What Happens After an Offer Is Accepted?

An accepted offer signals the beginning of a structured process involving numerous legal and financial steps. This phase requires diligent attention to detail and adherence to contractual timelines to ensure a smooth transition of ownership. Successfully navigating these subsequent stages is essential for both buyers and sellers as they move towards the final transfer of the property.

Formalizing the Purchase Agreement

Following a verbal agreement, the initial step involves formalizing the understanding into a legally binding purchase agreement. This comprehensive document outlines the terms and conditions of the sale, including the purchase price, financing contingencies, inspection periods, and closing date. Both parties review and sign this agreement, transforming the accepted offer into a contractual obligation.

A financial component at this stage is the earnest money deposit. This deposit, typically ranging from 1% to 3% of the purchase price, demonstrates the buyer’s commitment to the transaction and is held in a neutral third-party escrow account. It serves as security for the seller, indicating serious intent to proceed with the purchase.

The establishment of an escrow account manages the transaction’s financial and legal aspects. An escrow agent acts as a neutral third party, holding all funds and documents related to the sale until all conditions are met. This account ensures that all financial transfers and document exchanges occur securely and in accordance with the purchase agreement’s terms.

Property Review and Contingency Fulfillment

Once the purchase agreement is executed, a period of due diligence begins, centered on a thorough review of the property and fulfillment of contractual contingencies. A professional home inspection is a primary focus, typically conducted within 7 to 14 days of contract acceptance. This inspection evaluates the property’s structural integrity, major systems such as plumbing and electrical, and overall condition, identifying potential issues that may require repair or further negotiation.

Another step for financed purchases is the property appraisal, ordered by the lender to determine the home’s market value. This assessment ensures the property’s value supports the loan amount, mitigating risk for the lender. Should the appraised value be lower than the agreed-upon purchase price, it can impact the loan-to-value ratio and may necessitate renegotiation or additional funds from the buyer.

Various other contingencies may be included in the purchase agreement, providing the buyer with specific protections. These can include pest inspections, radon testing, or the review of Homeowners Association (HOA) documents, such as bylaws and financial statements. Each contingency comes with a defined timeframe, during which the buyer can address any findings or, if necessary, withdraw from the contract without penalty.

Securing Financing and Title

The period following the formal agreement is dedicated to securing financial approvals and ensuring a clear title to the property. Buyers engage in the mortgage application process, submitting financial documents, including W-2s, pay stubs, bank statements, and tax returns. The lender’s underwriting department reviews these documents to assess the buyer’s creditworthiness and ability to repay the loan, leading to final loan approval.

Concurrently, a title search is conducted to examine public records related to the property’s ownership history. This search aims to uncover any potential encumbrances or defects in the title, such as existing liens, easements, or unresolved ownership disputes. Identifying and resolving these issues before closing ensures the buyer receives clear and marketable title to the property.

Title insurance plays a protective role for both the buyer and the lender against future claims arising from title defects that may not have been discovered during the initial search. The buyer purchases an owner’s policy, and the lender requires a lender’s policy, with premiums often paid as a one-time fee at closing. This insurance provides financial protection and legal defense in case a title issue emerges after the sale.

Receipt of a “clear to close” status from both the lender and the title company signifies that all financial conditions for the loan have been met and that the property’s title is free of major encumbrances, allowing the transaction to proceed to the final closing stage.

The Closing Process

As the closing date approaches, buyers conduct a final walk-through of the property. This visit confirms the property’s condition aligns with the purchase agreement, verifies any agreed-upon repairs have been completed, and ensures the seller’s personal belongings have been removed. This is an opportunity to address any last-minute discrepancies before the final transfer.

Prior to closing, the buyer receives a Closing Disclosure (CD) from their lender. This document is provided at least three business days before the scheduled closing. The CD itemizes all final loan terms, projected monthly payments, and a breakdown of all closing costs and credits, outlining the exact amount of funds the buyer needs to bring to closing. Review of this document ensures accuracy and understanding of all financial obligations.

On closing day, parties gather at a designated location. Legal documents are signed, including the promissory note, the mortgage or deed of trust, and the deed, which officially transfers ownership. Funds are then transferred, with the buyer’s remaining balance disbursed and the seller receiving their net proceeds.

Upon the signing of all documents and the transfer of funds, the deed is recorded with the local county recorder’s office, legally establishing the buyer as the new owner. The final step is the exchange of keys, granting the buyer official possession and access to their new property.