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From offer to closing—5 home buying steps to know


Individuals 04.09.2021 5 MIN

This article was originally published on marcus.com.

 

Having your offer on a home accepted is big step forward—but you’re not ready to move in just yet. Here are some additional steps you need to take between putting down an offer and closing before you can officially call the new house your home.

1. Make an offer and set terms

The price the seller is asking could be what you’re willing to pay, but there could be some wiggle room that will let you pay less. However, in a competitive market, you could also end up paying more. Your real estate agent can help you with negotiations, but here are some terms you need to know going into these conversations.

Purchase price. The purchase price is what you’re willing to pay to buy the home. If you want a better idea of how much you should offer, you can consult your agent or research comparable properties in the area, also known as “comps,” that have recently sold.

Earnest money. Earnest money is a deposit that you submit with your purchase offer. It isn’t legally required, but it is pretty common and shows sellers you’re serious about moving forward. Ask your realtor and the selling agent beforehand about how much the home seller may expect in earnest money. You will also want to ask your agent about what will happen to your earnest money if the deal falls through—it’s possible to get the money back, but it will depend on the contract.

For example, a contract could say the seller gets to keep the money if the buyer changes their mind for reasons other than the seller’s refusal to make improvements needed after a home inspection. The contract could also protect the buyer and require the seller to return the money under certain conditions. If the sale does go through, the earnest money is usually applied to the closing costs or down payment.

Contingencies. These are conditions that should be met before the transaction can continue. For example, you could stipulate that the offer is contingent on your ability to secure full loan approval or that the property must pass all home inspections. 

In addition to these highlights, you’ll also want to read the fine print of any homebuying offer and contract. Ask a real estate attorney or your realtor to walk you through any unfamiliar terms.

If the seller accepts your offer, then you’ll enter into a contract to buy the home.
 

2. Get the home inspected for any necessary repairs

Once you're under contract, it's time to carry on with property inspections. You may feel like you want to skip this, and the seller may even say the house is being sold as-is and they won’t make any changes. However, it’s generally worth having one done because an inspection can give you an understanding of the home's overall condition and help you identify any potentially costly changes you or the seller will have to make.

Some of the things inspectors will be looking for are:

  • Health and safety concerns like asbestos and lead paint
  • Visible signs of damage or defects, including water damage, structural issues, roof damage, plumbing or electrical problems
  • HVAC condition


If the inspector finds problems—big or small—then, you have the opportunity to ask the seller to pay for or repair them. You’ll be able to cancel the contract to buy the home if you have an inspection contingency in your purchase contract and the seller doesn’t agree to address issues.

Your real estate agent may be able to recommend a home inspector. You could also check online reviews for home inspectors in your area. Not all states require inspectors to be licensed, so it's smart to do some research before hiring one to ensure they have the proper training and expertise.
 

3. Secure your full loan approval

As your inspections are taking place, work with your lender to secure financing for your new home loan. During this process, you'll usually be asked for items like pay stubs, employment history, W-2s and bank and savings statements. It’s best to prepare these documents as early as possible. Submit all the documents to your lender as they’re requested to ensure your loan stays on track.
 

4. Get ready for closing

After you’ve secured a full loan approval, you’re in the home stretch. You can get ready for closing day.

Here are some dates to keep in mind:

About a week before closing

Contact your lender or closing agent to find out how you will receive your Closing Disclosure. This will lay out your final loan terms and payments. It will also detail the funds you owe on closing day for the down payment and closing costs.

Talk to your closing team to find out how you'll need to pay for these—typically, a certified check is required, though a wire transfer may be acceptable. Take the time to carefully read the Closing Disclosure and ask your lender, personal real estate attorney or agent any questions you have.

At least three business days before closing

By law, you should receive the Closing Disclosure at least three business days before closing.
 

5. Perform a final walk-through

There’s just one last step before you sign on the dotted line: Complete a final walk-through of the property. This is to confirm that any agreed-upon repairs have been made and that any items you negotiated in the purchase contract for the seller to leave (such as appliances, window coverings and light fixtures) are still in place.

A tip we’ve seen: Bring your real estate agent. They can be a witness to the walk-through and answer any questions that might arise. If something is off, they'll be able to contact the listing agent to get it settled before you close on the home.

Good to go? Take a victory lap.

Then, make plans to change those locks.

 

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