Contract to Closing

Contract to Closing: The Process Step-by-Step.

In Vermont, a written offer is made by filling out a Purchase and Sale Contract with terms and contingencies that are acceptable to you, and hopefully the Seller! Your agent at Mad River Valley Real Estate will help guide you through the process of writing and submitting a Purcase and Sale Contract offer. The offer is typically submitted with an Initial Deposit, which can only be deposited after a fully agreed-upon and executed contract is in place.

Some important tips to keep in mind to streamline the process:

• We will assist you in drafting all the paperwork for your purchase and make sure that you have copies of everything.
• Stick to the schedule. Now that you have made an offer (that is hopefully accepted!), you and the seller will be given a timeline to mark every stage in the process of closing the real estate contract. Meeting the requirements on time ensures a smoother flow of negotiations so that each party involved is not in breach of their agreements. During the process we will keep you constantly updated, so you will always be prepared for the next step.

The Closing Agent.

You will need to engage an attorney who will act as the closing agent, and will provide you legal advice throughout the process. Your attorney will research the complete recorded history of the property to ensure that the title is free and clear of encumbrances by the date of closing and that all new encumbrances are properly added to the title. Some properties are subject to covenants and restrictions which limit various activities such as building restrictions. There may be recorded easements and encroachments, which limit the rights to use your property.

How to Hold Title.

You may wish to consult your attorney or tax advisor on the best way to hold title. Different methods of holding title have different legal, estate and tax implications, especially when selling or upon death of the title holder.

Inspections.

Once your offer is accepted by the seller, you will need to have a property inspector inspect the property within the timeframe that was agreed upon in the effective contract to purchase. You may elect to have different inspectors inspect the property, if you wish to obtain professional opinions from inspectors who specialize in a specific area (eg. roof, radon, structure). We can recommend several different inspectors.

Depending on the outcome of these inspections, one of two things may happen:

1. Either each milestone is successfully closed and the contingencies will be removed, bringing you one step closer to the close, or
2. 2. The Buyer, after reviewing the inspection reports, responds with a Conditional Termination of the Contract if certain repairs or credits are not made by the Seller.

Appraisal and Lending.

It is imperative that you keep in close communication with your lender, who will let you know when additional documents are needed to approve your loan application and fund your loan. If the agreement is conditional upon financing, then the property will be appraised by a licensed appraiser to determine the value for the lending institution, via a third party. This is done so that the lending institution can confirm their investment in your property is accurate. Appraisers are specialists in determining the value of properties, based on a combination of square footage measurements, building costs, recent sales of comparable properties, operating income, etc. Be sure to communicate with your lender to make sure that a mortgage loan commitment is issued prior to your Financing Contingency Date.

Property Insurance.

If you are obtaining a loan, you will be required by your lender to purchase a certain amount of insurance on the property. The value will depend on the lending institution and the purchase price of the property. You may be able to save hundreds of dollars a year on homeowners insurance by shopping around for insurance.

We will be happy to recommend experienced knowledgeable insurance agents for every property type.

Remember to register with us to save your favorite listings, save your custom searches, and to get email updates when similar properties are posted. Questions about the home buying process? We're happy to assist you! Contact us today to get the inside scoop on Sugarbush area neighborhoods and start viewing properties that interest you.