Selling a Home is a Step by Step Process
Selling a home is a step by step process – getting a signed contract is a great accomplishment, but that’s only half the journey. The typical home sale today involves many steps after the initial contract is accepted to complete a transaction.
Much of what needs to be done before the closing is the responsibility of the real estate agents, notary, and inspectors — the agent’s role is to coordinate those responsibilities, helping to ensure that others do their jobs promptly and correctly and that the closing isn’t jeopardized.
Many steps between contract ratification and closing involve the cooperation of both buyer and seller, and attentive agents on both sides of the transaction will troubleshoot and keep everyone on course.
Home Selling from A to C (Acceptance to Closing)
After acceptance of your Purchase Sale contract here is a list of things to stay on top of to make sure everything goes smoothly with your Puerto Vallarta property purchase.
|1. Select an escrow agent.One of the parties selects an escrow agent. Once the escrow company is agreed upon the escrow contract needs to be executed and sent into escrow usually with 2 forms of photo ID along with a copy of the purchase sale agreement. The escrow agent will collect the necessary documentation from each side and will conduct the closing.||1. Deposit earnest money funds into escrow.Earnest money funds are deposited according to instructions (generally 10%), which include who will hold the deposit, whether interest is to be accrued, and conditions of release. These funds are applied to the down payment at closing.|
|2. Assemble condo or homeowners association (HOA) documents if applicable.Sellers who live in condominiums or in a neighborhood subject to an HOA must provide financial statements and recent reports and minutes to the buyer for review.||2. Make a final loan application if applicable.Decisions about locking in interest rates can be made at any time after a contract is ratified.|
|3. Make sure property taxes are all current.A title search examines all public records to determine any defects in the chain of title; in other words, to confirm that the seller actually owns the property and has the right to transfer ownership.||3. Work With Your Lender to Order the home appraisal.Lenders require an appraisal before committing to a loan. Appraisers compare the features and condition of a home to similar properties to arrive at a dollar figure for its value.|
|4. Request a satisfaction letter from present lender if applicable.Total amount due on any existing mortgages must be provided in advance of settlement.||4. Arrange the property survey if applicable.A survey determines the boundaries of the property, its location, and the size and shape of any buildings on the lot. The survey also identifies any existing easements or encroachments.|
|5. Coordinate home appraisal and inspections.Arrangements for access to the property must be made for a lender’s appraisal and any inspections as specified in the purchase contract.||5. Order inspections.Inspections may include those for home condition, earthquake, and termite infestations. Inspections should be ordered as soon as the contract is ratified so there is time to remedy any problems or renegotiate terms. Agents have established relationships with inspectors and contractors to help ensure that their transactions get priority in busy times.|
|6. Arrange final utility readings and payments.When bills are prepaid, payments will be prorated at settlement between buyer and seller. The HOA will have to issue a “Letter of No Debt” for the payment of all dues and assessments.||6. Verify employment and financial information.Lenders will require buyers to verify employment and financials before committing to the loan to ensure that there have not been significant changes since the process began.|
|7. Deliver to notary’s office.The notary will need copies of documents like your registered trust deed, any Federal Zone concessions, Photo Identification and proof that you are in the country legally. You may also be required to render a coy of your Mexican Tax Payer ID documents, copies of telephone, bank statement, and or electric bill showing the address of your property with your name on it, and a copy of your last property tax (predial) statement and receipt for payment among other documents. Check with your agent about other documents that may be required.||7. Deliver to the notary’s office.In order to start the closing process with the notary you will need to deposit funds with the notary for them to order your foreign investment permit and start your closing process. This deposit is usually 50% of your total closing costs. You will also need to make sure the notary has your new trust bank forms and applications completed with the secondary beneficiaries to your trust described. Photo identification and other documents will also need to be delivered. Check with your agent about which documents will be needed for your purchase.|
|8. Complete repairs.If the seller has agreed to make repairs as a result of a home inspection, these must be completed. If repairs require a building permit, sellers must apply for one as soon as possible, because this could delay closing.||8. Obtain title insurance in applicable.Title insurance can help ensure that title defects will not make a property unsalable in the future. If you plan on getting title insurance start that process right away with your agent so that this does not delay your closing.|
|9. Letter of Instruction.If your property is held in a trust you must deliver to your trust bank a letter instructing that your trust bank transfer the property to the new buyer’s. The trust deed is the document by which the owner transfers title to the property.||9. Secure a loan commitment if applicable.Lender notifies escrow agent of commitment and confirms closing date.|
|10. Arrange for payment of capital gains taxes.Review your capital gains tax liability with the notary’s office so that you can be prepared at closing to pay the tax. This expense is the responsibility of the seller. You will also need to prepare the real estate fees for payment at closing which is usually done with the escrow disbursement statement.||10. Transfer utility accounts.Utilities should be transferred into the buyers’ names as of the date of settlement. Your agent can prepare letters for the Seller’s signatures to transfer utilities.|
|11. Review the disbursement statement.Funds will be transferred at closing in the amounts and to the accounts specified in the disbursement statement. Make sure all account information is correct and that the amounts are correct.||11. Complete the final walkthrough.Buyers walk through the property with their agent shortly before closing to ensure that the property is being delivered in the condition agreed to in the contract.|
Time Estimates for Delays
When things go wrong, closing can easily fall behind. Here’s how much time to expect on particular delays:
- Buyer submits incorrect information to lender.
- Source of down payment changes.
- Lender fails to notify parties about missing documents.
- Principals leave town without signing all necessary papers and don’t leave a power of attorney with a representative.
- Move-out date changes.
- Holidays, especially Christmas and New Years, that make it difficult to get documents prepared in time.
- Lender decides at the last minute they don’t approve of the borrower or the property.
- Lender raises interest rates.
- Lender requires last minute reappraisal or repairs.
- Appraisal too low.
Timothy Real Estate Group – An innovative company setting new standards in Real Estate sales and services has the most professional and experienced Realtors in the Puerto Vallarta area who understand the intricacies of Mexican Real Estate ownership, the local market, Puerto Vallarta property codes and regulations and financing. The Timothy Group uses that knowledge to provide a sound analysis on every aspect of property ownership. Timothy Real Estate Group is known for professionalism and experience and they bring this to every transaction they work on for the benefit of Real Estate investors and developers alike. Ask about our Real Estate Listings