February 2, 2020 at 2:17 pm #65247
Can anyone tell me what the difference is between an offer to purchase, and the purchase and sale. NACA‘s timeline begins with purchase and sale, but many of the steps you have to take in that timeline have already started with me with my offer to purchase. I’m just trying to figure out when I should be applying for credit access. Is that now? Or not until the purchase and sale is signed, which for us in Massachusetts will be after inspection. At least that’s my understanding.February 2, 2020 at 3:06 pm #65248
The purchase and sale refers to your ratified (buyer and seller agreed to all terms and signed) contract. The clock on the contract and thus the naca closing timeline doesn’t start until your seller signs.
You apply for credit access as soon as you submit your contract to your MC. In most cases they will schedule a credit access appointment for you. If you don’t hear anything within a day then you can call the local office to schedule one yourself. Since the criteria for credit access is making sure you can afford that specific house having a ratified contract is a prerequisite.
You need to double check with your agent on signing after the inspection for a few reasons. Most contracts have a conditional agreement clause pending the inspection results (naca might require this meaning you might be required to sign prior to inspection). With naca you have 10 days from the date your contract is ratified to submit the inspection results to the HAND department. Waiting until after the inspection can put you in a time crunch especially since credit access is done concurrently and you often need every bit of the 45 to 60 days to close. Waiting till after might put you in the 60 to 90 day range.February 2, 2020 at 4:11 pm #65249
Thanks @Nelsont. The seller and I have both signed the offer, with the contingencies being inspection and appraisal at or above offer. So my earnest $ deposit has been delivered, inspection is already scheduled, I already have insurance, etc. So for me it feels as if the clock has started ticking. But we’re not at P&S yet.
If I understand you correctly, despite us having satisfied some of the items already, the timeline in the Purchase Workbook hasn’t started yet.
Thank you for clarifying.February 2, 2020 at 4:35 pm #65250
No. The purchase and sale agreement is the contract. It’s the more technically correct term as it a contract between specifically a buyer and seller as opposed to say a contract between employee and employer.
Same goes for closing. Settlement is the technically correct term as all 3 parties involved including the bank are legally settling the proposal but closing is used interchangeably for “closing the deal”.
Your timeline started the day your seller signed the contract. Assuming you’ve submitted it and scheduled everything you are on track. Agian check to make sure you are allowed to follow through with the inspection prior to having a ratified contract. Good luck!
February 2, 2020 at 4:40 pm #65253
- This reply was modified 10 months ago by Nelsont.
Okay, now I’m confused again. How can we ratify a contract (I the buyer agree to pay for this repair, you the seller agree to pay for this other repair) without having had the inspection?February 2, 2020 at 4:46 pm #65255
That’s why the contract is conditional. You ratify it meaning you agree to the terms. The clause in the contract allows the buyer out of the contract if the inspection is unsatisfactory or the seller and buyer cannot agree on repair terms. It also protects you by temporarily taking the off the market and prohibiting the seller from entertaining other offers while you get the house inspected. Any agreement on repairs is not necessary to add to the contract and it can always go in as an amendment if you want.
Did you get your property specific letter from your MC?
February 2, 2020 at 4:51 pm #65257
- This reply was modified 10 months ago by Nelsont.
Yes. We got the PSL, made the offer, all parties signed, and I thought that meant we should move on to inspection. Are you saying we should be moving to P&S first, then inspection etc?February 2, 2020 at 5:06 pm #65259
You are confusing p&s.
P&s = contract. Same thing.
You are doing things right.April 16, 2020 at 6:11 pm #67044
@MovingInMass: Are you buying a house in MA? Which home inspector did you use?
@Nelsont: I am also a little bit confused about the starting point. Per my agent, after the offer is accepted (signed offer received from the seller) we schedule an inspection. After receiving the inspection report we sign P&S. Is this the right order?
Iif possible can you please direct me what are the steps.
AlApril 16, 2020 at 6:31 pm #67045
Massachusetts state regulations might be different from much of the rest of the country. The way I am familiar with is the buyer is not allowed to do anything outside of request a showing of the house prior to signing the contract.
The buyer and seller negotiate financial terms and logistics verbally through a mediator and once agreed both sign the contract. The contract includes a clause that essentially says the buyer is allowed to back out of the contract and receive the emd returned in full if the inspection is performed within (usually 10 days or so) and is either unsatisfactory or repair financing cannot be agreed upon between the buyer and seller.
I think Massachusetts puts more emphasis on the contract being unamendable meaning you inspect first and have less legal leverage to back out.
April 16, 2020 at 6:41 pm #67047
- This reply was modified 7 months, 2 weeks ago by Nelsont.
Thank you for the quick response @Nelsont.
You are right. My offer letter says we inspect the house and then we sign P&S. I guess we will move forward with the inspection.
AlApril 19, 2020 at 9:10 pm #67128
Sorry for taking a bit to get back to you. Massachusetts is very different, apparently. In addition to the “offer to purchase” we use to start the process (where everyone else seems to go straight to “purchase and sale”), there are also differences in who writes the P&S (lawyer for us, RE agent for everyone else), and where the “riders” and disclosures are located (P&S for us, addenda and attached riders for everyone else).
Do you have a NACA RE agent or non-NACA?
Hope its going well!
MiMMay 4, 2020 at 1:46 pm #67603
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