Buyer Guide
Buying property involves a seemingly endless number of details. This guide is designed to make the process easier to navigate and understand.6. BUYER P&S TIMELINE
CONGRATULATIONS! The seller has signed your Purchase & Sale contract! We, along with your attorney, will help keep track of the deadlines, and will of course negotiate on your behalf as you move through the process toward the closing table. Here is an overview of key deadlines and components we hope you’ll find helpful. (Numbers in bold refer to the relevant paragraph on P&S.)
Since the loan process occurs within the P&S Timeline, also see the next section, The Loan Process.
3 – DEPOSIT. You submitted an initial deposit (aka “earnest money”) with the P&S Agreement, and must submit the second deposit by the date shown on the third line of this paragraph.
5.2 – APPLYING FOR A MORTGAGE. Submitting your loan application is the first step. You promise to do this by the mortgage application date—typically 5-7 days from signed contract.
THE LOAN PROCESS. Since the loan process is concurrent with the P&S Timeline, also refer to chapter 7, The Loan Process. In order to get your loan approved, four things need to happen. The bank will…
1. Verify your income and expenses (using tax returns, W2s, pay-stubs, etc.)
2. Verify the source of funds you will use for down payment & closing costs
3. Run a credit report to be sure you meet the requirements of the loan you are applying for.
4. Order an appraisal to make sure the mortgage is in line with the value of the property. (If the property does not appraise, you can cancel, or try to renegotiate the price.)
5.3 – INSPECTION CONTINGENCY DATE. Inspections typically take 2-4 hours, depending on the inspector and the property. The purpose of the inspection is both for you to familiarize yourself with how the property functions and to scrutinize it for any safety, mechanical or structural defects. It typically takes a couple of days for the inspector to give you a written report. You have until the contingency date to convey whether the inspection was satisfactory. After reviewing the report, you will determine whether…
1. The inspection was satisfactory, and you wish to move forward.
2. The inspection was unsatisfactory, and you wish to cancel the agreement.
3. The inspection was unsatisfactory, but you still want to purchase the property if you can negotiate an agreement with the sellers to resolve the issues. You will either ask them to address any safety, mechanical, or structural issues, or you will ask for a monetary concession to address those issues yourself, which allows you to be in control of the repairs.
Occasionally an extension is warranted if professional estimates need to be obtained as part of this negotiation process.
Assuming an agreement is reached, all parties will sign a revised P&S. If there has been an extension, the second deposit is typically delayed until agreement is reached.
5.4 – INSURANCE CONTINGENCY DATE. You need to make sure the property is both insurable—and insurable at an acceptable cost. If for any reason, despite diligent efforts, you are unable to obtain a satisfactory insurance binder, we need to submit a written cancellation notice, and a copy of proof of insurance application by the contingency date.
5.5 – MORTGAGE CONTINGENCY DATE. If for any reason, despite diligent efforts, you are unable to obtain a commitment letter from your lender, we need to submit a written cancellation notice and a copy of the mortgage denial letter by the mortgage contingency date.
5.6 – SEPTIC SYSTEM INSPECTION DATE. A passing Title 5 (or a Certificate of Compliance for a newly installed septic system) is required for most closings. Otherwise, careful provisions must be put in place, usually including escrowing 150% of the estimated cost to install a new system.
If the seller hasn’t already done a septic system inspection, they will need to hire a licensed excavator to do so. We specify a date by which they must provide us with the report—typically 2 to 3 weeks.
The system may pass, pass with conditions, or fail.
If the system is given a conditional pass, this means it requires some relatively minor repairs. The seller will receive the passing report after they complete the repairs.
If the system fails, you, the buyer, may cancel the agreement. But in most cases, the seller has a new system designed and installed. They may also ask you to offset the expense of a new system. Assuming an agreement is reached, all parties will sign a revised P&S.
24 – SMOKE AND CO DETECTORS. The seller must obtain a Smoke & Carbon Monoxide Detector Certificate from the Fire Chief, to be delivered at closing. The Fire Chief will make sure the detectors are installed where they are supposed to be, are functioning, and are not too old.
For wood/pellet stoves:If the seller has a wood stove permit, you’ll be given a copy by closing. If they do not, the pipe will probably be disconnected before closing, and it will be up to you to make sure it is installed to code, or use the stove at your own risk.
For DSL properties only:If the property you are buying is served by Verizon DSL, we will ask the seller NOT to cancel service before making careful arrangements with you. We know from experience that if the seller closes their account, DSL service can be lost, resulting in the buyer being put on a waiting list.
FUEL. In most cases, the seller will have the oil or propane tank filled the week before closing, and you will pay for a full tank at closing. You can ask for the fuel gauge to be read, and pay for a partial tank, but this method is less accurate, and is rarely used.
HOME STRETCH. Your attorney will guide you through the home stretch to closing. Make sure you are in touch with her/him. Set up accounts with service providers, and arrange for utilities and insurance to begin as of closing day.
22. – WALKTHROUGH. Within 24 hours of closing—most often, the morning of—you will do a walk-though. This is largely a formality to ascertain that the property has been left broom clean, with all personal property and rubbish removed. (If this is not the case, we will ask the sellers to resolve any issues.)
CLOSING. Closing typically occurs at the buyer’s attorney’s office. Sometimes, it is held at the Registry of Deeds. If you are getting financing, you will arrive before the seller to complete mortgage documents with your attorney. Your attorney will guide you through the closing, which typically takes about an hour. Cash closings can take as little as 15 minutes. (See The Loan Process for details)
Guides written by Barney Stein,
LVRE agent since 2007
6. BUYER P&S TIMELINE
CONGRATULATIONS! The seller has signed your Purchase & Sale contract! We, along with your attorney, will help keep track of the deadlines, and will of course negotiate on your behalf as you move through the process toward the closing table. Here is an overview of key deadlines and components we hope you’ll find helpful. (Numbers in bold refer to the relevant paragraph on P&S.)
Since the loan process occurs within the P&S Timeline, also see the next section, The Loan Process.
3 – DEPOSIT. You submitted an initial deposit (aka “earnest money”) with the P&S Agreement, and must submit the second deposit by the date shown on the third line of this paragraph.
5.2 – APPLYING FOR A MORTGAGE. Submitting your loan application is the first step. You promise to do this by the mortgage application date—typically 5-7 days from signed contract.
THE LOAN PROCESS. Since the loan process is concurrent with the P&S Timeline, also refer to chapter 7, The Loan Process. In order to get your loan approved, four things need to happen. The bank will…
1. Verify your income and expenses (using tax returns, W2s, pay-stubs, etc.)
2. Verify the source of funds you will use for down payment & closing costs
3. Run a credit report to be sure you meet the requirements of the loan you are applying for.
4. Order an appraisal to make sure the mortgage is in line with the value of the property. (If the property does not appraise, you can cancel, or try to renegotiate the price.)
5.3 – INSPECTION CONTINGENCY DATE. Inspections typically take 2-4 hours, depending on the inspector and the property. The purpose of the inspection is both for you to familiarize yourself with how the property functions and to scrutinize it for any safety, mechanical or structural defects. It typically takes a couple of days for the inspector to give you a written report. You have until the contingency date to convey whether the inspection was satisfactory. After reviewing the report, you will determine whether…
1. The inspection was satisfactory, and you wish to move forward.
2. The inspection was unsatisfactory, and you wish to cancel the agreement.
3. The inspection was unsatisfactory, but you still want to purchase the property if you can negotiate an agreement with the sellers to resolve the issues. You will either ask them to address any safety, mechanical, or structural issues, or you will ask for a monetary concession to address those issues yourself, which allows you to be in control of the repairs.
Occasionally an extension is warranted if professional estimates need to be obtained as part of this negotiation process.
Assuming an agreement is reached, all parties will sign a revised P&S. If there has been an extension, the second deposit is typically delayed until agreement is reached.
5.4 – INSURANCE CONTINGENCY DATE. You need to make sure the property is both insurable—and insurable at an acceptable cost. If for any reason, despite diligent efforts, you are unable to obtain a satisfactory insurance binder, we need to submit a written cancellation notice, and a copy of proof of insurance application by the contingency date.
5.5 – MORTGAGE CONTINGENCY DATE. If for any reason, despite diligent efforts, you are unable to obtain a commitment letter from your lender, we need to submit a written cancellation notice and a copy of the mortgage denial letter by the mortgage contingency date.
5.6 – SEPTIC SYSTEM INSPECTION DATE. A passing Title 5 (or a Certificate of Compliance for a newly installed septic system) is required for most closings. Otherwise, careful provisions must be put in place, usually including escrowing 150% of the estimated cost to install a new system.
If the seller hasn’t already done a septic system inspection, they will need to hire a licensed excavator to do so. We specify a date by which they must provide us with the report—typically 2 to 3 weeks.
The system may pass, pass with conditions, or fail.
If the system is given a conditional pass, this means it requires some relatively minor repairs. The seller will receive the passing report after they complete the repairs.
If the system fails, you, the buyer, may cancel the agreement. But in most cases, the seller has a new system designed and installed. They may also ask you to offset the expense of a new system. Assuming an agreement is reached, all parties will sign a revised P&S.
24 – SMOKE AND CO DETECTORS. The seller must obtain a Smoke & Carbon Monoxide Detector Certificate from the Fire Chief, to be delivered at closing. The Fire Chief will make sure the detectors are installed where they are supposed to be, are functioning, and are not too old.
For wood/pellet stoves:If the seller has a wood stove permit, you’ll be given a copy by closing. If they do not, the pipe will probably be disconnected before closing, and it will be up to you to make sure it is installed to code, or use the stove at your own risk.
For DSL properties only:If the property you are buying is served by Verizon DSL, we will ask the seller NOT to cancel service before making careful arrangements with you. We know from experience that if the seller closes their account, DSL service can be lost, resulting in the buyer being put on a waiting list.
FUEL. In most cases, the seller will have the oil or propane tank filled the week before closing, and you will pay for a full tank at closing. You can ask for the fuel gauge to be read, and pay for a partial tank, but this method is less accurate, and is rarely used.
HOME STRETCH. Your attorney will guide you through the home stretch to closing. Make sure you are in touch with her/him. Set up accounts with service providers, and arrange for utilities and insurance to begin as of closing day.
22. – WALKTHROUGH. Within 24 hours of closing—most often, the morning of—you will do a walk-though. This is largely a formality to ascertain that the property has been left broom clean, with all personal property and rubbish removed. (If this is not the case, we will ask the sellers to resolve any issues.)
CLOSING. Closing typically occurs at the buyer’s attorney’s office. Sometimes, it is held at the Registry of Deeds. If you are getting financing, you will arrive before the seller to complete mortgage documents with your attorney. Your attorney will guide you through the closing, which typically takes about an hour. Cash closings can take as little as 15 minutes. (See The Loan Process for details)