What Happens Between Going Under Contract and Closing

Bonus Module

You’ve determined your plan to achieve financial independence and that includes investing in real estate.

You’ve evaluated all the different real estate investing strategies and selected one or two strategies that you’ll utilize on your journey toward financial independence.

You learned how to finance buying a property and studied up on how to buy your first investment property.

You’ve analyzed your deal and found a property that will move you forward toward financial independence.

You and your agent got your offer accepted and, congratulations, you’re under contract to buy your property.

Now what?

That’s what we will cover here: what happens between going under contract and when you close on the property.

We will discuss what you will be doing and what your real estate agent will likely be doing to help you get from having your offer accepted to owning the property.

Hopefully you’re reading this before you go under contract because the period called “Contract to Close” is typically a busy time for you and it is ideal to understand the process in advance.

Let’s begin.

Table of Contents

Included below:

• Contracts Vary

• Two Major Components: Due Diligence and Managing Dates and Deadlines

• Due Diligence

• Managing Dates and Deadlines

• Acceptance Deadline

• Immediately After MEC

• Alternative Earnest Money Deadline

• Record Title Deadlines

• Off-Record Title Deadlines

• Title Resolution Deadlines

• Right of First Refusal Deadline

• Association Documents Deadline

• Association Documents Termination Deadline

• Seller’s Property Disclosure Deadline

• Lead-Based Paint Disclosure Deadline

• New Loan Application Deadline

• New Loan Objection Deadline

• Appraisal Deadlines

• New ILC or New Survey Deadline

• New ILC or New Survey Objection Deadline

• New ILC or New Survey Resolution Deadline

• Inspection Objection Deadline

• Inspection Termination Deadline

• Inspection Resolution Deadline

• Property Insurance Objection Deadline

• Due Diligence Documents Deadlines

• Conditional Sale Deadline

• Lead-Based Paint Termination Deadline

• Closing Date

• Possession Deadlines

• No Changing Your Mind: Objections Must Match Their Deadlines

Contracts Vary

While I’ll be covering what typically happens between going under contract and closing, keep in mind that contracts and real estate agents vary by market. Your specific contract, local customs, and unique situation may lead to differences in dates, deadlines, and processes. Always consult your real estate agent or attorney to determine what’s appropriate for your transaction.

Much of what we’ll discuss is based on common contract terms, but real estate contracts can vary quite a bit. Standard contracts differ between markets, and builders, especially in new construction, often use their own unique contracts. Your real estate agent can guide you through what’s typical in your area and help adjust to your situation.

I’ll share what I would typically do as your real estate agent or broker. However, not all agents work the same way. Yours may do more, less, or things differently. Be aware that each transaction is unique, so while I’ll provide guidelines, there’s often room for flexibility and customization based on the specifics of your deal.

Two Major Components: Due Diligence and Managing Dates and Deadlines

The period from when you go under contract to when you close on a property can be broken into two major components: due diligence and managing dates and deadlines.

Due Diligence

Due diligence refers to the research and verification you do to ensure the property meets your expectations and requirements. This is your opportunity to verify everything you assumed when making your offer. It’s the time when you dig into the details to make sure the property is what you thought it was, or if there are any issues you need to address before closing.

Managing Dates and Deadlines

Managing dates and deadlines involves keeping track of all the important milestones defined in your contract. Each deadline is tied to critical steps like submitting your earnest money, conducting inspections, and getting your financing in place.

A great real estate agent or broker will often help you stay on top of these deadlines, but ultimately you are responsible for making sure they’re met. Dates in the contract are not suggestions; they’re legally binding, and missing one can have serious consequences.

What happens if you miss a deadline? If you miss a deadline, you face the consequences. Depending on your contract, you could lose your earnest money or even be sued for specific performance and damages. That’s why it’s vital to manage each deadline closely and ensure nothing slips through the cracks.

Due Diligence

Due diligence is the process of verifying all the assumptions you made about the property before submitting your offer. It’s your opportunity to make sure everything checks out and that the property fits your expectations and needs. This includes inspections, reviewing documents, and confirming details that you couldn’t verify before going under contract.

Here are the types of due diligence you’ll typically be completing: