|My Offer Was Accepted - Now What?|
Congratulations, after months of going to open houses, multiple offers that went nowhere, being outbid by "all cash" buyers and changing agents (more than once) your offer was finally accepted. Now what?
First off, you will be inundated by paperwork much of which will seem to be either repetitive or contradictory. You'll also start hearing a lot of new terminology and jargon. You'll be doing inspections and start to learn a whole lot about what is in the house. And if you are like most home buyers most likely you'll get "buyer's remorse" or something very similar.
Sounds like fun, right? Let's jump in for a deeper dive.
As I explain to my buyer clients there are 3 tracks moving forward simultaneously in a home purchase" real estate, escrow, and loan (assuming you are not paying all cash). In the real estate realm you have things like seller disclosures, inspections, negotiating repairs, removing contingencies and other contract obligations.
Escrow refers to the technical performance of the exchange of funds and certain documents such as deeds that are described in the purchase contract (offer) you juts had accepted. The loan is your mortgage obligation, appraisal and other items needed by the lender in order to meet their regulatory requirements and fund.
There are points of over lap in these three tracks and they all come together at the closing.
Let's first look at "Real Estate" time which is not the same as real time by any stretch of the imagination.
All timelines are triggered by the day of acceptance which becomes day zero as we start counting days after. Because Realtors work 7 days a week, well I do anyway, we count every calendar day after acceptance with a few exceptions. One is for your Earnest Money Deposit (EMD) to get to escrow. That needs to be in no later than 3 business days after acceptance. So, if your offer was accepted on Monday (doesn't matter what time), the EMD is due by Thursday. However if the offer was accepted on Wednesday, then 3 days after is Saturday which defaults to the next business day because escrow companies are closed on weekends.
Which covers us to our next tidbit re counting days: if the day for performance of any specific action falls on a weekend or legal holiday, then guess what? Yes, it defaults to the next business day. So an escrow that is supposed to close, based on counting days, on a Saturday will default to the next business day Monday except that our local South Bay custom is to move that to Tuesday (more on that later).
Anyway, one of the things that "happens next" is you have to get your EMD into escrow which these days is most often done by bank wire.
Within 7, 10, 17, 21 days or whatever was negotiated in the purchase contract (offer) you will have to start "removing contingencies". This is a part of the transaction that buyers really don't like because the further down this road you get the more you are locked into the deal and can't change your mind.
The first contingency to be removed is most often what Realtors refer to as the "inspection contingency" but is actually all the buyer investigations delineated in paragraph 14 B 1 of the purchase contract. Because 10 days is the local custom in Redondo Beach, you'll need to schedule your home inspection as soon as your offer is accepted.
Buyers pay for the home inspection at the time of inspection. The price is based on the size of the house but for the most part assume that the larger the house the more it will cost. Many inspectors can also inspect pools and spas and a few are also licensed for mold. Wood destroying pests, mold, chimneys are done by inspectors who specialize in those areas.
Your general inspection will "call out" a number of items. Most of them are fairly inconsequential and the condition of the house is already factored in to the price. In other words if someone just put a new Spanish tile roof on a property they will price it higher (I hope) than one with a 30 year roof in year 29.
You can make a "Request for Repairs" for items that you want fixed or a credit for. But unless your seller is desperate don't expect that 29 year old roof to be replaced with a new one unless it is leaking. The form is named "Request for Repair" for a reason and is not titled "Request for Improvements".
My advice to my buyer clients is to request (most) safety items to be fixed as well as things you would expect to work that aren't working. An example of the latter is if the furnace isn't working or the hot water isn't hot.
Speaking of which, hopefully your agent requested and the seller agreed to pay for a "Home Warranty" as part of the purchase contract. Most home warranties will replace broken water heaters, furnaces, etc during the first year of home ownership or longer if you renew them.
I'll take a breather at this point and continue this later this week or next.
The simple answer though to the question of "My offer was accepted, what happens next?" is:
Understand your timelines and dates
Get Your Earnest Money Deposit into Escrow
Schedule your Inspection