When a buyer’s offer is accepted, the first thing that happens is that they open up escrow. The buyer has three days to make their deposit into the escrow account either by cashier’s check or by wire. This deposit can be any amount, but it’s typically 3% of the purchase price.
The seller might think that because the deposit is in, it’s theirs to keep, but that’s a misunderstanding. At this point, the sellers have seven days to get their disclosures delivered to the buyer. A seller’s disclosure is a report of anything that has happened to the property in the past that might affect a buyer’s decision to purchase the property.
The buyer also has 17 days to complete a home inspection; we prefer to do the inspection after the disclosures have been released so that we know if something has been or needs to be repaired. The inspection period isn’t just about inspecting the house itself, but also the title report, HOA disclosures, and any associated documents that involve the house.
The buyer also has 17 days to get an appraisal done on the home. The buyer’s lender will request that the home get an estimate from the bank that’s lending the money for the home purchase.
On the 21st day, the buyer’s loan contingency is up, meaning that the buyer will need to be fully approved by their lender by that point.
Now, the inspection, appraisal, and loan contingencies are there to protect a buyer’s deposit. If the buyer backs out of the deal before those 21 days are up, they’ll get their deposit back. However, if the buyer tries to back out of the deal after those 21 days, the seller gets to keep the deposit.
Finally, on day 30, the buyer and seller have reached the title and escrow phase of the process. At this point, the buyer receives the title, the seller receives their money, and the buyer becomes the owner of the property.
This has been an outline of the standard process, but because everything in real estate is negotiable and certain market conditions may cause the transaction to move in a timeline, each individual transaction will work a bit differently.
If you have any questions or need assistance with your real estate needs, reach out to us. We want to be your go-to agency for all things real estate. Hope to hear from you soon!