Once I have a ratified real estate contract, what happens next?

Alright home-buyer, you’re under contract. Awesome! Now, the real work begins. What do I mean? Remember those contingencies we inserted in your contract? Yeah, they need to be fulfilled in order for us to get this property across the finish line. It’s going to go something like this:

  • Home inspection within a limited time, typically 10-14 days. 
  • Home inspection results are negotiated. A number of things can happen if repairs are needed, such as, the seller will make all or certain repairs, or the seller will make no repairs. Either one can happen and that extends the negotiations a little further.
  •  If the seller does some repairs, they will need to be done by qualified professionals, preferably licensed and insured contractors, and then the repairs are re-inspected for quality and compliance. Proof of payment for repairs will need to be delivered to the closing agent and typically your Realtor.
  • If the seller chooses not to do repairs, you can buy the home “as-is”, have the repairs made yourself or you can walk away.
  • If repairs are done and agreed upon, the home inspection contingency is removed.
  • Loan contingency. As soon as you get your contract ratified, you should be on your way to see your lender with a pile of papers including 2-3 months of bank statements, 2-3 years of tax returns and proof of employment, income and savings. Your ability to pay a mortgage payment will be weighed against your income and expenses. If you qualify, you will receive your pre-approval and you move on to the next contingency.
  • Appraisal contingency. You offered a specific price for your potential new home. Your lender will contact an appraiser to go by and do an appraisal. The home will need to measure up to, or above, your offer price or a couple of things can happen. 1. You may need to bring money to the table at closing if the property didn’t appraise for what you offered. 2. You can ask the seller to drop the price to meet the appraisal. 3. You and the seller can each make concessions. You can add money to your purchase and the seller can drop his price. 4. You can walk away.
  • If you pass the appraisal, your loan is approved and all repairs are made, you will get a “clear to close” from your lender.
  • Once you have the clear to close, you will sit down with your closing attorney, title company or other qualified closing agent and sign a mountain of documents.
  • The sale will be recorded in your courthouse and you will receive the keys to your new home.

Those are just the mechanics that happen after the ratified contract. There are just as many issues that you will face during the loan process. That’s a topic for another blog, but you can see that just signing a purchase offer is really just the beginning of the home-ownership process. The mechanics that follow get you the keys.

Winchester / Frederick County Real Estate Market Report – January – February 2015

It’s official, the Winchester / Frederick County real estate market is in recovery. A lot of us in the business have wanted to say that for a long time, and we have, but it has been more out of hope than out of statistical fact. Today, the numbers are starting to agree with us.

The number of properties sold between January 1 – February 28, 2015 stands at 186. That’s an 8% increase from the same period in 2014. The number of foreclosures (REOs) and short sales have dropped 11% over that same period. Distressed properties are getting harder to find, and that’s good news for fair market sellers.

There are still some challenges in the market. The number of available listings is currently 632. A healthy Winchester / Frederick County real estate market typically runs between 500-550 active listings. The increase in inventory suppresses price growth for sellers, but a lot of sellers are learning how to overcome that hurdle. There are four key things that help sellers beat a high inventory market. If they price their home well, make it easy to show, keep it in good condition and are blessed with a great location they can overcome an inflated inventory with little problem.

The average days on the market is a good indicator of a seller’s ability to meet those four key criteria. In January, more homes sold in the 0-14 days on the market than any other period up to and beyond 100 days. There were 23 of the 98 homes sold that were in that 0 -14 day window. Sadly, there were 30 that went beyond 100 days. When a home is on the market for 100+ days it’s time to take inventory and see if there is a problem. There may not be one, but it’s a good indicator that one of the four keys is being violated.

February showed a similar pattern with 25 of 88 being sold in those first 14 days. February also had 30 homes that languished beyond 100 days. Here again, refer back to the keys. Is one being violated? There was a reduction in number of units sold in February, but there was also bad weather and one of the coldest months this winter. It’s not necessary an anomaly for the month.

March will help determine if the current changes are a true trend, but at this point it looks good. The Winchester / Frederick County real estate market is finally in recovery for 2015. It has been a long eight years coming, but we’re ready for the change.