What does “Conditional Approval” and “Clear to Close” Mean?
A Conditional Approval is like a promissory note from the mortgage lender that they will approve the loan/issue a Clear-to-Close if the borrower/buyer can clear all of the conditions that the mortgage underwriter is requesting. The Conditional Approval guarantees the loan will be cleared to close only if the conditions are met. Common conditions include providing updated copies of bank statements, verifying employment, and providing proof of mortgage and/or homeowners insurance.
A Clear to Close is the “Final Approval” and is issued when the mortgage loan has been completely approved and the mortgage lender is ready to fund the loan.
Once you have an accepted offer/signed purchase agreement, you will need to contact your association’s management company to order the Common Interest Community (CIC)/association docs for the buyer. There is somewhat of an urgency in ordering these docs as it can take up to 7-10 days to receive the docs from the association and once the buyer has received the docs from you, he/she has a ten-day rescission period to review them. The CIC Docs listed below are the docs that the seller is required to furnish the buyer with.
If you are purchasing a condo, townhome, or home in an association, you will receive Common Interest Community (CIC)/association docs from the seller. It can take up to 7-10 days for the seller to receive these docs once they have ordered them from the association. You will have a ten-day rescission period to review the docs once they have been delivered to you. The CIC Docs listed below are the docs that the seller is required to furnish the buyer with.
- Declaration of the Association
- Articles of Incorporation
- Rules and Regulations
- Any Amendments or Supplemental Declarations (if applicable)
- Resale Disclosure Certificate (current within 90 days)
- Balance Sheet of the Association (current within 90 days)
- Projected Annual Budget of the Association
If you would like additional information about CICs and disclosure requirements please refer to the Common Interest Community Addendum in the Purchase Agreement. For additional information see the Attorney General’s Information on CICs.
What are they? Do I need one? How do I prepare my home?
Several Minnesota cities require homes to have a Truth-in-Sale-of-Housing (TISH) Inspection prior to being offered for sale. In some cities these inspections/evaluations are also known as Point-of-Sale Inspections (POS), Time-of-Sale Inspections, or Code-Compliance Evaluations. A TISH/Point-of-Sale evaluation differs from a buyer’s inspection and it isn’t as thorough. The focus of the TISH inspection is on risks to life and/or health. The inspection report will list items as either a required fix or a recommended fix.
Truth in Housing Inspectors
The two licensed Truth-in-Housing Inspectors below have repeatedly demonstrated to us that they provide quality, reputable services; however, you are free to use any Truth in Housing inspector that you would like. You will want to check your city’s website to make sure your chosen inspector is on the list of inspectors licensed for your city. Once you have decided on an inspector, let us know the name of the inspector as well as the date and time of the inspection.
Bovee Inspection Services Inc
Scheunemann Home Inspections
A TISH Inspection vs. A Buyer’s Inspection
A TISH Inspection:
- Is required by certain cities.
- Is set up and paid for by the seller.
- Is required prior to offering the home for sale.
- Focuses on risks to health and life.
- Is a condensed inspection that typically takes about 1 – 1 ½ hours.
- Has inspection standards & requirements, set by each city, that the licensed evaluator must meet.
- Report often includes both required repairs and recommended repairs.
A Buyer’s Inspection:
- Is optional and some buyers decline the option to have an inspection performed.
- Is typically set up and paid for by the buyer.
- Is typically performed after the buyer has an accepted offer on a home.
- Is thorough and typically takes about 3 – 4 hours to complete.
Required in Twelve Twin Cities Metro Cities
A Point-of-Sale Inspection and report from a licensed evaluator is required in at least twelve Twin Cities Metro cities, including:
Inflow and Infiltration (I/I) Compliance Program
The Inflow and Infiltration (I/I) Compliance Program is being required by the Metropolitan Council for both West St. Paul and Golden Valley as a result of excessive clear water entering the sanitary sewer system. Both cities require all properties to have a sanitary sewer inspection prior to being advertised/offered for sale.
The City of Golden Valley
The City of West St. Paul
Cities that no Longer Require a POS
Point-of-Sale Inspections are no longer required in Brooklyn Park, Crystal, and Osseo.
Avoid the Most Common Point-of-Sale Repairs
How to Prepare Your Home for a Truth in Sale of Housing (TISH) Inspection
There are many fixes/repairs that are quick and inexpensive and could be done prior to a point-of-sale or home inspection. Quite often, fixes that typically cost a few dollars may be left unchecked only to get quite costly later, during negotiations.
Here are the most common items that are sited on a Point-of-Sale Inspection.
THE THREE MOST COMMON REPAIR ITEMS
- Do outdoor faucets have backflow preventers or vacuum breakers?
To check for leaks, the WCCO report suggests filling up a sink or tub, then pulling the stopper out and watching the pipes to make sure you don’t have any plumbing issues. You should do this for all sinks and tubs, including laundry sinks or industrial tubs. If a pipe is leaking just a little bit, you may be able to fix it with a basic wrench tightening.
Additional Required & Recommended Repairs
Some additional items that are common include:
- Electrical Items
- Gas PipingFurnace/Boilers
- Gas Appliance Venting
- Water Heaters
- Gas Clothes Dryers
- Fire Separation at Garage
You will find more information at the city links above.
Here are lists of common repair items for Minneapolis:
TITLE WORK/TITLE COMPANY
CHOOSING A TITLE COMPANY
If you have indicated that you would like us to arrange for the closing, we will do so. If you have indicated that you would like to arrange for the closing, please do so as soon as possible. We will need their contact information. Please let us know what title company or attorney (including contact info) you would like to use, ASAP, so that we can get the purchase agreement and required documents over to them and they can start working on the file.
WE WILL COORDINATE THE PROCESS
We will send the purchase agreement and any amendments and required documents, as we receive them, to the title company.
When the closing date gets closer, the closing/title company will contact you. They will need to get additional info from you and will let you know what you should bring to the closing.
We work with the following two title companies quite often. These reputable and experienced closers have repeatedly demonstrated that they provide high-quality title and closing services. We know that we don’t need to worry about them being thorough and on-time. They both offer many closing locations to choose from.
You are free to choose any settlement company/agent of your choice and are not required to use either company listed below.
LIST OF TITLE COMPANIES
Senior Executive Closer
Liberty Title, Inc
12301 Central Avenue NE #202
Blaine, MN 55434
MINNESOTA OR WISCONSIN TRANSACTIONS
Partner’s Title, LLC
659 Bielenberg Drive, Suite 100
Woodbury, MN 55125
The Process of Buying Your Home
Step Number 5: Making an Offer on a Home
Once you have found the “right home”, it’s time to make an offer. Ryan will help you decide on the price, terms, and contingencies. You can’t rely solely on the list price of the home. Ryan will use data available on the MLS to look at homes in the area that are active, sold, and expired as well as those with similar features to determine what the home is worth. Keep in mind, if the home is under priced to encourage multiple offers, or if there is a lot of competition for the home, you may need to offer more than the listed price for your offer to be accepted. Ryan will guide you in this decision.
Once we have written up the offer and you have signed it, Ryan will present it to the listing agent (who will then present it to the seller). You will need to include a copy of the earnest money check with the offer. Earnest money is a deposit that is made on a property that shows the buyer is serious about purchasing a property. The earnest money is held in a trust account until the closing date when it is then applied toward the buyer’s down payment. If the transaction cancels/falls through, it is possible that you, the buyer, could lose the earnest money deposit. Typically, the party not responsible for cancelling the offer will be awarded the deposit. This is one of those times when having an experienced agent/team can really make a difference. We watch the contingency deadlines closely so that if the contract needs to be cancelled, it is done before the appropriate deadline resulting in a refund to the buyer.
The seller may accept the offer as written or come back with a counteroffer, changing the price and/or terms. Ryan has extensive knowledge and experience in negotiating offers and will negotiate your terms (on your behalf) with the listing agent (seller). The offer becomes a legally binding contract/purchase agreement on the date and time that the last party signs (once the seller accepts/signs the offer, or both you and the seller have accepted/signed the last/final counteroffer) and then delivers the signed contract to the other party. This is known as the Final Acceptance Date.
Once you are under contract, you will need to mail/deliver the earnest money to the listing agent. We will begin coordinating your entire contract-to-close process. We facilitate and coordinate the work of all the professionals involved in your purchase (listing agent, lender, inspectors, appraiser, contractors/builders, title companies…). It is important to stay in contact with your lender and furnish them with all requested items in a timely manner. We will take care of the paperwork and deadlines, solve problems that arise, and let you know when something is needed from you. This results in a smooth, hassle-free transaction for you, our “Platinum” client.