Contract to Close
CONTRACT TO CLOSE
Upon execution of REPC:
Give copy of contract to Buyer/Seller, Escrow Officer, Lender.
Make sure your Opportunity has been created and contract is submitted for review.
Collect Earnest Money within 4 days of execution. Create EM Receipt and make copy of receipt and check and turn into the MCA (Box inside office). If it’s a weekend, hold onto it. You are responsible for the Earnest Money! Each office may have a slightly different protocol for this.
When sharing with Escrow make sure they have clients mailing address, email and phone number. Also commission amount and Lender information. Make sure they have all Addenda that may be added during escrow period.
Daily monitor your critical dates: Due Diligence, Financing and Appraisal and Settlement.
Collect or Send all Seller’s disclosures including HOA docs. Section 7 of REPC.
( 7). SELLER DISCLOSURES. No later than the Seller Disclosure Deadline referenced in Section 24(a), Seller shall provide to Buyer the following documents in hard copy or electronic format which are collectively referred to as the "Seller Disclosures": (a) a written Seller property condition disclosure for the Property, completed, signed and dated by Seller as provided in Section 10.3; (b) a Lead-Based Paint Disclosure & Acknowledgement for the Property, completed, signed and dated by Seller (only if the Property was built prior to 1978); (c) a Commitment for Title Insurance as referenced in Section 6.1; (d) a copy of any restrictive covenants (CC&R’s), rules and regulations affecting the Property; (e) a copy of the most recent minutes, budget and financial statement for the homeowners’ association, if any; (f) a copy of any long-term tenant lease or rental agreements affecting the Property not expiring prior to Closing; (g) a copy of any short-term rental booking schedule (as of the Seller Disclosure Deadline) for guest use of the Property after Closing; (h) a copy of any existing property management agreements affecting the Property; (i) evidence of any water rights and/or water shares referenced in Section 1.4; (j) written notice of any claims and/or conditions known to Seller relating to environmental problems and building or zoning code violations; (k) In general, the sale or other disposition of a U.S. real property interest by a foreign person is subject to income tax withholding under the Foreign Investment in Real Property Tax Act of 1980 (FIRPTA). A “foreign person” includes a non-resident alien individual, foreign corporation, partnership, trust or estate. If FIRPTA applies to Seller, Seller is advised that Buyer or other qualified substitute may be legally required to withhold this tax at Closing. In order to avoid closing delays, if Seller is a foreign person under FIRPTA, Seller shall advise Buyer in writing; and (l) Other (specify) _
- Give Buyer (at least) two names for Home Inspectors. I recommend always getting an Inspection.
- When Inspection returns go over recommended repairs with Inspector and Client. Usually the Inspector recommended repairs are on the "Summary Page". You can add Inspection Report to your Opportunity but this is not a required document.
- Negotiate repairs with Buyer and Sellers Agent. You will notice that there are only 3 lines for adding repairs on the Resolution of Due Diligence form. This is because Lenders and especially Underwriters do not want to see a "Laundry list" of needed repairs. If you have more requested repairs that the lines will allow, you may use a blank addendum to add those items. Or your Buyer may ask for the following remedies instead of repairs: a. Seller can pay closing costs. b. Seller can reduce price c. Seller can do repairs. d. Click checkbox if waiving Due Diligence conditions.
- Repair negotiations must be completed by the Due Diligence deadline, or deadline must be extended to protect Buyers Earnest Money. Use form 60, "Resolution of Due Diligence Addendum".
- A Seller may agree to the repairs or repair remedies, or they may counter or just reject. Remember if they reject, you are still Under Contract! They are just rejecting the Addendum. Keep in mind that this is the "Second negotiation" after going under contract. The Third negotiation may occur if the appraisal doesn't come in at or above selling price.
- Collect Preliminary Title Report from Escrow. This should be sent to you and your client within 3 or 4 days of opening escrow. Review this with your client and escrow officer if necessary. This Preliminary Title Report is also part of the Seller Disclosures that are required to give to the Buyer.
Collect additional documents needed to complete your Opportunity. These can be added as you get them or added just before closing. When you create a Transaction document receipt, you or your client can sign it. I prefer the client to sign so there is no question that they received all documents. You will need two of these if the contract is a “Dual or Limited” transaction. Stay in regular contact with your client, Lender and cooperating Agent. This will facilitate a smooth transaction. It is critical to stay in contact with Escrow as well, especially two or three days before settlement to insure everything is moving forward. Remember it’s Critical to be aware of the contract deadlines! If you are getting close to those dates and you run into issues, make sure you extend those or cancel the contract. This will protect your clients Earnest money. You can use forms 37, 40, or 49 to cancel.
Form 40 is the Contingent Cancellation to use if you’re down to the wire and can’t reach outside Agent. You are responsible for your clients Earnest Money! Make sure it's turned in to the office promptly and that dates are monitored.
Additional things to note:
1. Make sure all your documents are in Command/Opportunities and you have entered your offer and complete the steps in the Commission section!
- If you are Reinstating the contract after a Contingent Cancellation, use form 41
- You must add the contract, sales price and other details in the "Offers and Commissions" section in Command before you can be paid.
- You will need to schedule a settlement time with Title Company and client when loan is ready. Make sure you attend all of your Settlement Appointments unless there is an out of area Settlement. This is always a good time to ask your client for a referral!
- A Final Walk Through should be done within 7 days prior to Settlement date.
- When the file RECORDS, this is considered “CLOSING” the Title Company will send over the final Settlement Statement along with your check. Note: If the Earnest Money amount you collected is more than your commission, we will need to cut a check back to Title before closing for the difference. When your Opportunity is complete, the MCA will put your check in the office folder, or will be auto deposited. This is usually done within 24 hours of office receiving Title check. Remember, you don’t get your commission check until your Opportunity is complete and approved by the Broker.
- Also if you have questions or issues, contact your Broker via www.unitedagentservices.biz. If it’s a serious issue, we can schedule a time to meet to review.