Before you can officially move out of your old house, there are a few more steps you need to take, which include making an earnest money deposit, scheduling a home inspection, and eventually, closing on your new house.
After you make an offer and it's been accepted, the first step toward homeownership is signing the purchase agreement. The purchase agreement is a document that outlines the details of the home purchase, including grounds for terminating the sale.
While many elements of the purchase agreement may have been agreed to during earlier negotiations, it’s important to carefully review the details with your real estate agent to make sure everything is up to date. Signing the purchase agreement turns it into a binding contract.
The buyer's agent usually writes up a sales contract using a template used by their brokerage. When you're ready to submit an offer, they will submit it to the listing agent, who will discuss it with the homeowner and either accept, reject, or make a counter offer.
After the purchase agreement is signed by both parties, the home is officially under contract. The buyer can move forward with scheduling a home inspection and securing a home loan, among other steps.
In real estate, an accepted offer on a house usually hinges on a few certain conditions or contingencies, which allow a potential buyer to back out if they aren't met. Purchase contracts are commonly contingent on:
If you make a cash offer on a home, then your purchase contract likely wont need to satisfy these conditions. That's why accepted offers can close faster when you pay in cash. (If you're looking to make a cash offer on a home, Orchard can help.)
During a seller's market, homeowners may field multiple offers and will choose not to accept offers with contingencies attached. Buyers can also waive contingencies, which can be risky.
Once your offer is accepted and negotiations are complete, both you and the seller will sign the purchase agreement.
If you’re a new homebuyer, you may not be familiar with the many steps that come between making an offer and officially closing on a house. Review this list to get a better idea of what happens during this time after you’ve signed the purchase agreement.
An earnest money deposit is a sum of money that is held in an escrow account during the remainder of the homebuying process. The buyer pays the earnest money deposit in good faith, to show their intent to purchase the home.
Although you may have been pre-approved for your home loan by a mortgage lender, you will need to submit additional documents to get official approval before your loan goes into effect. Make sure to follow the lender’s instructions and submit your mortgage application on time.
Hire a home inspector to check for any damage in the home. If they find issues, your offer and/or purchase timeline may be impacted, so make sure you schedule the home inspection soon after your offer is accepted. Inspections may take several weeks to get scheduled, but typically only take a few hours to complete. On average, a home inspection costs $300 to $500.
Home appraisals are completed by third-party companies to determine the value of a home. They are often required by mortgage lenders to ensure that the value of the home is equal to your loan amount. If the appraisal is lower than the sales price, you may be able to renegotiate.
After you've signed a purchase agreement and had a home inspection, the seller will make any necessary repairs requested by the buyer.
During the title search, all legal documents showing past ownership of the home are reviewed to ensure the current seller has the legal right to sell the property. Your mortgage lender will likely set up the search for you, but if they don’t, you can contact a title search company to complete it.
Your lender will likely require you to get a homeowners insurance policy. Start by asking your agent for insurance company recommendations and reach out to other insurance companies you work with (such as your auto insurance company) for quotes before you purchase a policy.
A few days before your closing appointment, complete a final walkthrough of the property. Check that all repairs are completed and any items that were part of the sale were left. Your closing appointment will likely take place at the title company’s office. Your real estate agent, the seller, and their agent will all be present to sign over the property. Once you sign the paperwork and pay your closing costs, the home is yours.
Yes, the seller is allowed to continue showing the house to prospective buyers even after a buyer's offer is accepted. This is normal practice and not something to worry about because the seller won't void your purchase agreement just because they received additional offers. The only time it's acceptable for the seller to entertain and accept better offers is if the purchase agreement includes a kickout clause.
The purpose of the seller continuing to show the house is to receive backup offers. These offers come in handy for the seller if the original offer falls through because the terms of the purchase agreement aren't met.
For example, if you cancel the agreement due to the results of the inspection (per your inspection contingency), the seller can default to one of their multiple backup offers rather than starting from square one and showing the house again.
Use our home sale calculator to estimate your net proceeds.
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