0820; www.amwater.com
- St.Louis city water department – 314-771-2255
- AmerenUE -800-552-7583
Once we have received loan commitment it is time to coordinate the closing time with the title company, the lender and me. Standard practice is that the closing takes place at the title company. I usually suggest the appointment be as early in the morning as possible which is generally 8:30 a.m. and no later than 2 p.m. Things get sticky on closing day because of a thing called “funding”. The deal is not considered closed until the bank’s wire is in the hands of the title company. Buyers will not be able to take possession until then. So… if you close late in the day you can risk not taking possession until the next day.
At this time we will also set up the walk-through. I will communicate with the selling agent to get copies of all receipts and lien waivers of work that has been done per our building inspection request. We prefer that the walk-through happen after the seller has moved out.
A couple of days before closing you will receive a closing disclosure from your lender which will give you an approximate dollar number for the cashier’s check you will need to bring to closing. Sometimes this time period gets a little anxiety ridden because there are several entities that have to compare the numbers and it can get very close to closing time before we have an exact number. Remember this must be a cashier’s check. It cannot be a personal check.
The contract to close time period can get stressful. During the inspections you have a bunch of professionals picking your new house apart. You have a lender nagging you for documents. You have an agent asking you to make big decisions and you have DEADLINES. And, you know what else happens – you will undoubtedly experience “buyer’s remorse.” You just pray that, if you are a couple, you don’t both get it at the same time or that it happens after you have signed the closing papers.