I got a great question from a client today. She has her current house in Eureka in escrow, and is looking for a new house in Visalia. "When do I start packing?" she asked.
A typical, 30 day escrow can be divided into 4 big chunks. During week 1, the sellers deliver all of their disclosures to the buyers, and the buyers arrange to have all of their inspections done. During the second week, the buyer usually reviews the disclosures, their inspection reports, the preliminary title report (prelim), and the natural hazard disclosure (NHD).
These first 2 weeks are a great time for the sellers to go through their home and clean. This is great time for sellers to get rid of junk, of stuff they aren't going to keep anyway. If a sale is going to fall through, it will most likely fall through in the first couple of weeks. If the seller is cleaning, throwing junk away that they weren't going to keep anyway, there's no lost effort. Sure, we'll grieve and cry and curse when the deal falls apart, but that's the extent of the "loss." They don't have to unpack their clothes and cooking utensils and furniture so they can live for the next few months while their house is back on the market.
After these first 2 weeks, after the buyers have done all of their inspections and seen all of the disclosures, and after they have released their inspection contingency, they are pretty much committed. During week 3 they sign their escrow instructions, and during week 4 they sign their loan documents. And yes, the deal can still fall apart, if the lender fails to approve and fund the loan. However, this is far less likely to happen, and there is very little the seller can do to protect himself anyway.
These last 2 weeks, then, after the buyer has released his inspection contingency and not before, is when the seller wants to put packing and moving into high gear.
Saturday, January 16, 2010
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