My Offer on a House Was Accepted, Now What?

Having an offer accepted on a new home marks a significant milestone in the journey toward homeownership. This acceptance transitions the process from searching to a structured series of steps that require careful attention. While the excitement of securing a property is immense, navigating the subsequent stages can feel complex. This guide aims to clarify the procedures that follow offer acceptance, ensuring a clearer path to successfully acquiring your new home.

Formalizing the Agreement and Initial Deposits

After an offer is accepted, the first step is formalizing the agreement through a legally binding purchase agreement. This document, also known as a sales contract, outlines all the terms and conditions of the transaction between the buyer and seller. Both parties sign this contract, which serves as the framework for the entire process. Key elements detailed in this agreement include the final purchase price, the agreed-upon closing date, and various contingencies.

Contingencies are conditions that must be met for the sale to proceed, providing protection for the buyer. Common contingencies include inspection, financing, and appraisal. For example, a financing contingency allows the buyer to withdraw and recover earnest money if mortgage approval cannot be secured. An appraisal contingency ensures the home’s appraised value aligns with the purchase price, offering an exit if the appraisal is too low.

Following the contract signing, the buyer typically submits an earnest money deposit. This deposit demonstrates the buyer’s serious intent to purchase. It is usually paid within one to three days via wire transfer or certified check. The earnest money is held by a neutral third party, such as an escrow agent, title company, or real estate broker’s trust account, and is usually applied toward the down payment or closing costs at settlement.

In some regions, an attorney review period follows contract signing. This period, often three to five business days, allows attorneys to review and modify contract terms. During this time, an attorney can identify and address any legal issues or propose changes to protect their client’s interests. Either party may withdraw from the contract without penalty if mutually agreeable terms are not reached.

Property Investigations and Contingency Management

After the purchase agreement is executed, the buyer focuses on due diligence, primarily involving property investigations. A professional home inspection is typically scheduled within 7 to 10 days of offer acceptance. This visual examination assesses accessible areas and components, including structural elements, electrical systems, plumbing, and HVAC systems. Attending the inspection with the inspector is advisable to gain a firsthand understanding of the property’s condition.

Beyond a general home inspection, specialized inspections may be necessary based on the property’s location or characteristics. These can include:
Tests for radon
Mold assessments
Pest inspections
Sewer scope inspections

These additional assessments provide a more comprehensive view of potential environmental hazards or hidden issues. Findings from all inspections are compiled into detailed reports, which buyers should review carefully.

Interpreting the inspection report involves distinguishing between significant defects, like structural concerns or major system failures, and minor maintenance issues. Not every item on an inspection report warrants a repair request, as some are routine upkeep. Leveraging the inspection contingency, buyers can negotiate with the seller based on significant findings. This negotiation might involve requesting specific repairs, offering a credit to the buyer at closing, or a reduction in the purchase price.

The negotiation process requires clear communication, often facilitated by real estate agents. Sellers are not always obligated to make repairs, but they might agree to address major concerns to keep the sale on track. If an agreement cannot be reached, and the contingency allows, the buyer has the option to walk away from the contract, often retaining their earnest money deposit. This phase is important for ensuring the buyer is fully informed about the property’s condition before moving forward.

Finalizing Financing and Title

Securing the mortgage and ensuring a clear title are parallel processes that progress after initial contract execution. A key step in finalizing financing is the home appraisal, typically ordered by the lender. The appraisal determines the property’s market value to confirm it adequately secures the loan amount. If the appraisal is lower than the agreed-upon purchase price, it can present a challenge, as lenders usually do not finance more than the appraised value.

If an appraisal contingency is in place, buyers have several options: renegotiate the purchase price with the seller, pay the difference in cash between the appraised value and the purchase price, or withdraw from the contract. Following the appraisal, the mortgage application moves into the underwriting phase. During underwriting, the lender thoroughly verifies the buyer’s financial information, requiring updated documents such as recent pay stubs, bank statements, and tax returns. This process ensures the buyer’s financial stability and ability to repay the loan.

Upon successful underwriting, the lender issues a loan commitment letter, often called conditional approval. This document signifies the lender’s promise to fund the loan, outlining the terms and conditions. It typically includes conditions that must be met before final funding, such as proof of homeowners insurance or no major changes to the buyer’s financial situation. This commitment indicates financing is secured, moving the buyer closer to closing.

Concurrently, a title search is conducted to ensure there are no liens, encumbrances, or ownership disputes affecting the property. A title company performs this search, examining public records to verify the seller’s legal ownership and identify any claims against the property. To protect both the buyer and the lender from future claims against the property’s title, title insurance is purchased. Buyers receive a preliminary Closing Disclosure (CD) from their lender, detailing loan terms, estimated monthly payments, and an itemized list of all closing costs and fees. Reviewing this document carefully is important to understand the financial aspects before the final closing.

The Path to Closing Day

As closing day approaches, several final procedural steps are necessary to ensure a smooth transfer of ownership. The final walkthrough, typically conducted within 24 hours of closing, allows the buyer to verify the property is in the agreed-upon condition. This includes confirming any negotiated repairs are completed and the seller has vacated the premises, leaving no unwanted items. It serves as the buyer’s last opportunity to inspect the home before the transaction is finalized.

Buyers must receive the final Closing Disclosure (CD) at least three business days before the scheduled closing date, a federal requirement under the TILA-RESPA Integrated Disclosure (TRID) rule. This document provides a comprehensive summary of all financial aspects of the transaction, including exact loan terms, final closing costs, and credits. Review the final CD meticulously, comparing it against the preliminary version to ensure accuracy and identify any discrepancies before signing.

Arranging utilities and homeowners insurance is another important task. Buyers should contact utility providers for electricity, water, gas, and internet services to ensure they are transferred into their name, with service beginning on the closing date. Securing a homeowners insurance policy is mandatory, as lenders require proof of coverage to protect their investment and the buyer’s equity in the property. The policy must be in effect by closing day.

Transferring the remaining funds needed for closing, including the down payment and closing costs, is a significant financial action. Funds are typically transferred via wire transfer, often preferred by title companies for security and speed, or a certified check for smaller amounts. Buyers must verify wire instructions directly with the title company or closing attorney to prevent fraud. It is advisable to initiate wire transfers at least one to two business days before closing to account for processing times.

Attending the closing appointment involves signing numerous legal documents that officially transfer the property title. Buyers should bring a valid government-issued photo identification, such as a driver’s license or passport, and their checkbook for any last-minute adjustments. Once all documents are signed and funds are disbursed, the keys are typically handed over, marking the official conclusion of the home purchase.