We finally have a contract on our home after a long, hard selling period. After signing, I thought I can begin to pack as we have a home already purchased. Our agent told us to wait as the contract gives our buyers a chance to change their minds if they don’t like the inspection report, the homeowner’s association documents or if they can’t get a mortgage. How long do we have to wait?
Almost every contract on a home has contingencies and a time frame for them.
- Inspections – Most buyers hire a home inspector who generates a report that reflects the condition of your home. Your buyers can change their mind if they are not happy with the condition or negotiations in fixing what they feel is important. The contingency period for home inspections is in your contract. It is usually 10-15 days.
- Homeowner’s Association – If a property is governed by a homeowner’s association, the seller is responsible to get homeowner associations documents, financials and insurance to the buyer with 15 days from signing the contract. Upon receipt, your buyers have 5 days to change their minds about purchasing.
- Mortgage – Your buyers most likely provided a preapproval letter from a mortgage company when they submitted the contract, showing they are qualified to purchase at the agreed upon price. Also, your contract specifies who they are using for financing and the terms of their mortgage. This information shows you that they are well on their way to getting the financing they need to purchase your home. In today’s market, one concern is the appraisal. If this value comes in lower than the contract price, you are back to negotiating price. I suggest that you wait to begin packing until the appraisal report is issued.
A good real estate agent will talk you through each one of these bumps in the road, answering your questions and informing you when the contingencies are satisfied. Usually within 3 weeks of an agreed upon contract, sellers feel comfortable to pull out the boxes and begin packing. It is important, however, to wait until your agent gives you the okay because the very last thing you want is a home full of boxes that is back on the market.