Officially under contract!  The due diligence period is a critical time with many moving parts.  Below is a step-by-step guide to everything that happens between now and closing day, including timelines and who's responsible for each task.  Questions?  Reach out to rps@bhgheritage.com.

Contract Signed (Effective Date)

• Who: Buyer and Seller

• What: All parties have signed the Offer to Purchase and it becomes a legally binding agreement.

Initial Week after Signature

Deliver Due Diligence Fee

• Who: Buyer

• What: Deliver the due diligence fee (non-refundable) directly to the seller as specified in the contract.

• Timeframe: ASAP (must be delivered on the effective date unless contract signed after regular business hours)

Deliver Earnest Money Deposit

• Who: Buyer

• What: Deliver the earnest money deposit to the escrow agent (the lawyer being used for the closing) as specified in the contract.

• Timeframe: Within 2-3 business days of the Effective Date (check the contract for the exact deadline).

Loan Processing & Underwriting

• Who: Buyer and Lender

• What: The buyer provides all necessary documentation and signed contract to the lender, and the lender processes the loan application and underwrites the loan.

• Timeframe: Ongoing throughout the transaction, needs to be completed during due diligence period for optimal flow.

Appraisal

• Who: Lender (if applicable)

• What: The lender orders an appraisal to determine the fair market value of the property.

• Timeframe: ASAP after contract signature to allow time to review during due diligence period.

Schedule Inspections

• Who: Buyer

• What: Schedule all necessary inspections, including:

  • General Home Inspection

  • Pest Inspection

  • Radon Testing (recommended in NC)

  • Septic Inspection (if applicable)

  • Other specialized inspections (well water, chimney, etc.)

• Timeframe: ASAP, ideally within the first week of the due diligence period.

During Due Diligence

Order Title Insurance & Search

• Who: Buyer/Lawyer being used for the closing

• What: Lawyer’s office conducts a title search to ensure clear ownership and identify any liens or encumbrances on the property. Title insurance policy ordered.

• Timeframe: Within a week of the Effective Date.

 Review Inspection Reports & Negotiate Repairs (if needed)

• Who: Buyer and Seller (with their respective agents)

• What: Carefully review inspection reports and negotiate any necessary repairs or credits based on the findings.

• Timeframe: Within the due diligence period.

 Review Appraisal

• Who: Buyer and Buyer’s Agent

• What: Compare the appraised value to the purchase price in the contract.  If the appraisal is lower than the purchase price, discuss options.

• Timeframe: Within the due diligence period (as soon as the appraisal report is received).

Final Steps

Prepare for Utility Transfer

• Who: Buyer - ultimately responsible for initiating the transfer of utilities into their name.

• What: Identify which companies currently provide service to the property (electricity, gas, water, sewer, trash, internet, cable...etc.).  Buyer will need to contact each utility company to set up new accounts or transfer existing service.

• Timeframe: Start early.  It is generally recommended to start these conversations a couple of weeks before the closing date to avoid any potential delays.  Get on their radar and communicate often to ensure all goes smoothly on closing day.

Getting “Clear to Close”

• Who: Lender provides

• What: The lender issues a "Clear to Close" after final loan approval, signifying that all conditions have been met (appraisal, underwriting, etc.) and the loan is ready to fund.  The lender sends the loan package to the closing attorney.

• Timeframe: Typically a few days to a week before the scheduled closing date.

Final Walk-Through

• Who: Buyer (with their agent)

• What: Conduct a final walk-through of the property to ensure it's in the agreed-upon condition and that any agreed-upon repairs have been completed.

• Timeframe: 1-2 days before closing.

Closing

• Who: Buyer, Seller, Closing Attorney (in NC)

• What: All parties meet at the closing to sign the final documents, including the deed, mortgage, and closing disclosures. Funds are disbursed, and the deed is recorded.

• Timeframe: As agreed upon in the contract.

Post-Closing

• Who: Buyer

• What:

  • Receive keys and take possession of the property.

  • Transfer utilities.

  • Ensure homeowner's insurance is in place.

• Timeframe: After deed is recorded.