My House Offer Was Accepted, Now What?

Congratulations on having your house offer accepted. This is a significant milestone toward homeownership. An accepted offer marks the beginning of a structured process for property ownership transfer. Navigating these stages effectively brings you closer to receiving the keys to your new residence.

Securing the Purchase Agreement and Earnest Money

Your accepted offer initiates the formalization of the transaction through a signed purchase agreement, also known as a sales contract. This legally binding document outlines the terms and conditions agreed upon by the buyer and seller, detailing the purchase price, property description, contingencies, and timelines.

Earnest money, a financial deposit, accompanies the purchase agreement, demonstrating your serious intent to buy. This commitment assures the seller you are financially capable and interested in completing the transaction. Earnest money ranges from 1% to 3% of the home’s purchase price, varying based on market conditions and local customs.

Once deposited, earnest money is held in an escrow account, managed by a title company, attorney, or real estate broker. This secure holding protects funds until closing, when they are applied toward your down payment or closing costs. If the transaction falls through due to a contingency (e.g., failed inspection, inability to secure financing), the earnest money is returned to the buyer.

Property Due Diligence and Valuation

After the purchase agreement is secured, due diligence involves evaluating the property’s condition and market value. A home inspection, conducted by a qualified inspector, examines the property’s structural integrity and major systems, including the roof, foundation, electrical, plumbing, and HVAC systems for issues.

The inspector provides a detailed report. Based on findings, you may request repairs, negotiate a credit at closing, or withdraw your offer if significant problems are discovered, depending on contract contingencies. Understanding the report is important for informed choices.

Simultaneously, your lender arranges a home appraisal, an independent assessment of the property’s fair market value. A licensed appraiser conducts this evaluation, considering the home’s condition, features, and recent sales of comparable properties. The appraisal ensures the loan amount does not exceed the property’s worth, protecting the lender’s investment.

The appraisal value directly impacts your mortgage. If the appraisal is lower than the purchase price, it may affect the amount the lender finances. You might need to cover the difference in cash, renegotiate the price with the seller, or terminate the contract if an appraisal contingency is in place.

Finalizing Your Mortgage

Securing your mortgage begins after your offer is accepted, moving beyond pre-approval. This phase involves mortgage underwriting, where your lender reviews your financial standing to assess lending risk. This evaluation confirms your ability to repay the loan, scrutinizing income, assets, debts, and credit history.

To complete this assessment, provide financial documents to your lender. These include recent pay stubs, W-2 forms, and federal tax returns from the past two years. Lenders also require recent bank statements and investment account statements to verify funds for the down payment and closing costs. If any portion of your down payment is a gift, a gift letter may be required.

After the underwriter reviews documentation, your loan may receive conditional approval. The lender is prepared to approve your mortgage, provided certain conditions are met. These often involve clarifications on financial transactions, updated employment verification, or additional property documentation.

Responding promptly and accurately to underwriter requests is important to keep the loan process moving. Delays in providing requested information can postpone your closing date and jeopardize loan approval. Timely cooperation ensures financing is in place as you approach the final stages of home buying.

Pre-Closing Procedures

As the closing date approaches, pre-closing procedures ensure a clear transfer of ownership and finalize financial arrangements. A title search examines public records, verifying ownership and identifying any liens, encumbrances, or disputes affecting the title. This ensures the seller has the legal right to transfer ownership and you will receive a clear title.

Following the title search, title insurance is purchased to protect the buyer and lender from future claims against the property’s title. This insurance safeguards against unforeseen issues like errors in public records, forged documents, or undisclosed heirs. It provides financial protection against losses due to title defects.

The Closing Disclosure (CD) is a financial document detailing the final costs and terms of your mortgage loan. Federal regulations require lenders to provide this document at least three business days before your scheduled closing date. Review the CD, comparing it to your initial Loan Estimate, to ensure all fees, interest rates, and loan terms are accurate and align with your expectations.

The final walk-through, conducted within 24 to 48 hours of closing, allows you to confirm the property is in the agreed-upon condition. Check that any agreed-upon repairs have been completed, all fixtures and personal property included in the sale are present, and all systems (e.g., plumbing, electrical) are functional and the home is clean and ready for occupancy.

The Closing Process

The closing process marks the culmination of your home-buying journey, where property ownership officially transfers from the seller to you. This event takes place at the office of a title company, attorney, or escrow agent, serving as a neutral third party. Attendees include the buyer, seller (often not physically present), real estate agents, and the closing agent.

During the closing meeting, legal documents are reviewed and signed by all parties. For the buyer, these include the promissory note (your promise to repay the loan) and the mortgage or deed of trust (giving the lender a claim against the property if you fail to make payments). You also sign the deed, which officially transfers ownership, and various affidavits and disclosures confirming transaction details.

The final exchange of funds occurs at closing, with your down payment and closing costs transferred via certified check or wire transfer to the closing agent. The lender’s funds are also disbursed, completing the financial aspects of the purchase. Once documents are signed and funds exchanged, the deed is recorded with the local government, making the transfer of ownership public record.

Upon completion of these steps, you receive the keys to your new home. This moment signifies the official end of the purchasing process and the beginning of homeownership. All preparatory work, from inspections to mortgage finalization, culminates in this final, formal transfer.