You Made an Offer on a House: Now What?!

Exterior of house

You’ve taken the big step and made an offer on a house—congratulations! But now what?

Over the next 30-45 days you’ll be in frequent communication with your realtor and loan officer as the journey to homeownership begins.

But while you’re obviously thrilled about this new chapter, the uncertainties might make you nervous.

Here’s a look at what to expect.

1. Communicate With Your Lender

The first step after submitting an offer is to notify your lender. Your listing agent will likely contact your loan officer to confirm your pre-approval status, which is an important step to reassuring the seller that you’re capable of buying the home.

Ideally, you should get pre-approved before housing hunting. So if you haven’t completed this step yet, you’ll need to promptly meet with a lender to begin the process. This involves filling out a mortgage application and disclosing financial details like your income, debts and credit history.

If you qualify, your lender issues a pre-approval letter signifying that you’re a serious and eligible buyer. Additionally, your lender will review the offer terms to ensure alignment with the pre-approved loan amount.

2. Wait for Seller to Review Your Offer

Next, the seller will carefully review your offer and decide whether to accept it as-is, counteroffer or reject it. They’ll consider the following:

• Offer Price: The seller evaluates the offer to see if it meets their expectations and if it reflects the current market value of the home.

• Contingencies: Common contingencies include financing, home inspection and appraisal contingencies. The seller reviews these to determine the likelihood of the sale going through without issues. Too many contingencies can hurt an offer.

• Closing Date: The seller will consider whether the closing date aligns with their timeline for moving out.

• Earnest Money: Earnest money indicates a serious buyer. This is typically a flat fee or a percentage of the purchase price. A buyer can lose this deposit if they don’t meet the contract terms.

After review, a seller might counter your offer asking for a higher price, fewer contingencies or a different closing date. From here, you decide to accept their counteroffer, make another counter or walk away.

3. Go Under Contract

Once both parties agree on terms and the seller accepts your offer, you’ll go under contract to buy the house. This means you’re now legally obligated to follow through with the purchase.

Your earnest money funds are moved to an escrow account, which is a neutral holding place for funds being applied to your down payment or closing costs.

While going under contract is a significant step in the home buying process, it’s not a done deal until all contingencies are met. Contingencies are conditions that must be fulfilled for the contract to proceed.

4. Home Inspection and Appraisal

Your contract will likely include contingencies for a home inspection and appraisal. Therefore, if an inspection reveals serious issues with the property or if the home doesn’t appraise for the agreed-upon price, you have the option to renegotiate or withdraw the contract without penalty.

5. Underwriting

The appraisal is part of underwriting the loan, but it’s not the only process. Beyond the appraisal, your lender will also conduct a title search to confirm property ownership and ensure there aren’t any outstanding liens or legal claims against the property. This is handled by a title company or real estate attorney, with the cost included in your closing fees.

Next, your lender takes a much deeper look into your financials, including your income, credit, debts, employment history and any other information needed to assess your ability to repay the loan.

During all of this, you’ll need to purchase a homeowner’s insurance policy and submit the document to your lender before closing.

It’s important to respond quickly to any requests for additional information to keep the process moving smoothly.

6. Getting the Green Light to Close

Once underwriting is complete and everything checks out, you’ll receive the green light to close. Closings typically take place at a title company or attorney’s office, and might take a couple of hours.

Here is where you’ll review and sign all loan documents, from the mortgage agreement to the property deed. You’ll need to bring a government-issued ID, a cashier’s check (or arrange a wire transfer) for your closing costs and any additional documents requested by your lender.

At the end of this meeting, you’ll receive the keys to your new home.

Ready to make an offer on your dream home? Contact the loan experts at FirstBank Mortgage to kickstart your journey today.

We’re here to help. Anytime.

Have questions? Contact us for neighborly advice.

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