HOUSE HUNTING AND PURCHASE AGREEMENT
After you’ve been pre-approved for a mortgage you can now being searching for a house within the price range of your pre-approval. This part of the process is done primarily by you and your real estate agent. Once you’ve found a house that you like it’s time to make the formal offer. This is done by signing a purchase and sale agreement. After you sign it the agreement it is sent to the sellers for their approval. If they sign the agreement it is now a binding and a valid contract for sale.
The Purchase and Sale Agreement will likely have several contingencies in it. If you are seeking a mortgage there will be a mortgage contingency clause. This means that you have until a certain date to obtain final approval of your mortgage from your lender. If you do not have final approval by that date then you will need to request an extension. Another common contingency clause is an inspection clause. This means that you will have a certain amount of time to inspect the property that you are about to purchase. Usually a professional is hired to conduct the inspection and provide a report on their findings. If issues are found you will have a certain amount of time to either back out of the deal entirely or negotiate a lower price with the seller.
It is important that you not let your contingency dates expire without the condition being satisfied. Do not let your mortgage contingency date expire if you do not actually have a mortgage. Do not let your inspection date expire if you have not had an inspection done. If you do and you do not actually have final approval of the mortgage or your inspection has not been completed, the Seller can hold you to the deal and force you to close. If you ultimately do not get final approval for a mortgage or if the inspection report reveals certain problems the seller could force you to go through with the deal regardless. However, if you notify the seller before the dates have expired then you can in most deals be released from your obligation to purchase the property and get your security deposit returned.
If hired to represent you, Attorney McEntee will keep track of all contingency dates and apply for any extensions that may be needed. After you have signed a Purchase and Sale Agreement, it’s time to move out to the MORTGAGE APPLICATION.