Contingencies to closing
Once you have accepted an offer, there are still several steps to complete before the official closing date and change of ownership. It’s essential to pay close attention to all of the details and timelines to bring the transaction to Closing. Work with your agent to complete these tasks according to schedule. Here is a typical list of contingencies that are most common to Offers in the State of Wisconsin:
- Earnest Money Delivery:
Once there is in accepted Offer in place, the Buyer will deliver their earnest money. Earnest money is held in the listing brokerage trust account until the Closing when it gets applied towards the Buyer’s down payment.
- Pre-Approval Letter or Proof of Funds:
If the Buyer has not already done so, they will submit a pre-approval letter from their lender. If they are paying cash, they will provide a proof of funds statement showing they have sufficient funds for a purchase.
- Condo Disclosure Review:
If working through a condominium sale, Wisconsin law requires that a seller deliver condo disclosure materials within ten days of acceptance of an Offer. A Buyer has five business days to review the documents, during which time they can rescind their Offer to Purchase for any reason. Many buyers will request additional supplements, including financials, meeting minutes, etc. A seller should work with their real estate agent/property manager to make sure they deliver everything required in the Offer.
- Inspection/Testing Contingencies:
If the Buyer included an inspection or testing contingency, they would schedule these. If the inspections/tests reveal any defects, a Buyer might request some repairs or concessions to the Offer. Both parties will have the opportunity to negotiate what defects will be addressed and at whose expense.
- Appraisal: If the Buyer is financing their purchase, their lender will order an appraisal of the property. A licensed real estate appraiser will evaluate the property and review comparable sales in the area to make sure that the value of the property is equal to or higher than the contract price.
- Financing: Once the Buyer receives their final loan approval, they will deliver a loan commitment to the Seller to satisfy their financing contingency.
- Title Commitment: The Seller will typically select the title company that for Closing and pay for the cost of providing title to the new owner. The title company will issue a commitment for title insurance for delivery to the Buyer for review.
- Pre-Closing Walk-Through: Within three days before Closing, the Buyer will have the right to walk through the property to make sure it is in the same condition that it was when they placed the Offer.
- Closing: Between 45 to 60 days from acceptance (or whatever timeframe the parties have negotiated in the Offer), the Closing will take place at the selected Title Company. At the Closing, both parties will sign all of the closing documents for the transfer of ownership and exchange keys.