What Happens After an Offer on a House Is Accepted?

An accepted offer on a house marks an exciting milestone in the home-buying journey. While the verbal agreement signifies a significant step, it is the beginning of a structured, multi-phase process that culminates in property ownership. This journey involves numerous legal, financial, and logistical steps designed to protect both the buyer and the seller.

From Accepted Offer to Formal Contract

After a verbal offer acceptance, the next immediate step involves formalizing this agreement into a legally binding purchase contract. Real estate agents typically facilitate the drafting of this document, often referred to as a purchase agreement or sales contract. This agreement outlines the precise terms and conditions of the sale, transforming the initial verbal understanding into a detailed written commitment.

The purchase agreement specifies several key components, including the agreed-upon purchase price, the closing date, and various contingencies that must be satisfied for the sale to proceed. An earnest money deposit, typically ranging from 1% to 3% of the purchase price, demonstrates the buyer’s serious intent to purchase the property. This deposit is usually held in an escrow account by a neutral third party, such as a title company or an attorney.

Opening escrow or engaging a closing attorney or title company is another immediate action following the accepted offer. These entities act as neutral third parties, holding all funds and documents related to the transaction until all conditions are met. They facilitate the smooth exchange of money and property ownership, ensuring all legal and financial requirements are satisfied. The buyer must review and understand the formal contract before signing, as it becomes the governing document for the entire transaction.

Navigating Due Diligence and Contingencies

Following the formalization of the purchase agreement, the due diligence phase begins, during which the buyer conducts thorough investigations into the property and satisfies contractual conditions. A home inspection is a primary step, involving a licensed inspector examining the property’s structural integrity and major systems, such as plumbing, electrical, and HVAC. The detailed report highlights any defects or necessary repairs, allowing the buyer to request repairs, credits, or renegotiate the purchase price based on the property’s condition.

A home appraisal assesses the property’s fair market value for the lender. A licensed appraiser evaluates the home’s features, condition, and comparable sales in the area to determine its worth. If the appraisal comes in lower than the agreed-upon purchase price, it can impact the loan amount the lender is willing to provide, requiring the buyer to bring more cash to closing or renegotiate with the seller.

Loan underwriting and approval represent a significant financial step, where the buyer’s lender reviews financial documents to grant final loan approval. This process involves verifying income, assets, and credit history to ensure the buyer meets the lender’s criteria for the mortgage. The lender reviews pay stubs, bank statements, tax returns, and other financial records to confirm the buyer’s ability to repay the loan.

A title search is conducted to ensure the property has a clear ownership history, free from any outstanding liens, encumbrances, or disputes. This search examines public records to verify the seller’s right to transfer ownership. Title insurance is then purchased to protect both the buyer and the lender against future claims or issues related to the property’s title.

Once these investigations are complete and satisfactory, the buyer formally removes the contingencies outlined in the purchase agreement. This action signals the buyer’s commitment to proceed with the purchase, indicating that conditions such as a satisfactory inspection, appraisal, and loan approval have been met. The removal of contingencies solidifies the transaction and moves it closer to the final closing.

Preparing for Closing

With due diligence largely complete and contingencies removed, the focus shifts to the final preparations for closing. The Closing Disclosure (CD), which the lender is required to provide to the buyer at least three business days before the scheduled closing date, details all final loan terms, projected monthly payments, and an itemized list of all closing costs. The buyer must review the CD, comparing it against the initial Loan Estimate to identify any discrepancies or unexpected charges.

During this preparatory period, the buyer also reviews any additional seller disclosures, such as property condition reports not covered by the initial inspection, or homeowners’ association (HOA) documents. Logistical arrangements are made, including scheduling utility transfers for the closing date and securing a homeowner’s insurance policy, which is a mandatory requirement for most mortgage lenders.

A final walkthrough of the property is typically conducted within 24 to 48 hours before closing. This step allows the buyer to confirm that the property is in the agreed-upon condition, that all personal belongings of the seller have been removed, and that any agreed-upon repairs have been completed. It serves as a final check to ensure the property meets expectations before the legal transfer of ownership. The real estate agent and the closing attorney or escrow officer play coordinating roles, ensuring all necessary documents are prepared, reviewed, and ready for the signing appointment.

The Final Closing and Possession

The home-buying process culminates at the closing appointment, typically held at the office of the title company or a closing attorney. Attendees usually include the buyer, the seller, their respective real estate agents, and the closing agent or attorney who facilitates the signing process.

During the appointment, the buyer signs several documents, including the promissory note, a formal promise to repay the mortgage loan. The mortgage or deed of trust is also signed, creating a legal lien on the property that secures the promissory note. Additionally, the deed, which officially transfers ownership of the property from the seller to the buyer, is signed. Each document is explained by the closing agent.

Following the signing of documents, the transfer of funds occurs. The buyer provides the remaining down payment and closing costs, typically through a wire transfer or certified check, while the lender disburses the mortgage funds. These funds are then distributed to the seller and other parties involved in the transaction, such as for outstanding property taxes or real estate commissions.

The legal process concludes with the recording of the deed with the local county recorder’s office. This official act publicly registers the transfer of ownership. Once the deed is recorded and all financial transactions are complete, the buyer officially receives the keys, marking possession of their new home.