What Happens After I Sign a Real Estate Contract?
After you sign a real estate contract, several important steps and processes will typically follow. Keep in mind that real estate transactions can vary by location and specific circumstances, so it's essential to consult with a real estate professional or attorney who can guide you through the process specific to your situation. However, here is a general overview of what typically happens after signing a real estate contract:
Earnest Money Deposit: After signing the contract, you may be required to provide an earnest money deposit, which is a sum of money that demonstrates your serious intent to purchase the property. This money is held in an escrow account until the closing.
Home Inspection: Most contracts include a provision for a home inspection. You'll need to schedule a home inspection within the timeframe specified in the contract. The inspection allows you to identify any potential issues with the property's condition. If significant issues are found, you may have the opportunity to negotiate repairs or request a reduction in the sale price.
Financing Approval: If you're obtaining a mortgage to purchase the property, you'll need to apply for a loan and work with your lender to secure financing. The lender will require various documents, such as income verification and an appraisal of the property.
Appraisal: The lender will typically order an appraisal to assess the property's value. The appraisal is important because it determines whether the property's value supports the loan amount you're seeking.
Title Search and Title Insurance: A title search is conducted to ensure that the property's title is clear of any liens, encumbrances, or other issues. Title insurance may also be obtained to protect against any unforeseen title issues.
Contingencies and Addendums: Depending on the contract's terms, there may be additional contingencies and addendums to address specific conditions or requirements. These could include the sale of your existing home, repairs requested after the inspection, or other stipulations.
Closing Costs: Prior to closing, you'll receive a closing disclosure that outlines all closing costs and fees you'll need to pay. These costs can include title fees, escrow fees, lender fees, and more.
Final Walk-Through: Before the closing, it's common for the buyer to conduct a final walk-through of the property to ensure it's in the agreed-upon condition and that any repairs or improvements have been completed.
Closing Date: The contract will specify a closing date, which is when the final steps of the transaction occur. On this day, both the buyer and seller meet to sign all necessary documents, and ownership of the property is officially transferred. At the closing, you'll sign various legal documents, including the deed, mortgage note, and other financial agreements. You'll also provide the remaining funds needed for the purchase.
Possession: You'll receive possession of the property on the closing date or as agreed upon in the contract. Once all documents are signed, the seller will transfer the property's keys and possession to you.
Recording: After the closing, the deed and mortgage are typically recorded with the appropriate government office to officially transfer ownership and establish the mortgage lien.
Remember that real estate transactions can be complex, and it's crucial to work closely with real estate agents, attorneys, lenders, and other professionals to ensure a smooth process and protect your interests throughout the transaction.
