What Happens After a House Offer Is Accepted?

When a home offer is accepted, it marks a significant moment for prospective buyers. This initial agreement transitions the buyer into a structured, multi-step process. Navigating the journey from an accepted offer to holding the keys involves various procedures, each requiring careful attention. This sequence of events ensures a secure and transparent property transfer.

Formalizing the Agreement and Initial Steps

The verbal acceptance of an offer quickly progresses to a formal, written purchase agreement. This document, also known as a sales contract, serves as a legally binding outline of the transaction. It includes details such as the identification of all parties involved, the specific property address and legal description, the agreed-upon purchase price, the target closing date, and which items, like appliances, are included or excluded.

The agreement includes contingencies, which are conditions that must be met for the sale to proceed. Common contingencies protect the buyer, addressing aspects like securing financing, obtaining a satisfactory home inspection, and ensuring the property appraises at or above the purchase price. Another contingency might relate to the sale of the buyer’s current home. These clauses provide legal avenues for a buyer to withdraw from the contract without penalty if certain conditions are not fulfilled.

Concurrent with the signing of the purchase agreement, buyers typically provide an earnest money deposit. This deposit demonstrates the buyer’s serious intent to complete the purchase. Earnest money amounts commonly range from 1% to 3% of the home’s sale price.

Once submitted, these funds are usually held in an escrow account by a neutral third party, such as an escrow agent or attorney, until the transaction closes. This arrangement protects both the buyer and the seller. If the sale successfully closes, the earnest money is typically applied toward the buyer’s down payment or closing costs. However, if the buyer withdraws for a reason not covered by a contract contingency, they may forfeit this deposit to the seller.

Conducting Due Diligence

After the purchase agreement is signed, due diligence begins, allowing the buyer to thoroughly investigate the property’s condition. A primary step is arranging a professional home inspection. This inspection visually examines the home’s physical structure and systems, including the roof, foundation, plumbing, electrical systems, and heating and cooling units.

Beyond a general inspection, buyers may opt for specialized assessments, such as checks for pests, radon, mold, or the condition of a septic system. The purpose of these inspections is to uncover any significant issues that could affect the property’s value or safety. The buyer typically pays for these inspections.

Upon receiving inspection reports, the buyer has several options if problems are identified. Depending on the inspection contingency terms, the buyer might request the seller to make specific repairs, ask for a credit towards closing costs, or negotiate a reduction in the purchase price. If severe or numerous issues are found, the inspection contingency may allow the buyer to withdraw from the contract and receive their earnest money back.

Another important step during this phase is the home appraisal, an independent valuation of the property’s market value. Lenders require an appraisal to ensure the property’s value supports the loan amount, thereby protecting their investment. The appraiser evaluates the home’s features, condition, and recent sales of comparable properties.

If the appraisal comes in lower than the agreed-upon purchase price, an appraisal contingency in the contract becomes relevant. The buyer may need to bring additional cash to closing to cover the difference, or the buyer and seller may renegotiate the sale price. If an agreement cannot be reached and an appraisal contingency is in place, the buyer may have the right to terminate the contract.

Navigating the Financing and Title Process

Securing the mortgage loan involves underwriting, the lender’s comprehensive review of the buyer’s financial profile to assess creditworthiness and loan risk. Underwriters examine various financial documents, including recent pay stubs, W-2 forms, and bank statements to verify income, assets, and employment history.

They also scrutinize the buyer’s credit history and debt-to-income ratio to ensure the borrower can reasonably afford the monthly mortgage payments. This thorough examination ensures the loan aligns with lender guidelines and federal regulations. The underwriting process can take several days to weeks, depending on the borrower’s financial situation and responsiveness in providing documentation.

Simultaneously, a title search is conducted to verify the seller’s legal ownership and identifies any claims or encumbrances against the property. This search involves reviewing public records for issues such as outstanding mortgages, unpaid property taxes, judgments, or liens. The goal is to ensure the property’s title is clear and transferable, meaning no other party has a financial or legal claim that could impede the transfer of ownership.

Following a successful title search, title insurance is obtained, providing protection against financial loss due to defects in the property’s title. There are two primary types: an owner’s policy, which protects the buyer from unforeseen claims after purchase, and a lender’s policy, which protects the lender’s financial interest. While the lender’s policy is typically required for a mortgage loan, an owner’s policy, though optional, offers valuable protection against issues a thorough title search might not uncover, such as fraud or forgery in past deeds.

Preparing for and Executing the Closing

As the closing date approaches, buyers typically conduct a final walkthrough of the property. This walkthrough, usually performed within 24 hours of closing, allows the buyer to confirm the property is in the agreed-upon condition. It is also an opportunity to verify that any repairs negotiated after the home inspection have been completed and that all fixtures and appliances included in the sale remain in place and are operational.

A few days before closing, the buyer receives a Closing Disclosure (CD) from their lender. This document provides a detailed breakdown of all financial aspects of the transaction, including loan terms, projected monthly payments, and all closing costs. Federal regulations require the buyer receive this document at least three business days before the scheduled closing, allowing ample time for review and to ask any questions.

The CD itemizes all expenses, such as loan origination fees, appraisal fees, title insurance premiums, and prorated property taxes or homeowners association dues. Buyers should carefully compare the CD with the initial Loan Estimate to identify any significant discrepancies. Understanding each charge on the CD is important, as it represents the final financial commitment required to complete the purchase.

The closing meeting is the final step where ownership is officially transferred. Attendees typically include the buyer, seller, real estate agents, and a closing agent or attorney. During this meeting, numerous legal documents are signed, including the deed, which transfers legal ownership from the seller to the buyer, and the mortgage or deed of trust, which secures the loan against the property.

Funds are transferred, with the buyer typically bringing the remaining balance of the down payment and closing costs, often via a wire transfer or cashier’s check. Once all documents are signed and funds disbursed, the buyer receives the keys to the home. Immediately after closing, the deed is recorded with the local county office, officially registering the new ownership in public records.