What Happens After an Offer Is Accepted on a House?

After an offer is accepted on a house, a structured, multi-stage process begins. This period involves administrative, financial, and investigative steps that solidify the agreement between buyer and seller, requiring careful attention to contractual timelines for property ownership transition.

From Offer to Contract

The journey from a verbally accepted offer to a binding agreement formalizes the purchase. A written purchase agreement, or contract, is prepared, outlining the terms and conditions of the sale. Both buyer and seller sign this document, transforming the verbal agreement into an enforceable commitment detailing the purchase price, financing terms, property description, and any agreed-upon contingencies.

After signing the purchase agreement, an escrow account is opened or a title company engaged. This neutral third party holds all funds and documents until all contract conditions are met, ensuring contractual obligations are fulfilled before ownership transfer.

An earnest money deposit is initiated. This deposit demonstrates the buyer’s serious intent to purchase the property and is held in the escrow account. This sum is credited towards the buyer’s down payment or closing costs at settlement.

Property Due Diligence and Loan Approval

After contract signing, property due diligence ensures the buyer is informed about the property’s condition. Home inspections allow the buyer to assess the property’s structural integrity, mechanical systems, and overall condition. General home inspections identify potential issues with roofing, plumbing, electrical systems, and foundations. Specialized inspections for pests, radon, or lead-based paint may also be conducted to uncover hidden defects or environmental hazards.

Concurrently with inspections, the lender orders a home appraisal to determine the property’s market value. This step is for loan approval, as lenders will not finance a property for more than its appraised value. The appraiser provides an independent assessment to protect both the lender’s investment and the buyer from overpaying.

Securing financing involves loan underwriting, where the lender reviews the buyer’s financial documentation. Buyers submit income verification, asset statements, and credit reports. Underwriters assess the buyer’s ability to repay the loan, considering debt-to-income ratio and creditworthiness. This process can take several weeks.

A title search, conducted by the title company, is another element of due diligence. This search ensures the property’s title is clear of liens, encumbrances, or legal disputes. The title company investigates public records to verify the seller’s right to transfer ownership and identifies outstanding mortgages, unpaid taxes, or judgments. A clear title protects both the buyer and the lender against future ownership claims.

Clearing Contingencies

After inspections and appraisals, the focus is on satisfying contractual conditions known as contingencies. These clauses in the purchase agreement must be met for the transaction to proceed, protecting the buyer. Common contingencies relate to satisfactory home inspection results, the property appraising at or above the purchase price, and final loan approval.

Clearing these conditions involves the buyer notifying the seller that a contingency has been satisfied or waived. After a home inspection, the buyer might request repairs, accept the property as is, or terminate the contract if issues are significant. If repairs are agreed upon or the buyer accepts the property’s condition, the inspection contingency is removed, often through a signed addendum.

Once the appraisal confirms the property’s value and the lender provides final loan approval, the appraisal and financing contingencies are cleared. This involves the buyer submitting forms or notices to the seller, indicating these conditions have been met. Failing to clear contingencies within agreed timelines can allow either party to terminate the contract without penalty, sometimes resulting in the return of the earnest money deposit.

The Closing Process and Beyond

As the transaction nears its conclusion, a final walkthrough of the property is conducted before closing. This allows the buyer to ensure the property is in the agreed-upon condition, all negotiated repairs are completed, and the home is vacant. Buyers should verify all included appliances are present and operational, and no new damage has occurred since the initial inspection.

The closing meeting, also known as settlement, is where all legal documents are signed. During this meeting, the buyer signs the promissory note (promise to repay the loan) and the mortgage or deed of trust (secures the loan against the property). Final disclosure statements, detailing all financial aspects, are also reviewed and signed by all parties.

Funds are transferred from the buyer and lender to the seller through the escrow or title company. This includes the buyer’s down payment, closing costs, and loan proceeds. Closing costs cover various fees such as origination fees, title insurance, attorney fees, and recording fees.

After the transfer of funds and signed documents, the deed is recorded with the local county recorder’s office. This recording legally transfers ownership from the seller to the buyer. Buyers typically take possession immediately after closing, though possession can sometimes be delayed by prior agreement. After taking possession, immediate tasks include changing utility accounts, arranging for mail forwarding, and securing the new home.