Making an offer – After the Offer Is Accepted

You have found the home you want – made an offer and it has been accepted – Now what?

There is still a lot more to be done before you take possession of your new home, and here is a rundown of what comes next:

DEPOSIT: Once your offer is accepted, be prepared to seal the deal with a deposit. This is usually a percentage of the home's purchase price that indicates you're serious about buying and indicates your good faith. A deposit is generally applied toward the purchase price when you complete the transaction but may be forfeited to the seller if you fail to satisfy the terms of the purchase agreement. Your sales associate can help determine the deposit amount you should be prepared to pay, based on your target home price.

Many first-time buyers are taken by surprise when it comes to the deposit, especially if they must make a quick offer. You should have funds readily available in your checking account, so you can wire funds to escrow the day your offer is accepted. This item could be very important, and the deciding factor in your offer being accepted or not. Be sure to focus on your deposit when developing your negotiating strategy.

ESCROW: This is the phase of the home-buying process when all the i’s are dotted, and the t’s are crossed. It’s when due diligence is performed to make sure your home loan has been approved, the property is in the condition you expect, and all legal documents pertaining to home-ownership are prepared and officially recorded at close of escrow.

During the escrow period – the following things will occur:

Apply for a loan: Unless you’re paying in cash, you’ll need to apply for a mortgage loan.
Prior to submitting your purchase offer, you should have already been pre-approved for your mortgage loan and provided the pre-approval letter to the seller along with your offer.
If you’re not pre-approved, meet with at least two or three lenders and compare their loan options. Be prepared to ask questions and be completely open with the lenders about your finances.

Get your funds ready: Make sure the funds you need for closing and in reserves are both accessible. If you need to pull money from an investment, do it right away as this may take a few days. Keep the paperwork for the transaction to show your lender you liquidated funds to get your down payment.

Home appraisal: Your lender will require your house be appraised by a professional appraiser, who is usually provided by the lender. The appraisal gives you a detailed report on the value of the home. If the home’s appraised value is less than the purchase price, you will need to either make a greater down payment or negotiate with the seller to lower the price. A lender will not give you a loan for more than the appraised value.

Home Inspection: A home inspection tells you if the home has any issues. Inspections aren’t always required, but you should absolutely get one even if you’re not getting a loan. Go over the inspection report in detail with the inspector to make sure you’re familiar with any problems, their severity, and the estimated cost to fix them. Additionally, you may also want to get your home checked for radon and pests, which are additional costs.

If the inspector finds problems, you may be able to get the seller to pay for necessary repairs or lower the purchase price to adjust for the cost.

Obtain homeowners insurance: In most cases, buyers are expected to pay for Homeowners Insurance upfront, before closing. Depending on where you live, you might need extra insurance, like flood coverage. Shop around at several different insurance companies for the best rate. You should also check with your insurance company that insures your automobile as they may offer you a multi-policy discount. Your lender will need proof of insurance before approving your mortgage.

Final walk-through: You will be allowed to do a final walk-through of your new home before closing (usually within 5 day). This allows you to make sure any items that should be there, as per your contract, remain. It also lets you check the condition of the home to make sure no extra damages have occurred since the day you first saw the home. If you find anything different from what you agreed upon, you may postpone the closing to give the seller time to fix any problems.


NOTE: It’s important that you catch every issue during the final walk-through. If you spot them after closing, they’re going to be your problem.

Closing: This is the day when you sign the mortgage documents and officially gain ownership of the property. Most likely your Realtor® will be there, as well as the seller, the seller’s Realtor, the closing officer, and perhaps the mortgage broker.

At this point, the Escrow company should have already contacted you to inform you how much funds to close you will need to bring in, in a form of a Cashier’s Check (or via wire transfer if you arranged for this).

NOTE: You will need to bring your photo ID. Your spouse will also need a photo ID. (In some states, spouses are required to attend and sign papers even if they aren’t on the mortgage.) Check with your Realtor about the details of your closing.