By Melissa Dorman, March 6, 2021
By Melissa Dorman, March 6, 2021
Purchasing a home in a hot seller’s market can be a daunting task for any buyer. With multiple offer situations, offers going over asking price, and homes selling as-is, it can begin to feel like the seller has all the control.
While this may seem like the case, it is not entirely true. In the beginning, a buyer may need to go above and beyond to get an offer accepted. This can easily feel like giving too much, but it is important to remember that the real estate sale agreement is there to protect buyers and sellers from unwanted risks.
As a buyer, you have requirements and work to do once an offer is accepted. You also have the right and opportunity to walk away from the transaction and keep your earnest money, should something big and scary come up.
Once you are the winning bid and the contract is signed, the clock starts ticking and things move quickly! Buyers must deposit earnest money and finalize the loan application within the first few days while the agent schedules inspections and coordinates with all parties.
With that said, the following are a few of the protections that exist for all buyers. It is important to keep these contingencies in mind when preparing a strong offer because they are your rights and are your ticket to a successful transaction.
As soon as you have an accepted offer, you will receive a property disclosure from the seller. This is when the sellers disclose everything they know about the property. In some cases, this information may be available ahead of time, though it is usually sent shortly after acceptance. Upon receipt, a buyer has 5 days to review the document and object if something is unacceptable. If you do have concerns, it is important to discuss them with your agent as soon as possible as the timeline has begun!
This document is sent to the buyers from the title company. The title company will do a review of the preliminary title report and note any concerns or red flags that they find, though a buyer should review the document in detail as well. If you have questions about this document, you should always contact the title company for clarification as agents are not authorized to advise on the contents of this report. Buyers once again have 5 days upon receipt to review the document and respond as needed.
The timeline for inspections depends on the contents of your offer. The contract automatically gives the buyer ten days to perform inspections, gather bids, and negotiate with the sellers. Depending on their offer strategy, some buyers will shorten this timeline.
Some common inspections are a general home inspection, radon test, sewer scope, and underground tank search. These inspections go beyond what you see during the showing and give the buyer a more complete picture of the home’s overall condition.
If something substantial does come up during inspections, a buyer may choose to negotiate with the seller or to back out of the transaction. It is normal for homes to need some work, but not every buyer is willing and able to accept a home depending on the condition or need for repairs. Always discuss any concerns with the agent as soon as possible as the inspection period is the last opportunity for a buyer to back out of a transaction.