You do not want to make any serious mistakes during a real estate closing, whether you’re buying or selling the property. There is far too much money on the line to take that type of risk. Working with an experienced attorney may help, but let’s start by breaking down some of the most frequently asked questions.
What is a contingency clause?
A contingency clause is essentially just a clause in the contract saying that it is only binding if those terms are met. For instance, a common contingency is securing financing. A buyer who makes an offer and then gets denied for a mortgage is not still obligated to buy the property.
Does the home have to pass inspection?
Not always. Most homes are inspected, and mortgage lenders may require it. However, some buyers will make cash offers without making it contingent on an inspection if they want to have a better chance of getting the property. Whether or not you feel comfortable with this is up to you.
Can you move in as soon as you close on the property?
It depends. This is often how it works; you close, the property becomes yours, you get the key, and you can drive straight there and go inside. However, some sellers put in the contract that they want a move-in date after closing. They may even offer to rent the house back from you until they move out.
Do you have to pay closing costs?
Someone does. It may or may not be you. If you’re buying, the default is that you need to pay the closing costs. However, you can ask for the seller to cover them while negotiating. In some cases, you can have them rolled into the mortgage so that the payment gets taken out of the loan and you pay it back over time.
How should you get started?
Buying and selling property can get complicated, especially with high-value transactions. The best way to get started is by ensuring that you understand every step in the legal process.