What To Do After Your Home Offer Is Accepted

Having your offer accepted on a house can create a wonderful feeling, but that feeling can be all too fleeting. Once you’ve been notified your offer has been accepted, your thoughts may quickly shift to, “What do I need to do next?”

Knowing that this is a real possibility, we’ve broken down the rest of the home buying process into some simple steps that will guide you all the way through closing day on your new home.

11 Things To Do Once The Seller Accepts Your Offer On A House

A seller accepting your offer on a home doesn’t mean the home is yours or that the sale is official. In fact, there’s still lots left to do. Here are 11 important actions you’ll need to take before you’re handed the keys to your future house.

1. Deposit Earnest Money

Earnest money is a payment you’ll deposit with a third party, such as a law firm, real estate broker or title company. This money is held in escrow until closing, when it’s then applied to your down payment or closing costs. An earnest money deposit is refundable in certain situations, and the amount will be a very small fraction of the sales price (usually 1% – 3%) that you can typically pay with a check, money order or wire transfer. Combined with a preapproval letter from a lender, earnest money should instill confidence in the seller that you’re a serious buyer with the financial means to close the deal.

Although highly recommended, an earnest money deposit isn’t legally required. However, the terms of a purchase agreement often call for it.

Pay The Seller A Due Diligence Fee

Similar to an earnest money deposit but only applicable in some states is what’s known as a due diligence fee, which you’ll pay directly to the seller within a day or two of signing the purchase agreement if it’s negotiated as part of the offer on the home (like an earnest money deposit, a due diligence fee isn’t legally required).

Usually less than an earnest money deposit, the due diligence fee is a non-refundable, “good-faith” payment to the seller for taking their home off the market for the duration of the due diligence period. Over this stretch of 14 to 30 days, the house will usually be professionally inspected and appraised, and the buyer can do additional research on the home and request repairs based on the inspection’s findings.

If the home sale goes through, the due diligence fee will be applied to the purchase.

2. Secure A Home Loan

If your finances are in good enough standing that you can afford the home you wish to buy, you should be able to get a home loan. It can be a time-consuming process for your lender’s team to review your application documents, but much of the work is already done if you received loan preapproval before making your offer.

Once you have an accepted offer and you’re later formally approved for a mortgage through a process known as underwriting, your lender will be able to generate documents using the property address that show you exactly what your monthly mortgage payment and interest rate will be.

3. Have The Home Inspected

Another to-do list item after having your offer accepted is to schedule a professional home inspection. Although an inspection isn’t mandatory with some loan programs, it’s a very good idea, and some real estate agents will recommend including language in your offer stating that the purchase is contingent on the house passing inspection.

Here’s how the home inspection process should play out:

• Find a home inspector. You can look for a home inspector yourself, but your real estate agent should also be able to recommend one based on their professional relationships.
• Pay the inspection cost. The buyer is responsible for paying the inspection fee. Inspection costs vary based on the location and square footage of the home but are generally in the $200 – $500 range.
• Review the inspection report. The inspector will provide you with a detailed report listing all of the home’s issues (or potential issues).
• If necessary, negotiate repairs with the seller. Once you’ve reviewed the inspector’s report, you can negotiate with the seller based on the findings. For example, you could ask the seller to lower their asking price or fix certain issues before closing day.

4. Have The Home Appraised

Another hurdle to clear after your offer is accepted and before you can close is the home appraisal. A lender orders a home appraisal for their protection as well as yours.

The appraiser will carefully assess the value of the house through an examination of the property and the sales prices of similar, recently sold homes nearby.

5. Review The Title

A house title isn’t a physical document but an abstract legal concept that states who’s the rightful owner of the property. (The deed is the physical document proving who holds the home’s title.)

The title will also reveal the prior owners and whether the property has any liens on it. The seller holds the title, but you’ll be able to have it inspected by a title company, which you’ll hire. The key fact you’ll need to establish here is that no other entities, such as the mortgage company of a previous owner, have a claim on the title.

6. Transfer The Utilities

It’s important to set up utility services for your new home well ahead of moving day. First, identify the utility providers in your area. Depending on the home’s location and which utility or utilities you’re having set up, you may be able to choose from multiple companies.

As soon as you know your move-in date, contact all of the utility companies you’ll be using and set up a start-of-service date since some companies schedule installations as far out as 2 or 3 weeks. Nobody wants to move into a house that’s too cold, too hot or without water service. Ideally, you’ll have all of your utilities up and running the day before you move in.

7. Obtain Homeowners Insurance

You’ll need to show your mortgage lender proof of homeowners insurance before your home purchase can be finalized. Sign up for a homeowners insurance policy online or by contacting an insurance provider.

Basic coverage includes home repairs or replacement of your home in the event of damage by fire, vandalism, accidents or natural disaster. Policies often exclude flood and earthquake damages, which can be covered by purchasing supplemental insurance specific to these disasters.

8. Schedule Home Repairs

If the home inspection brought to light issues that required negotiations with the seller, those negotiations are presumably settled. Now it’s time to schedule repairs that are necessary before you move in – such as replacing the furnace or fixing a dangerous wiring issue.

If your agreement was for the seller to address these issues, the repairs should be done before you close on the house. If you and the seller agreed for you to handle the repairs but with financial compensation from the seller, you can schedule the work to take place after closing but before you move in.

9. Complete A Final Walk-Through

The final walk-through is your last chance to see the house before completing the home purchase. The walk-through can be as simple as a brief once-over look around the premises to give you peace of mind that everything that was in satisfactory condition when you first saw the home is in the same condition you remember it being in.

That said, if the seller agreed to make some repairs after the inspection, the final walk-through is also the time for the buyer to ensure those repairs were actually made.

10. Schedule Your Closing

Once you’ve gone through the steps above and the seller has accepted your offer and earnest money, you still need to schedule your closing.

The various parties involved in the transaction will settle on a closing date that’s agreeable to everyone. Usually, the closing date will be 30 – 60 days after the seller accepts the offer.

11. Close On Your New Home

Several people typically attend the closing. Among those who may join the buyer on closing day are the buyer’s agent, the sellers, the listing agent and title company representatives. Some states require that an attorney also be present.

You’ll be signing a number of documents to finalize the sale. You’ll also bring a certified or cashier’s check for the down payment and closing costs, or you might be able to send this money via wire from your bank to the closing attorney’s office. Once you’ve signed all the papers, you should get the keys to your new home.

Common Problems To Prepare For

Closing on a home is an involved process, even if everything goes relatively smoothly. However, if you encounter some bumps in the road, that doesn’t mean the deal is off and you’ll be unable to complete the purchase. Here are some common obstacles you might face.

Potentially Serious Issues With The Home

An inspection report will almost always reveal at least small issues with a house. No home that’s been lived in is in perfect condition. However, if the house has major defects or problems, you’ll need to decide how to handle them.

The seller may agree to repair some but not all of the issues. If the house has major issues such as a roof that needs replacement or a leaky basement – which can easily cost thousands of dollars to remedy – and the seller won’t make repairs, you may be able to negotiate a reduced asking price. If that fails, you’ll need to decide if you prefer to personally cover those expenses or walk away from the deal.

An Appraisal That Comes In Low

The appraised value of the property might be less than what you’ve agreed to pay for it. This is more likely in hot seller markets. A low appraisal doesn’t have to kill the deal, however.

In most cases, a lender will allow you to pay cash to make up the difference between the appraised value and the asking price. If you’re able to bridge this gap, you can still get a loan for the amount you need – because it won’t exceed the appraised value.

The Bottom Line: Know What Happens After Your Offer Is Accepted

Hearing your offer has been accepted is a huge moment and one to savor, so don’t rush the celebration when this happens. That said, your work isn’t done yet. Be sure to partner closely with your lender and real estate agent throughout the remainder of the home-buying journey while leaning on their expertise.

To find out what Rocket Mortgage^Ⓡ can do for you, start the initial approval process today.