You Put an Offer on a House. What Happens Next?

Submitting an offer on a house marks a significant step toward homeownership. This step initiates a structured process guiding buyers from offer submission to taking possession of their new home. Understanding the sequence of events that unfold after an offer is made can help demystify the path ahead, transforming a complex transaction into a series of manageable steps. This article explores the typical progression, providing insight into what buyers can expect as they navigate this significant financial endeavor.

Offer Acceptance and Negotiation

Once an offer is submitted, the seller has a limited timeframe to respond, typically 24 to 72 hours. Offers often include an expiration date, usually around 48 hours, encouraging a timely seller response. During this period, three primary outcomes are possible: the seller can accept the offer, reject it, or issue a counter-offer.

A counter-offer signifies the seller’s willingness to proceed with the transaction but with revised terms. These revisions might include changes to the purchase price, adjustments to contingencies, or modifications to the closing timeline. The buyer then reviews the counter-offer and can choose to accept it, make another counter-offer, or withdraw their original offer entirely. This back-and-forth exchange, known as negotiation, continues until both parties reach a mutual agreement and execute a binding contract, or one party terminates discussions. Adherence to specified response deadlines helps keep the process moving forward.

Navigating Contingencies and Loan Processing

After an offer is accepted and the contract is executed, the transaction enters an important period involving contingencies and loan processing. Contingencies are conditions that must be met for the sale to proceed. Common contingencies include home inspection, appraisal, and financing.

The home inspection contingency allows the buyer to have the property inspected for issues. Buyers should schedule a comprehensive home inspection, which covers structural components, roofing, electrical, plumbing, and heating/cooling systems. Attending the inspection allows buyers to understand the property’s condition and ask questions. After reviewing the detailed inspection report, buyers can negotiate with the seller for repairs, credits, or a price reduction based on significant findings, or they may choose to withdraw from the contract if major issues are discovered.

The appraisal contingency, often required by lenders, confirms the property’s value. The buyer’s lender will order an independent appraisal to determine if the home’s value supports the loan amount. If the appraisal comes in lower than the agreed-upon purchase price, the buyer may have several options, such as renegotiating the price with the seller, accepting the lower appraised value and paying the difference out of pocket, or potentially withdrawing from the agreement if the contract allows. This step ensures the buyer is not overpaying and the lender’s investment is secure.

The financing contingency protects the buyer by making the sale dependent on their ability to secure a mortgage. The buyer must promptly provide all requested financial documents, such as income and bank statements, to their lender for underwriting. The lender’s underwriting team reviews these documents to verify the buyer’s financial history, income, and capacity to repay the loan. Quick responses to lender inquiries and monitoring the loan approval process help avoid delays and ensure the loan finalizes within the specified contingency timeline.

Final Preparations for Closing

As the transaction progresses past contingencies, several preparatory steps occur to ready the sale for closing. A title search examines public records, such as deeds, mortgages, and liens, to confirm clear ownership and identify any claims against the property. Any issues discovered, like undisclosed liens or errors in past ownership transfers, must be resolved before closing, ensuring the buyer receives a clean title.

Buyers are also responsible for securing homeowners insurance. Lenders typically require proof of an active policy before approving the loan. This insurance protects the property from various hazards and is a financial safeguard for both the homeowner and the lender. Additionally, buyers should contact local utility providers, including electricity, water, gas, and waste collection services, to arrange for service to begin on or before their move-in date.

The final stages of loan approval culminate in receiving “clear to close” (CTC) status from the lender. This signifies that all underwriting conditions have been met, and the loan is approved and ready for funding. Upon receiving CTC, the lender will typically notify all parties, including the real estate agents and title company, to schedule the closing date. Finally, the buyer’s real estate agent will schedule a final walk-through of the property to ensure the home is in the agreed-upon condition.

The Closing Day

Closing day marks the official transfer of ownership, culminating the home-buying process. The day often begins with the final walk-through, providing the buyer a last opportunity to inspect the property. During this walk-through, the buyer confirms the home is in the condition stipulated in the purchase agreement, that any agreed-upon repairs are completed, and that all fixtures and appliances included in the sale are present and operational. Buyers should identify any new damage or unexpected changes before finalizing the transaction.

Following the walk-through, all involved parties gather for the closing meeting. Attendees include the buyer, their real estate agent, and a closing agent or attorney; the seller and their agent may also be present. The primary activity involves signing numerous legal and financial documents. Buyers sign documents such as the promissory note, their promise to repay the mortgage loan, and the mortgage or deed of trust, which secures the lender’s rights to the property. The Closing Disclosure, outlining all loan terms, fees, and costs, is reviewed and signed.

Once all documents are signed, the funds are transferred to complete the transaction. The buyer’s down payment and closing costs are sent via wire transfer to an escrow account before closing. The lender then wires the loan funds to the escrow agent. The escrow agent disburses these funds to the seller, covering the purchase price, and pays all associated closing costs and fees. Upon completion of the fund transfer and document recording, the buyer receives the keys to their new home, and the deed is recorded with the local county, officially transferring legal ownership.