In the Colorado Contract to Buy and Sell Real Estate there is a section with all of your Dates + Deadlines. This is probably one of the most cumbersome sections while under contract on a home because it is what guides the Lender, Title, Agents, Seller + Buyer through all pertinent steps of the transaction. These dates are important to each party for different reasons so here are some of the highlights:
- Lender: The lender has many people that work on your file and these dates and deadlines keep the file moving (typically) seamlessly from the processor through underwriting then to the closer.
- Title: The dates notify the Title company how long they have to get your Title Commitment prepared, HOA docs, and it provides them with the closing date.
- Agents: The real estate agents use these dates to coordinate with all parties for negotiations and to make sure that the transaction is smoothly moving forward.
- Seller: The listing agent and the sellers watch the dates very carefully as the inspection objection could directly impact the deal, as well as HOA issues, Appraisal, + Loan Objection. Not to mention the buyer could terminate the deal at any deadline.
- Buyer: These deadlines are helpful to know how long the seller has to accept your offer, if accepted when to deliver earnest money, when you need to have your inspection completed and when you have to review all title + HOA paperwork and work with your lender to supply all necessary docs. These dates also represent opportunities for you to terminate the contract and still get your earnest money back.
Dates and Deadlines section of the contract:
We reached out to Porsha Ridl (NMLS # 1697759), a prior REALTOR and current Loan officer with Envoy Mortgage to shed some more light on the importance of the dates for you + your lender. This is what she had to say:
Title & Assoc docs
Surprisingly the title and association document deadline is a very important deadline for the lender. These documents are important because it can affect your loan. Of course we look to make sure that the title for your property is clean, and can be transferred to you, but we also receive important information for costs that are on your loan estimate. In Colorado, the seller typically pay for title insurance, however, above and beyond that, most lenders require lender’s coverage; which is a charge you as the buyer will need to pay for. There are also closing fees that are charged by the title company to assist in the closing of the property, as well as filing fees from the county. It is extremely important that we receive these numbers early so that you can get a true picture of the cost of your new home.
Association documents are also important. We automatically make sure that the HOA is healthy, and that you will not be negatively affected if you purchase in a particular community. One of the most important items we check for is that they are financially sounds, and can continue to maintain the common area, buildings, pools or clubhouses, or any other amenity that positively affects the value of your home. HOA documents become increasingly important when purchasing a condo in a building. When you are purchasing a condo in a building the lender likes to confirm that the majority of the property is occupied by owners, not renters. The lender typically check for both these items to confirm that you can comply with traditional underwriting requirements.
Both of these deadlines are a very important part of the transaction, and it is also important that they occur towards the beginning of the transaction. When done early we can address or assist in fixing any issues that come up, and have a seamless and on time closing.
The loan application is probably one of the trickiest deadlines in the contract. Often times, you and your agent think that this has already been completed because you have been pre-approved. However, that is not technically true. Per government guidelines, you cannot have a full application until a property address has been identified. Although it is a bit tricky, it is actually a really easy step. Once the application is completed, we will then send you the disclosures. The disclosures will explain to you in detail how your loan works. It will tell you what your interest rate is (your interest rate can change up until you lock it), how much you will pay over the life of the loan, what your payments will be, what your down payment will be, and what your closing costs are. Please remember, these are estimated numbers at the beginning until we have all the information from the other parties involved.
The loan objection deadline in Colorado is often used as a pseudo loan approval deadline. Many agents representing the buyer will try and set this deadline as close to the closing as they can. That way, if anything changes, you as the buyer can still get your earnest money back. Technically, the loan objection is a deadline for you to decide whether you like the loan you are receiving or not.
Unless something drastically changes, or you as the borrower do not provide the paperwork we request, we will have your loan through underwriting and ready to close before this deadline. Our goal is to have the closing disclosures over to the title company and ready to go 10 days before closing. Making this deadline a slam dunk for us to acheive. We personally like to get things buttoned up early so that you can rest easy and focus on the fun part of moving….or packing.
The appraisal deadline is important when you are dealing with a conventional loan product. Majority of the time we will require that an appraisal in done on the home to confirm the value. Occasionally we won't require an appraisal if the borrower is putting a substantial amount of money down. The lender will order the appraisal on the buyer’s behalf, and the timing is important. Ideally the appraiser will visit the property soon after the inspection resolution is complete. Not only does the appraiser need time to prepare the report, our underwriting department must look over the appraisal as well to make sure there aren’t any inconsistencies or errors. So it is imperative that you allow the lender to order the appraisal when they and the agent advise you to so that your earnest money is not in Jeopardy. Once the appraisal is reviewed and approved we can move forward in getting your loan to the closing table.
VA & FHA loans do not have a deadline associated with them because the loan product does not allow for it. This is a huge benefit to the buyer, but sometimes a deterrent for the seller. It is also important to note that a FHA or VA appraisal has more requirements than a conventional appraisal does, and may require the seller to fix a few items before closing. If the appraiser does note any issues, the items must be fixed before closing, and they are also required to check to make sure they have been completed before closing.
At the end of the day these are guidelines for all parties to be able to communicate about how to get the deal done in a timely manner that works for everyone. If you have any questions or concerns about this part of the Real Estate transaction please don’t hesitate to reach out! Krystal@westandmainhomes.com