Accepted Offer: Now What?
Congratulations, you are on your way to owning your very own home! Follow these suggestions (and your Realtors's advice) so that the accepted offer and closing will go as smooth as possible.
You will be asked for a down payment on the home you are purchasing. You can choose to put down as much or as little as you want (depending on your mortgage), but remember, the more you put down toward the total price of your home, the less your mortgage payments will be every month.
During this period of purchasing your home, you are going to need a title company to act as an independent third party so that you know when and who to give your money to get the deed to your new home. The title company will hold your deposit and coordinate much of the activity that goes on during the accepted offer period. This deposit check may also be held by an attorney or in the broker's trust account. Make sure that there are sufficient funds in your account to cover this check.
The deposit check will be cashed. Assuming the sale goes through, this money will be applied to the purchase price of the home. If for any reason the sale is not consummated, you may be entitled to receive all of your deposit back, less standard cancellation fees. In certain instances, the seller may be able to retain this money as liquidated damages. Prior to executing a purchase contract, it would be wise to speak with your counsel regarding whether or not it is your best interest to have a liquidated damages clause as part of the contract.
- Earnest Money: when you submit the money paid to confirm the agreement
- Inspection contingency: this should be completed as soon as possible after the contract to purchase is signed as unsatisfactory results of the inspection may mean that you will want to cancel the contract.
- Appraisal: the appraisal is ordered by your lender to give a non-biased third party opinion of the value of the home
- Financing Loan Commitment: this means that your information has been fully reviewed (taxes, bank statements, debt-to-income ratio, etc) and you are approved to purchase the home with your mortgage.
You've made it! Once the sale has closed, you're the proud owner of a new home. Congratulations!