9. Offer Accepted….Now What?
Now it’s Our Turn
This is where your preparation pays off. I trust that you’ve chosen well, and have an amazing home buying team.
If you have all of the most recent documents to your lender already, then you’re well on your way.
If your loan officer and agent have been communicating, then they are probably already working on the next steps.
Once your offer gets accepted, a lot of things are happening simultaneously.
You are now ready to enter into the escrow process. Escrow is a neutral third party that helps to organize the requirements and money of all parties until all parties are satisfied that guidelines have been met.
If you are on the West Coast, this is handled by an escrow company. It is more common on the East Coast for this part of the process to be handled by Attorneys and the Title Company.
Your earnest money deposit is deposited into the escrow company’s trust account within 3 days of having your offer accepted.
The Contingency Period
Your real estate agent should have explained to you what a contingency period is. If not, it’s a number of days that you have to meet certain milestones in the purchase process.
These milestones are most often related to the your inspections, and appraisal, and then the loan contingency removal after final underwriting clearance.
The default loan contingency period on a Residential Purchase Agreement (RPA) is 21 Days and must be physically signed off by you, the buyer before removed. If you do not sign off on the Contingency Period, it will stay enforced until close of escrow.
You may have two contingencies for your home buying team to keep track of. You also may have an earlier inspection contingency before your loan contingency is due for removal. 7 to 14 days is normal, with 7 being on the aggressive side.
21 Days should be no problem. If you do encounter delays or a lack of communication during this first 2 week + period, there may be something wrong.
In many cases, the Lender has over promised without actually Pre-Approving the buyer. It is important that you are able to provide any additional information if and when it is asked for to ensure a smooth Home Buying Process.
In other cases, lending is just a lot more complicated than it’s ever been. If you have any unique nuances to your pre-approval, it could cause delays and put pressure on your team to meet these deadlines.
Getting a Second Opinion
It’s important that you closely follow the requests from your loan officer and agent. It’s ok to follow your gut feeling on this.
Expect that things don’t always go as planned during the Home Buying Process, the level of communication is what will trigger that something is going wrong.
Mistakes, on the Lender’s part, are usually accompanied by very slow, if any, communication with Loan Officer.
It’s ok to get a second opinion if you feel that your Home Buying Team is not communicating well or making themselves accessible through technology or mobile.
If there is one of your Home Buying Team that you clicked best with, ask their opinion. Many times, anxieties are so high that it’s easy to get surprised at things that we have control over or we don’t.
Many Moving Parts
There are many moving parts once your offer is accepted. Let’s take a look at one example of a typical purchase:
- Communication between the Home Buyer Agent and the Home Seller Agent during the process
- Communicating between the Home Buyer Agent and the Loan Officer
- Communicating between the Home Buyer and the Buyer’s Agent, Loan Officer and Escrow Company
- Inspections are scheduled and conducted.
- Results go back to Lender, Real Estate Agents, and interested parties for submission to the underwriter.
- Contingency Period Waived | Process winds down to final days and increases pressure for everything to go smoothly.
- The lender gets final approval on both Home Buyer and Subject Property and Loan Documents are ready to be signed.
- A Traveling Notary will contact you to sign your loan documents at a place of your choosing, or you may be welcome to meet the Notary Public at either the Loan Officer or Real Estate Agent’s office.
- Signed and Notarized Loan Documents are returned to Escrow and Lender for final sign off and set up to Fund
- After your Loan Funds, you should know when the Title Recording takes place. This is usually the same or the next day.
- The recording is confirmed and CONGRATULATIONS! You get your keys, you’re a Homeowner!
Many of these steps are happening simultaneously. The rest of the steps make for pretty quiet days while awaiting a decision, or delivery, or an inspection. There is a lot of “hurry up and wait” that happens over the next 30 days.
It is not uncommon for there to be stumbles along the way. It’s how your Home Buying Team handles the situation that shows you the true level of the expertise of your Team.
Many of these steps are happening simultaneously. The rest of the steps make for pretty quiet days while awaiting a decision, or delivery, or an inspection.
What’s the Worst That Could Happen?
The worst that can happen is you have to find another home. How can this happen? Any one of a hundred ways, really.
It could be your decision because an inspection revealed a problem. It could happen if the appraised value comes in lower than the sales price, which is not uncommon in today’s market. In this case, the seller needs to either lower the sales price, or you come in with more money or something in between.
There are a lot of reasons why an escrow can fall out. it’s not something to be worried about. If it happens, it’s either in your control, or it’s out of your control. Either way, there’s something else out there even better!