No matter what side of the real estate coin you happen to be on, knowing what happens after an offer has been accepted is important.
Both buyers and sellers will want to make sure that the deal continues smoothly right up until closing.
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While a lot has happened just to get to the offer stage, there's still plenty of work to be done after the offer is accepted.
But, what exactly happens after the offer is accepted? Read on for all the details...
A Deposit Is Provided By The Buyer
There are several terms in a real estate contract besides the price, and the deposit is one of them. Buyers will offer a certain amount of money in the form of a deposit as a promise to the seller that they are financially capable and ready to commit to buying the home.
The bigger the deposit amount, the more attractive the offer will be to the seller.
Once the offer has been accepted, the buyer must submit the deposit in the form of a certified cheque or money order within 24 hours of offer acceptance. The funds will typically be deposited in an account with the listing brokerage and will go towards the down payment of the home if all goes well and the deal closes.
Conditions Must Be Met Or Waived
There're dozens of different conditions that a real estate offer can have, which can be included both by the buyer or seller.
Unless a purchase agreement is free of any conditions when an offer is accepted - which in this case would mean the deal is "firm" - conditions make a sale "conditional." This simply means that the deal cannot be completed until all conditions that are part of the offer have either been fulfilled or waived by their respective expiry dates.
Each condition will specify the exact date and time that they must be completed or waived by. Even after the conditions are fulfilled, the notification must be given in writing to all parties involved informing them of their completion before the due date and time.
READ: Everything Buyers Need To Know About Buying Pre-Construction Condos
Some of the more common conditions that you'll see on real estate deals include the following:
Financing - Buyers will typically want to have some time to apply for a mortgage and make sure they're able to secure one before committing to a major purchase.
Home inspection - Buyers will also usually like to have the home inspected by a professional before agreeing to go through with a deal.
Status Certificate - If the property in question is a condominium, buyers will want to be able to have their lawyer look over the condo's Status Certificate to make sure it's in good financial standing.
Conditions can also be waived, which means they won't be fulfilled but won't be part of the deal any longer. Again, if this happens, written notification must be provided before the expiry date of the condition comes and goes.
If all conditions are either fulfilled or waived on time, the deal can carry on. If not, the deal will be in jeopardy of falling through.
The Home Is Appraised
As part of the mortgage approval process, the buyer's lender will usually want to have the subject property appraised to verify its current market value. Knowing what the home is valued at will give the lender a better understanding of how big of a loan the buyer can get approved for.
More specifically, the lender will want to make sure that the home's appraised value is roughly the same as what the buyer agreed to pay for it. If the sale price is well over the appraised value, that could pose a problem for the buyer and may lead to a rejected mortgage application.
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A Title Search Will Take Place
To make sure that the sellers are legally allowed to sell the home, or to find out if there are any liens on the property, a title search will be conducted. If there is a problem with the title, it will have to be resolved before the deal can proceed.
A Final Walk-Through Will Take Place
Buyers will typically have an opportunity to do a final walk-through of the home before the closing date to make sure that it's in the same condition as it was before the offer was made. It will also give buyers a chance to verify whether that all items included in the sale remain on the premises, and that all other items that should be removed are no longer there.
Buyers should include a final walk-through condition in their contracts to make sure they're not denied this opportunity to visit the home before closing.
A Meeting With Lawyers Will Occur
Once all the above-mentioned activities have taken place, both the buyer and seller will meet with their respective attorneys to sign off on all the necessary paperwork to close the deal. The buyer will then get the keys to their new home!
