A common question I receive from home sellers is “When should I start boxing up?” The hidden subtext behind the question is: Will the buyer perform, and will we close on time?
No one wants to start packing years of accumulated possessions and making arrangements with moving companies unless they know that the sale will close so their efforts–and patience for living out of boxes–will not be made in vain. A smooth transition requires good communication between the agents and buyers & sellers. Hopefully these communications where well thought out PRIOR TO accepting an offer, so everyone’s needs were addressed IN THE CONTRACT.
Here are the steps to follow and questions to ask:
Refer to the contract. Think about it. If you bought a car, would you want to know when you could get the keys and drive it off the lot? Same goes for a home. So, the details should all be in the contract if your agents did their job.
Check Possession. The term possession means when the seller must turn the home over to the buyer. For the buyer to take possession, the home should be free of all personal property of the seller, vacant, and broom cleaned. The date of possession might be a fixed day, upon close of escrow (COE) or it can be any number of days after COE. If the seller retains possession after COE, the terms are usually spelled out in a Purchase Agreement Addendum (PAA), or a Residential Lease Back After Sale (RLAS) form if more than 30 days.
Check contingency removals. If the buyer has removed ALL contingencies, then you as a seller have reasonable assurances that they will close escrow (meaning, the buyer risks losing some or all of their deposit money if they do not close escrow). However, this does not eliminate the possibility of delays for reasons including lender, wire transfer, title, or buyer timing delays/problems, among others.
Communicate with the lender. Your agent and the buyer’s agent should be in clear communication with any involved lender. Said lender should be aware of the closing date. Warning: If the lender keeps asking for additional conditions to be satisfied, and if he/she regularly pushes back “…going to docs” (drawing loan documents for signatures), you can expect a delay in closing. In rare cases, the buyers can sign loan documents the day before a planned closing and you can “record special” the next day with title. Otherwise, I prefer to have loan docs signed SEVERAL days in advance of the closing date. If you plan to close on a Monday, try to get docs signed Thursday or earlier.
Communicate with your buyer. Keep lines of communication open and clear with buyers and buyer’s agent. If the agents are working together, they will do a good job of keeping clients sensitive to the needs of the other parties. A buyer working in good faith may have legitimate reasons for needing more time. Sellers, similarly, may need assurances of a buyer’s commitment if they are set to incur moving expenses, be inconvenienced by repairs or termite work, or need to sign a lease or remove contingencies on their own purchase. It takes a team effort. Don’t create a problem if a little flexibility on all sides will keep the deal together.
Ask escrow. While escrow does not represent the buyer or seller, they do owe you honest answers to matters that affect your escrow. It is perfectly OK to ask them if there are any other items on their checklist that need completion prior to being able to close escrow. They should be able to tell you if the buyer needs to sign escrow instructions or amendments, and if the lender has told them when they should expect loan documents. If they have everything they need, they can sometimes tell you down to a couple of hours when they’ll hear confirmation of recording from title. If they call you and say “It’s recorded,” congratulations. The sale has closed. When you hear those words you’re either already out or the wheels are in motion.
Still worried? Talk to your agent, be flexible, and just do it. PACK. There is always an element of risk and faith. So long as all parties are proceeding with goodwill, it will all work out. Now, breathe.