What Happens After My Offer Is Accepted? New Homebuyer Guide
Once you’ve found a house that you’ve fallen in love with, the next step is to submit an offer. Putting in an offer is one of the most crucial steps in the homebuying process, so it’s essential to make sure you know what to expect and how to properly go about it. From what to include in an offer letter to what happens after you make an offer, this guide will provide an insider’s look at what it means when you have your offer accepted.
How Do You Make an Offer?
Making an offer shows the home seller that you’re serious about buying a home and you’re ready to put your money where your mouth is. Here is an overview of what making an offer on a house looks like.
Decide on a Price
If you’re buying a home without a traditional real estate agent, it’ll be up to you to decide how much you would like to offer on the home.
You can do this by looking at similar houses in the neighborhood that are for sale. Be sure to look at factors such as location, square footage, number of bedrooms, and size of the yard. This will give you an idea of the home’s value and if the seller is asking a reasonable price for the home. In a competitive seller’s market, you’ll have the best chance of having your offer accepted if you offer at or above the listing price.
Think About Contingencies
Contingencies are a common to include in an offer and refer to stipulations that must be met should the seller decide to accept your offer. A home inspection contingency is one of the most common contingencies to include. In fact, according to the National Association of Realtors, approximately 80% of homebuyers include a home inspection contingency in their purchase agreement. Other common contingencies include:
- Home sale contingency — A buyer can include a home sale contingency, which gives them a specified amount of time to sell and settle their old home before proceeding with the purchase of the new one.
- Appraisal contingency — An appraisal contingency allows the potential homebuyers to withdraw their offer without repercussions if the house fails to appraise for a certain amount.
- Mortgage contingency — Adding a mortgage contingency gives the buyer an option to back out of the home purchase if they’re not able to obtain loan approval.
Contingencies are more commonly seen during a buyer’s market versus a seller’s market, as buyers will have more negotiating power. Regardless of the current market conditions, however, it might be worthwhile to add contingencies to protect yourself as the buyer.
Submit a Purchase and Sale Agreement
After considering your contingencies and what price you want to offer, you will compile this information into an offer letter and submit it in a purchase and sale agreement.
Also known as an P&S agreement, this legally binding document defines both parties' intentions, as well as the terms and conditions that they are agreeing will govern the transaction.
The purchase and sale agreement typically includes the following information:
- Contact information for both the buyer and seller
- The price of the home
- Sale inclusions and exclusions
- Type of payment
- The closing date
- Pre-approval letter
- Good faith deposit or earnest money
What Does “Offer Accepted” Mean?
In real estate, “offer accepted” means that the homeseller has chosen to accept the money you are offering to purchase their home and agreed to the terms and conditions.
While this is exciting, the real estate transaction isn’t over just yet. As a buyer, you’ll still be responsible for completing steps to finalize the sale.
How You’ll Be Notified That Your Offer Is Accepted
Some offers are accepted in a short turnaround time, such as within 24 hours. Other times, it might take a week or more for the seller to respond. If a seller has received multiple offers, they might take longer to get back to you as they are reviewing offers.
The seller has the option to counteroffer, reject, or accept your offer. If they do accept it, they will return a copy of the signed acceptance. Typically, this correspondence happens through a third party, such as a real estate agent, but it can also happen directly between the two parties if you’re using a self-service real estate platform like Aalto.
What Happens After My Offer Is Accepted?
Yay, your offer was chosen! Stop to celebrate this huge step — then learn the timeline that follows.
Put Down an Earnest Money Deposit
Earnest money, also known as a good faith deposit, refers to the amount that the potential buyer agrees to put down upfront to show they are serious about purchasing. It then acts as a deposit on the home, and traditionally is around 1-3% of the sale price. This typically happens in the form of a personal check, certified check, or wire transfer after an accepted offer.
Get an Appraisal
Though similar in nature, a home appraisal and home inspection have very different objectives. Many mortgage lenders require an appraisal of the home to ensure that the home is worth the dollar amount you are borrowing.
During this step, a licensed appraiser will come in and assess the home to determine the fair market or appraised value of the home. The buyer is responsible for covering the costs of hiring an appraiser, which typically costs $300-$600.
Schedule a Home Inspection
During a home inspection, a home inspector will examine the condition and safety of the house, including the interior and exterior.
This is conducted by a professional third-party service that will thoroughly examine the home from the foundation to the rooftop. They will inform the buyer of any potential problems with the home, both seen and unseen.
Most lenders will recommend ordering a home inspection to identify any minor or major problems with the structure. If the home inspection does reveal any major issues, some homebuyers will use this as a negotiating tactic with the seller and offer to lower the purchase price.
Escrow signifies that you’re one step closer to sealing the deal and officially buying your new home.
During this step, your lender will set up an escrow account that will be used to hold funds for your taxes, down payment, and insurance. These funds are managed by a neutral third party and kept there for a certain amount of time, which is typically closing day. Upon closing, the escrow holder will proceed to distribute the funds as outlined in the real estate contract and mortgage agreement.
A final walk-through is one of the final steps in the homebuying process and generally happens shortly before all the final paperwork has been signed. This is an opportunity for the homebuyer to thoroughly look at the new home, without the seller present, and ensure that any agreed-upon repairs have been completed and no new issues have presented themselves.
You’ve finally made it to your closing date, which is when the ownership of the new home is transferred from the seller to the buyer and the sale is complete. On closing day, the final paperwork is signed, funds are transferred from the escrow account, and you will receive the keys to your new house.
Buy Your Dream Home with Aalto
Once you’ve had your offer accepted, you’re one step closer to owning your dream home. As a first time homebuyer, the home purchase process can feel daunting but, with Aalto to guide you through it, it doesn't have to be. At Aalto, we are committed to connecting homebuyers and sellers directly so you won’t need to hire a traditional real estate agent.
Choosing to buy with Aalto’s self-service platform gives you access to hundreds of listings that you won’t find elsewhere. You can even receive up to 1.5% cash back on the purchase of your home when you work with us. Sign up on Aalto today and find your dream home on your terms and in your time frame.
Aalto is a real estate broker licensed by the State of California, License #02062727 and abides by Equal Housing Opportunity laws. This article has been prepared solely for information purposes only. The information herein is based on information generally available to the public and/or from sources believed to be reliable. No representation or warranty can be given with respect to the accuracy of the information. Aalto disclaims any and all liability relating to this article.