We've been discussing Offers: Making them, backing out of them, and todays discussion: What happens after your offer is accepted?
Once a seller accepts your offer, there are a series of due diligence steps that should be taken. A good real estate agent will walk you through all of these steps as your buyer agent but for the sake of sharing 'Wisdom on this Wednesday' and to better prepare you for any future transactions.
First things first: Earnest Money. You agreed on a certain percentage (or dollar amount) of money to put down in good faith with your offer but most real estate agents will want you to wait and turn in the earnest money until after an offer is accepted. You will want to do this right away, at minimum whenever your contract says.
Next, and just as importantly, you need to ensure the home you're buying is exactly what you signed up for. The way this is typically done is by hiring a home inspector, which is a licensed professional who checks the house for any unseen, unexpected, or potential issues and gives you peace of mind about the property condition. The good home inspector will check out the roof, foundation, electrical system, HVAC system & plumbing. If the home has a septic system, it's also a good idea to pay for a septic inspection that scopes out the system with cameras to look for any potential issues. In Indiana, it's also recommended that buyers have Radon Testing and Termite Inspections (but these are NOT required by law; unless you are applying for a VA or FHA Loan, then most likely the termite & pest inspection WILL be required.
Additionally, if you are taking out a mortgage for the home, your lender will also require an appraisal. Whereas, Inspections determine the condition of the home & it's major systems; appraisals determine if your potential home's worth is equal to the agreed upon price.
After inspections and appraisals, you'll have a chance to go back to the negotiating table if something unexpected pops up. (If issues arise from inspections, you may be able to negotiate a lower price, ask the seller to make repairs or even ask for repair credits to be given at closing. If the appraisal comes back low, it's a little more tricky- because you'll either need to renegotiate the price with the seller to match what the bank is willing to pay, or come up with a bigger down payment for the difference.
Experienced & honest Real Estate Agents, like ours here at Starr, can usually tell if a house's condition is going to pass inspection or if the appraisal is going to come back on target BEFORE you submit your offer-- they aren't telling you the sometimes bad news to sway you away from a property, they are telling you this to prevent a potential hiccups, and even heartbreak, down the road.
Buying a house is an involved and time-consuming process, but it doesn't have to be overwhelming. If you know what steps to prepare for and have the right agent by your side, you'll find the perfect home in your price range in no time at all.