“If your offer is accepted, the sale process begins, a deposit is made within three days, and inspections and appraisal are typically completed within 17 days,” says broker Brandon Brown. “Loan approval is then completed before 21 days, with the closing of the property happening around day 30.”
Other interested buyers will make backup offers in case the first offer falls through. After your offer has been accepted, you're officially in the homestretch of the buying process. Once the purchase agreement is signed, it becomes legally binding.
The typical response time for a seller after receiving an offer is 24-72 hours. However, it could take longer, depending on market conditions and other factors. Sellers want time to thoroughly review an offer's details, get feedback from their agent, and potentially wait to see if other competitive offers come in.
A closing date is established
Your purchase offer will include a date by which the deal needs to be completed. In most cases this is within 30 to 60 days after the offer is accepted. The closing date is when you sign paperwork and take ownership of the home.
Some buyers may be able to negotiate an immediate possession date. This means as soon as the transaction is closed and the deed is recorded, the buyer can move in. A few other common buyer possession dates may be 15 days, 30 days, 60 days, or even 90 days after closing, depending on how much time the seller needs.
The short answer is yes, a buyer is free to withdraw their offer at any time. However, depending on the contract, there may be penalties for doing so. Many purchase agreements typically include various contingencies meant to protect both parties from a deal that has gone wrong.
Once your offer is accepted, the sale contract and purchase agreement will be updated to reflect any negotiated terms, and you and the seller will sign it. This is called “going under contract,” meaning both parties have agreed to proceed with the transaction.
The rule of thumb is usually between 5 and 10 percent of the home price. Bear in mind that you could lose the money if the deal falls through, so it's important not to put up so much that you'd be ruined if you lost the cash.
Is Earnest Money Refundable? Earnest money isn't always refundable. The good news for buyers is in most situations, as long as a buyer acts in good faith, earnest money is refundable. As long as any contract agreements are not broken or decision deadlines are met, buyers usually get their earnest money back.
The inspection typically occurs 7 – 10 days after the offer is accepted, and allows the home buyer and inspector a chance to privately view the home. As the seller is not present for the inspection, you'll have a few tasks that must be completed in preparation for the home inspection.
California law, on the other hand, limits the amount of earnest money that can go to a seller should the deal fall through to 3% of the purchase price. There are some exceptions, Stuart says, but this law makes it so few earnest money deposits exceed 3% in the Golden State.
The timeline between making an offer and closing a sale can vary. For home purchases financed with mortgages, the average time to close is 44 days, according to ICE Mortgage Technologies, a mortgage advisory and technology platform. Closings can be as quick as 30 days, though, especially in all-cash deals.
Counteroffer from the Seller
Receiving a counteroffer means the seller is interested but wants to negotiate the terms. It's one of the most direct signs of offer acceptance.
After an accepted offer to buy a home – the first thing you will have to do is to wire an earnest money deposit to escrow. This amount will stay in escrow until the transaction concludes. The earnest money deposit is not an extra amount you pay to enter escrow, it applies to the purchase price at closing.
You'll proceed to the home inspection, financing approval, and closing on the scheduled date. The closing, or completion day, is when you sign the final paperwork, get the keys, and the property is legally yours! It typically takes 4 to 6 weeks from an accepted offer to close, so start planning your move.
Most sellers hope to have multiple offers, but sometimes it's best to take the first offer you receive. It may be tempting to hold out for a better price when selling your home, especially when your home is newly listed.
Settlement costs (also known as closing costs) are the fees that the buyer and/or seller have to pay to complete the sale of the property. Depending on the lender, these may include origination fees, credit report fees, and appraisal fees, as well as property taxes and recording fees.
Here are the elements that make up a very strong offer: Highest offer of all buyers. Offers short contingency periods. All-cash buyer. Down payment of at least 20% of the purchase price.
Appraisal
Once you have cleared the inspection process, let your lender know. They will order a home appraisal to verify that the value of the home you're purchasing is worth the loan amount. In California, buyers have 17 days to complete the appraisal, starting from the day it was ordered.
Legally speaking, there isn't a time frame for sellers to respond to your offer. However, it's an unspoken rule in the industry that sellers and/or the listing agents should respond within a few days, with 48 hours as the norm.
A buyer can back out of a home purchase even after signing a contract if all agreed-upon contingencies are not met. Common reasons for buyers to back out include issues revealed during a home inspection and problems with financing. Having a backup offer in place can help soften the blow in case a deal falls through.
You will likely have forfeited your earnest money if you change your mind after removing your contingencies. However, in the state of California, a buyer must remove their contingencies by completing a contingency removal form.
If the buyer changes their mind for a reason that is not covered by a contingency, they may forfeit their earnest money deposit. For example, if the buyer simply decides they do not want to purchase the home, they will likely lose their earnest money deposit.
Here's some good news: Backing out of a contract won't directly affect your credit score, because terminating a purchase contract isn't reported to credit bureaus.