10 Steps To Take After Having Your Offer Accepted
Once your home offer is accepted, there are some key steps you need to take to consummate the deal. Let’s take an in-depth look at each one below.
1. Deposit Earnest Money
The first action that follows an accepted offer is depositing your earnest money. This is the cash (usually 1% – 3% of the purchase price) you deposit into your buyer agent broker’s account to show the seller you’re serious about getting the deal done. This critical step in home buying benefits both buyer and seller.
For the seller, having both the earnest money deposit (EMD) and the loan preapproval letter from your lender will prove that you can afford to buy the home.
Within 24 to 48 hours of your offer being accepted, send that EMD to your real estate agent’s broker. They will hold it in their escrow account until closing. Once you get to the closing table, that money will come back to you so you can complete the purchase of the home.
Keep in mind that you might lose your EMD if you are found to be in breach of the contract, so pay attention to all the fine print. Your real estate agent and lender can help explain all the parameters around your EMD and how you can make sure you don’t lose it.
2. Schedule Property Inspections
Home inspections are a critical part of moving the home buying process along and serve as a great protection for buyers. As the buyer, you should hire a home inspector to come look at the home to make sure there aren’t any major defects that need repairing before you buy the home. A general inspector will look at the HVAC, roof and structural integrity and find other noticeable repairs that need to be completed.
Sometimes they will let you know if a more specialized inspector needs to look at a specific part of the house. For example, they may tell you the chimney needs some repair but encourage you to hire a chimney expert to recommend what specifically needs to be done.
You may also want to hire a drain inspector who will put a camera down the sewage drain to make sure it’s operating properly. This can be an expensive repair, so knowing about it ahead of time and possibly asking the seller to pay for it is essential.
Other inspections might include a radon inspection in the basem*nt to make sure there are safe levels of that gas as well as a pest inspection for things like termites that eat away at wood.
3. Submit All Mortgage Lender Documents
You may have already submitted a few documents to your lender for them to preapprove you for a loan. For a full mortgage application, they will ask for more. This will include bank statements, personal income tax returns, pay stubs and other documents to complete the underwriting process.
Be sure to submit documents to your lender as soon as they ask for them. Getting your loan approved requires a team of professionals at the mortgage company working together. If you hold up the process, you might not be able to close on the home on time.
4. Conduct An Appraisal
The home appraisal is a critical component of your final loan approval. Your lender needs to make sure the home is worth the amount of money they are lending you to buy it. To achieve this, they send an appraiser to the home to determine what it's worth. If the appraiser says the home is worth the amount you are paying for it (or more), things move along smoothly. If the appraiser says the home is worth less than what you have agreed to pay, things get a little complicated.
You might need to come up with extra cash to cover the difference between the appraised value and the amount you agreed to pay. Or, you can ask the seller to reduce the sales price based on the low appraisal.
5. Review Your Title
When you receive your new house title, be sure to look over it carefully. The title is the legal document that details specifics about the property, including who owns it. The critical thing to look for is if there are any claims on the title that could affect the purchase of the property.
For example, if there is a previous mortgage on the home that former owners didn’t pay, that mortgage company may have a claim on the title. The title company should be able to search for these kinds of discrepancies and ensure your title is good to go (also known as a clean title).
6. Transfer All Utilities
A home isn't much use without utilities. After all, if you move in only to find there is no heat or electricity, your new dream home will quickly turn into a nightmare. If you’re the buyer, you will need to call the local utility company and make sure they change the name on the account for that home from the seller’s to yours. The seller will take their name off the account on closing day, so if yours isn't on it, then out go the lights.
7. Take Out A Homeowners Insurance Policy
You are required to take out a homeowners insurance policy before finalizing the purchase of the home. There are a number of companies to choose from, so go online and do some research to see which one is right for you.
Basic coverage includes dwelling insurance, which covers the structure of your home in the event that it gets damaged or destroyed by an event that is covered. Beyond that, you can add on a number of other supplemental insurances like flood insurance, personal property theft replacement, pool insurance and many more.
8. Schedule Home Repairs
If your inspection uncovers some necessary repairs, you have a few different ways you can approach it. One option is to ask the seller to have the repairs done by a licensed contractor before closing. This is an especially good option if the repairs have to do with a safety issue, like a gas leak.
If the repair is not urgent, you can have the seller pay for and schedule the work to be completed after the closing. You can also have the seller credit you some money toward your closing costs. You can then use that money to make the repairs after you move in, but you aren't required to use it for that.
9. Conduct A Final Walkthrough
Right before the closing, you and your real estate agent should do a final walkthrough of the house. This isn't like an inspection, where you are looking at every nook and cranny of the house to see what’s wrong. It’s more of a formality just to make sure everything is as you remember it from the inspection. This is also an opportunity to check out any repairs that were made by the seller if they agreed to some of your inspection requests.
10. Schedule Your Closing
The final step is to schedule the closing on your home. The purpose of the closing process is to finalize the sale by reviewing and signing all the necessary documentation. The seller, buyer, their real estate agents and the title company representative all usually attend the closing.
Make sure you ask your real estate agent what you need to bring to the closing. You may need your driver’s license and a check for your down payment on the home. Your lender will usually wire the rest of the money for the house (the loan amount). Once all the documents are signed, you get the keys and can move in.
