- Getting an offer on a house is exciting, but it’s not necessarily a guarantee that your house will sell.
- You’ll need to review and respond to the offer.
- The buyer may make the offer contingent on an appraisal, inspection, financing, and other conditions.
When you are selling your home, getting an offer is exciting. An offer means someone has expressed serious interest in buying your property.
But while you may be counting the days until you can get your check, pay off your mortgage, and move on to your next adventure, it’s important to know exactly what to expect in the aftermath of an offer coming in.
In most cases, once you’ve accepted an offer, you stand a good chance of actually moving forward with the home closing. In fact, older data shows that 96.1% of real estate contracts are successful, with those interested in buying a home actually ending up closing on it. But there’s no guarantee this will happen in every situation.
It’s helpful to understand the post-offer process so you’ll be able to anticipate potential pitfalls and do all you can to get your home to closing and walk away with plenty of money to deposit in your savings account or use for the down payment on your next home.
You’ll need to respond to the offer by the deadline
When potential home buyers submit an offer, they will usually include a deadline by which you have to respond. If you don’t sign by that time limit, technically the offer is null and void. This doesn’t necessarily mean the buyer wouldn’t be able to submit another one — but, unless there’s a good reason to delay (like waiting for other potential offers to come in), making the deadline is usually a smart move.
When you respond, you can accept the offer if you’re satisfied with it. You can reject it if it’s far less than you’re hoping for and don’t want to bother to negotiate. Or you can counteroffer. Your counteroffer could include details like a request for more money or a change to the closing date or some other terms you’d find more favorable.
If you send back a counteroffer, the potential buyers have the opportunity to accept or negotiate back with a proposal of their own. Hopefully, you will ultimately be able to find consensus and move forward with a signed offer. When you do, the status of your house will be changed to “Pending” in the multiple listing service (the widely used database of homes for sale).
The buyer will make a deposit
Once both you and the buyers have agreed on the contract terms and signed the buy/sell agreement, the buyer will usually have a set period of time to make an earnest money deposit. This essentially shows they are serious about moving forward.
The buyer could get this deposit back if they walk away for a valid reason as outlined by the contract. But if they don’t and just change their minds without justification, then the deposit would not be returned to them.
Typically, the title company, lawyer, or closing agent will be in charge of keeping this deposit in an escrow account.
The buyer will have a chance to do their due diligence
Most offers to buy property include clauses giving buyers a period of time to do their due diligence. This means they have time to do things like get an inspection, appraisal, and survey to make sure there are no unexpected issues that exist.
This process usually takes a few weeks, although it depends on the timeline specified in the offer agreement.
The buyer will ideally release any contingencies
Buyers also generally make the purchase of the home contingent upon — conditioned on — certain things happening. For example, if they are borrowing to buy, they may make the sale contingent on an appraisal showing it’s worth what they are paying for it and contingent on them securing financing.
Sometimes, buyers will include other contingencies in an offer. They might make buying your home contingent on the sale of their current house. The more contingencies there are, the more chances of the deal falling apart though, so be wary of accepting an offer with lots of pre-conditions.
If all goes well during the due diligence period, the buyer will release the contingencies and the sale will move forward.
Your closing will be scheduled and you’ll get your money
Finally, your closing will occur on the agreed-upon date. The buyers will produce the funds and you will get whatever’s left after paying off your mortgage loan and closing costs, including real estate commissions, taxes, and transfer fees.
This process can take weeks or even months, depending on the terms the buyer proposes for closing and whether they are securing financing. So be prepared to be patient. At the end, hopefully your sale will close and you’ll be able to move on to the next phase of life.