Home Seller 101: Ratification to Settlement

This week I’ll dive into the part of the process for a seller following acceptance of an offer. At this point you will have selected the best offer for you and officially ratified. Contracts with less contingencies included (home inspection, appraisal, financing, association docs, etc) are going to require less work for the seller. In the greater DC metro area, it is common to receive offers from buyers that have waived one or multiple contingencies due to the competitive nature of the seller’s market. Your trusted Realtor should have walked you through the pros and cons of each offer and explained what contingencies were waived and included when selecting an offer.

Step 10: Deliver association documents. If your home is part of a home owners association or condo association you are required to deliver to the buyer a copy of the governing documents. These will include a resale disclosure, budget, recent board minutes, reserve study, rules and regulations, etc (much of the time these documents run hundreds of pages). A good Realtor will have the documents ready to go when you are under contract. It can take up to three weeks to get the documents from an association so my recommendation is to order them either before or as soon as you are listed. Once the documents are delivered to the buyer by your agent, they will have 72 hours to review them. If they find any “deal breakers” within the content they have the opportunity to void the offer.

Step 11: Coordinate inspections. In the fast-paced market close to Washington, DC, a seller can expect that a home inspection and other inspections will likely occur within the first week after ratification, IF any were included in the contract. If you are living at the home, your agent will coordinate with you to ensure the inspection times work for your schedule. Once it has occurred, there may be a few or several repairs that need to be addressed. Your agent should be able to recommend qualified contractors to help with this. You’ll want to save the receipts so that your agent is able to share with the buyer as evidence that you’ve done the work.

Step 12: Ensure delivery of earnest money deposit (EMD). Also usually within the first week of ratification the buyer will deliver their EMD to the designated settlement agent/title company. The EMD is the buyer’s good-faith deposit to show that he or she has intentions of completing the deal. It is also the money that the seller may be entitled to if the buyer doesn’t follow through with settlement. Your agent should be in touch with the title company to make sure the money was delivered on time.

Step 13: Schedule and prepare for appraisal. At some point in the next couple of weeks, an appraiser will likely visit your home to determine a fair property value. The buyer’s lender will set this up once a contract is ratified. Your trusted agent should coordinate with you to ensure the visit coordinates with your schedule, and they should also prepare an appraisal package to deliver to the appraiser. An appraisal package will include information on comparable sales and updates to the home to give him or her extra insight on how the list price was determined.

Step 14: Track progress of buyer financing. Throughout the next few weeks as you move toward settlement, your agent should be in touch with the buyer’s lender to ensure the buyer is going to be approved for the loan and that he or she is able to close on time. At this point it does get somewhat quiet up until the week of settlement.

Step 15: Schedule settlement and final walk through. Your agent will want to schedule settlement a few weeks in advance to ensure it will work with your schedule. You can also anticipate that the buyer will visit the unit one final time (usually the night before settlement or morning of) to inspect. While there, the buyer and buyer agent will make sure all repairs were done, nothing was damaged while moving out, and that nothing has broken since the inspection. You’ll want to make sure that the repairs have been done and the home is ready to go for the buyer at that point.

Step 16: Settlement. It is at this point that you will go to the title company office to sign the official paperwork for the sale. Once all documents are signed by both the buyer and seller, the documents are recorded by the county and the funds are dispersed. This is usually the following day in our market.

Thanks for taking the time to read! Stay tuned for next week’s post as I begin to do a deep dive into contingencies.

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