What happens after your offer is accepted?
Sometimes it is a long road to getting an offer accepted. When I first became a Realtor, in Kitchener-Waterloo it used to be that selling a home was more difficult than buying a home. That’s no longer true. Although the market is slowly moving towards equilibrium, prices are still raising and inventory levels around the region are still much below our historic averages. In short, we still have a Seller’s Market.
That aside, finding and buying a great home isn’t too too difficult. You just have to know what you want and when it comes onto the market, to buy it. It might take a few weeks or it might take longer, but let’s say you’ve found a great home and offered, negotiated and now your offer is accepted. What happens next?
After your offer is accepted
After your offer to purchase has been accepted, the first action item is for the buyer to prepare a cheque made out to the seller’s brokerage. The amount of the cheque can be as little as $5,000 or as much as $50,000 (or more in cases where you are buying from a builder). In Waterloo Region, the amount is typically $10,000 to $20,000 depending on the value of the home being purchased.
The amount of the deposit is noted in the Realtor notes of an MLS listing. It is not normally a negotiated amount.
It is still most common here, for brokerages to accept personal cheques. Requiring money orders and certified cheques is getting more and more common.
It is unusual for local Realtors to request the deposit with the offer. We normally ask that the deposit is delivered to the brokerage upon acceptance of the offer. The text in the offer agreement allows 24 hours for the cheque to be delivered.
The buyer can deliver it but normally his/her Realtor will pick up and deliver the cheque and get a receipt.
The deposit will be put into the listing brokerage’s trust account. It will eventually go towards the down payment of the home upon closing.
If this is a conditional sale and one or more of the conditions are not met, then the deposit will be returned in full. That usually takes a few days but can take a couple of weeks as the cheque has to clear the banks.
2. Conditions after acceptance
There are lots of conditions that can be put into an offer to purchase. The most common conditions allow about a week for the buyer to secure a mortgage and do an inspection. A condo purchase will be conditional upon the buyer’s lawyer reviewing the status certificate.
The conditions have to be met or waved before the agreement becomes firm and binding. Dates and times are very important in real estate contracts. Most conditions are written in such a way that if not met by a specified time and date the offer becomes null and void. So, it is important not only to waive or fulfill the conditions in the allowed time but also to have both side sign and initial that the conditions were met or removed from the agreement.
Note: In the case of a new home purchase it is more common for the contract to default to ‘firm and binding’ rather than ‘null and void’ at the end of the conditional period. Be clear on how conditions are deal with in your agreement.
3. Bank appraisal
A mortgage isn’t really your money. It’s the banks. As such, the bank may want to ensure that you didn’t pay too much for the home. An appraisal is often often requested by the bank. As the buyer, you don’t have to be there for that. The agents will arrange for the bank appraiser to visit the property if he/she so wishes.
4. Title search
About a week or so before closing, the buyer’s lawyer will preform a title search on the property ensure that the sellers are allowed to sell the property and that there aren’t any liens against the property.
5. Walk through
A day or two before closing, the buyers with their agent will do a final inspection of the property to ensure that it is in the same condition that it was when purchased. This inspection is usually referred to as a final walkthrough. Besides establishing that the home is swept clean and free of the seller’s belongings, they will check to make sure the chattels and fixtures are still on site and in good working order.
6. Lawyer meeting
Usually a day or two before closing the buyers will meet with their lawyer to review and sign paperwork. This meeting often takes up to an hour.
7. Closing day
On closing day, once the funds have been transferred you will be contacted by your lawyer and asked to drop by his/her office and pick up your house keys.