The checklist: what to do when your real estate offer is accepted

Whether you are a buyer or a seller, going through the purchase or sale of a property can be quite a hassle. Whether you are looking to purchase a house for sale in Nugegoda, a bare land for sale or even a commercial property for sale for your business, many people prefer to go through a real estate agent to avoid the headaches involved and to ensure that everything is done according to the law.

Finalising a real estate sale involves several steps, from negotiating terms to closing the deal. Here is a detailed breakdown of the process:

·         Negotiation and Offer: The process typically begins when a buyer submits an offer to purchase a property, like a coconut land for sale in Sri Lanka. This offer includes the proposed purchase price, any contingencies (such as financing or inspection), and the desired closing date. The seller can accept the offer, reject it, or make a counteroffer with different terms.

·         Acceptance of Offer: Once both parties agree on the terms of the sale, they sign a purchase agreement or sales contract. This legally binding document outlines the terms and conditions of the sale, including the purchase price, closing date, and any contingencies.

·         Earnest Money Deposit: The buyer typically provides an earnest money deposit, which demonstrates their serious intent to purchase the property. This deposit is held in escrow until closing and is usually applied towards the down payment or closing costs.

·         Due Diligence and Inspections: The buyer conducts due diligence, which may include various inspections (such as home inspection, pest inspection, and radon testing) to assess the condition of the property. If issues are discovered, the buyer may negotiate repairs or credits with the seller.

·         Appraisal: The buyer's lender typically orders an appraisal to determine the fair market value of the property. The appraisal ensures that the property's value supports the loan amount. If the appraisal comes in lower than the purchase price, the buyer may need to renegotiate with the seller or cover the difference themselves.

·         Loan Approval: The buyer's lender processes the mortgage application and underwrites the loan. This involves reviewing the buyer's creditworthiness, income, assets, and the property's appraisal. If the buyer is approved for the loan, a commitment letter is issued, confirming the lender's willingness to finance the purchase.

·         Title Search and Insurance: A title search is conducted to ensure that the property has a clear title and there are no liens or claims against it. Title insurance is also obtained to protect the buyer and lender against any unforeseen issues with the title.

·         Closing Disclosure: The lender provides the buyer with a Closing Disclosure, which details the final terms of the loan, including the interest rate, monthly payments, closing costs, and any prepaid expenses.

·         Final Walk-Through: Prior to closing, the buyer typically conducts a final walk-through of the property to ensure that it is in the agreed-upon condition and any negotiated repairs have been completed.

·         Closing: On the closing day, both parties (buyer and seller) sign all necessary documents to transfer ownership of the property. This includes the deed, loan documents, and closing disclosures. The buyer pays the remaining down payment and closing costs, and the seller receives the proceeds from the sale.

·         Recording and Possession: After closing, the deed and mortgage documents are recorded with the appropriate government office to officially transfer ownership of the property. The buyer takes possession of the property, usually on the same day as closing, unless otherwise agreed upon.

·         Post-Closing Tasks: After the sale is finalised, the buyer may need to complete additional tasks such as transferring utilities, updating mailing addresses, and arranging for homeowner's insurance.

By completing these steps, the real estate sale is finalised, and the buyer becomes the new owner of the property.

What do you need to do when your real estate offer is accepted?

When your real estate offer is accepted, it is an exciting step forward in the homebuying process. Here is what you need to do next:

·         Celebrate (but stay focused): First and foremost, congratulate yourself on having your offer accepted! It is a significant achievement in the homebuying journey. However, it is essential to remain focused as there are still several steps to complete before closing.

·         Review the Purchase Agreement: Carefully review the purchase agreement or sales contract that outlines the terms of the sale. Make sure you understand all the terms, including the purchase price, contingencies, closing date, and any other conditions.

·         Submit Earnest Money Deposit: Typically, you will need to submit an earnest money deposit to the escrow account shortly after your offer is accepted. This deposit demonstrates your serious intent to purchase the property and is usually held by a third party until closing.

·         Schedule Inspections: Arrange for any inspections outlined in the purchase agreement, such as a home inspection, pest inspection, radon testing, or any other specialised inspections you deem necessary. Inspections help you understand the condition of the property and identify any issues that may need to be addressed before closing.

·         Conduct Due Diligence: During the due diligence period, carefully review all documents related to the property, including disclosures provided by the seller, HOA documents (if applicable), property surveys, and any other relevant information. This is your opportunity to ensure that the property meets your expectations and there are no undisclosed issues.

·         Secure Financing: If you haven't already done so, continue working with your lender to finalise your mortgage application and secure financing for the purchase. Provide any additional documentation or information requested by the lender to facilitate the underwriting process.

·         Negotiate Repairs or Credits: If the inspection reveals any issues with the property, you may have the opportunity to negotiate repairs or credits with the seller. Work with your real estate agent to communicate your concerns and negotiate any necessary adjustments to the purchase agreement.

·         Finalise Mortgage Approval: Once the inspection and any negotiations are complete, continue working with your lender to finalise your mortgage approval. Provide any additional documentation or information required by the lender to satisfy the conditions of the loan.

·         Obtain Homeowners Insurance: Begin shopping for homeowners’ insurance to ensure that you have coverage in place by the closing date. Your lender will likely require proof of insurance before finalising the loan.

·         Prepare for Closing: As the closing date approaches, coordinate with your real estate agent, lender, and any other parties involved in the transaction to ensure that all necessary documents and funds are in order. Review the Closing Disclosure provided by your lender to confirm the final terms of the loan and closing costs.

This way, you will be well-prepared to navigate the process after your real estate offer is accepted and move closer to closing on your new home.