Using Football to Explain Your Home’s Closing
How does football relate to the closing of your property? The analogy we’ve come up with makes a lot of sense, and we hope it will help shine some new light on the process for you if you’ve been thinking about selling.
For this analogy, let’s say we are starting with the ball right on our own one-yard line. There are 99 yards between you and the goal line. Once an offer is accepted, you’ve made it to midfield.
An offer will be contingent on a few things, including due diligence. Due diligence is basically any type of inspection a buyer wants to do. We know that 24% of contracts fail and 80% of those are due to due diligence. The buyer could decide they don’t want to buy at this point for pretty much any reason.
The good news is that once we’ve made it past due diligence, we are in the red zone. Good offense so far, but you’re not quite there yet. Now the offer is contingent upon the financing going through.
Your buyer should already be pre-approved by a lender; however, that still doesn’t mean they will get the loan. The “defense” in this situation is underwriting. It’s a secret weapon that is going to look for every reason not to lend the buyer money, so certain things can come up.“”
A good agent will be in contact with the lender who issued the pre-approval to ask certain questions to see if they will be able to pay. You want to find out as much as you can up front about their financing.
After the financing hurdle has been cleared, you are on the 10-yard line. The offer is now contingent upon the appraisal. In the last couple of years we’ve had more and more issues with appraisals because the market is improving. Homes still have to appraise for buyers to be able to purchase. If you get a bad appraisal, you do have options to remedy it without throwing the deal away.
After you’re through the appraisal, you are at the five-yard line. The final hurdle is the settlement table. This is where we sign all the documents with the title company to be able to transfer the deed into the buyer’s name. It usually happens a week or two after the appraisal.
Bad things can happen, like a medical emergency or the buyer losing their job, but it’s not likely. Now you are at the one-yard line, and the property must fund in order for the seller to receive the money and the buyer to get the deed. Once that has happened, you are in the end zone! Time for a touchdown dance!
If you have any questions for me, don’t hesitate to give me a call or send me an email. I look forward to hearing from you.