What Happens After an Offer Is Accepted on a House?

After a seller accepts your offer on a house, the property goes under contract and a structured 30 to 45 day closing process begins. During that window you deposit earnest money, complete inspections, finalize your mortgage, clear the title, sign closing documents, and take ownership. Each step carries its own deadline, and missing one can delay or cancel the deal. Here is what happens after an offer is accepted on a house, in the order you will encounter it.

Deliver the Earnest Money Deposit

Your first move after mutual signatures is delivering an earnest money deposit, a good-faith payment showing you intend to follow through. The deposit typically runs 1% to 5% of the purchase price and sits in an escrow account managed by a neutral third party, usually a title company or real estate attorney.1My Home by Freddie Mac. What Is Earnest Money and How Does It Work? On a $400,000 home, that is $4,000 to $20,000. Your contract spells out exactly how many days you have to deliver the funds after signing. Miss that deadline and the seller can treat it as a breach.

You wire the funds to the escrow agent using instructions the title company provides. Federal anti-money laundering rules require reporting detailed payment information on residential real estate transfers, including the payment method and the originating financial institution.2Federal Register. Anti-Money Laundering Regulations for Residential Real Estate Transfers Expect the escrow company to ask you to document the source of your funds before they officially open the file.

Know Your Contingencies

Contingencies are conditions in your contract that must be met before the sale can close. If one is not satisfied inside its deadline, you can usually cancel and get your earnest money back. The overall contingency period generally runs 30 to 60 days, and the common ones are:

  • Inspection contingency: time to hire a professional inspector and understand the home’s physical condition.
  • Appraisal contingency: a check that the home’s market value matches the purchase price.
  • Financing contingency: protection if your mortgage is denied, typically with a deadline about a week before closing.
  • Title contingency: verification that the seller has clear ownership and no liens or legal problems are attached.
  • Home sale contingency: time to sell your current home before you are obligated to close.
  • Homeowners insurance contingency: a requirement that you secure a policy before closing.

These are your safety net. If the inspection reveals a cracked foundation, the appraisal comes in low, or your financing falls through, the relevant contingency lets you walk away without losing your deposit. Back out for a reason not covered by a contingency, or after a contingency deadline has passed, and the seller is generally entitled to keep your earnest money. If the seller breaches, for example by failing to deliver clear title, you typically get a full refund.

Complete Inspections and Negotiate Repairs

A licensed home inspector examines the structural integrity, electrical systems, plumbing, roof, HVAC, and major appliances, then delivers a written report with photographs and descriptions of each defect. A separate pest inspector looks for wood-destroying organisms such as termites or powderpost beetles. You choose and pay for both, and you want them scheduled early in the contingency window so there is time to negotiate.

If the inspection surfaces significant problems, you enter a second round of negotiations. Three resolutions are common:

  • Ask for repairs. The seller completes the work before closing. This works best with builders or house flippers who have contractor relationships, but the seller controls who does the work and the quality.
  • Ask for a closing cost credit. The seller contributes money toward your closing costs instead of doing the work. This is the most popular path because it hands you cash to arrange repairs on your own terms after closing. Your lender will cap total seller contribution based on your loan program.
  • Ask for a price reduction. The seller lowers the purchase price by the estimated repair cost. A $10,000 price reduction on a 30-year mortgage at current rates only shaves roughly $50 to $60 off each monthly payment, so it saves less month-to-month than a credit, but it can be useful when repair costs exceed the lender’s cap on seller contributions.

If you and the seller cannot reach an agreement before the inspection contingency expires, you can terminate and recover your earnest money.

The Appraisal

Your lender orders a professional appraisal to confirm the home is worth at least what you agreed to pay. The appraiser uses a Uniform Residential Appraisal Report and compares the property against at least three similar homes that sold nearby within the past 12 months.3Fannie Mae. Comparable Sales They weigh square footage, room count, lot size, overall condition, and any safety hazards. The final figure sets the ceiling on what the lender will finance.

If the appraisal matches or exceeds your price, you move on. If it comes in low, you have four options:

  • Pay the gap in cash. You cover the difference at closing. If the home appraises at $380,000 but you offered $400,000, you bring an extra $20,000.
  • Renegotiate the price. Ask the seller to drop to the appraised value, or meet in the middle.
  • Challenge the appraisal. File a Reconsideration of Value with the lender, with evidence of comparable sales the appraiser may have missed. These requests succeed roughly a quarter of the time.
  • Walk away. If your contract includes an appraisal contingency, cancel and recover your earnest money.

Some buyers write an appraisal gap clause into their original offer, promising to cover a shortfall up to a stated limit. That makes the offer more competitive but commits you to extra cash if the appraisal falls short.

Mortgage Underwriting

While inspections and the appraisal are running, your lender’s underwriters are working through your finances. They verify income using tax returns and pay stubs, review bank statements, and check your debt-to-income ratio. For conventional loans, the maximum debt-to-income ratio is generally 50% when run through automated underwriting.4Fannie Mae. Debt-to-Income Ratios

Any bank deposit larger than 50% of your total monthly qualifying income will draw extra scrutiny. The lender must document that the funds came from an acceptable source: a written explanation, proof of an asset sale, or a gift letter from a family member.5Fannie Mae. Depository Accounts Clearly identifiable deposits, such as direct payroll or a tax refund, do not need extra explanation.

If your down payment is less than 20%, your lender will require private mortgage insurance, which you pay monthly until you build 20% equity in the home.6My Home by Freddie Mac. Down Payments and PMI

What Not to Do Between Contract and Closing

The pending period is financially fragile. Your lender verifies employment at least twice, once during initial underwriting and again within 10 business days of your closing date.7Fannie Mae. Verbal Verification of Employment Any disruption between those two checks can delay or kill the deal. Avoid:

  • Changing jobs. Switching employers, especially to a different industry or a commission-based role, can force the lender to pause and request more documentation. Quitting or being laid off before closing can result in a denial even after everything else was approved.
  • Opening new credit accounts. Applying for a credit card, auto loan, or student loan refinance during underwriting changes your debt-to-income ratio and triggers a new credit inquiry. Save those applications for after closing.
  • Making large undocumented deposits. Moving money between accounts or receiving cash gifts without a clear paper trail creates sourcing headaches that can stall the closing.

Title Search and Title Insurance

A title company searches public land records to confirm the seller has clear ownership. The search uncovers outstanding liens from unpaid taxes, contractor disputes, or existing mortgages that must be paid off before the sale. It also surfaces encumbrances like utility easements or use restrictions. If the search turns up an ownership dispute from a previous heir or an improperly recorded deed, those issues must be resolved before closing proceeds.

Once title is cleared, you decide on title insurance. There are two kinds:

  • Lender’s title insurance. Most lenders require this policy, which protects the lender’s financial interest if a title defect surfaces after closing.8Consumer Financial Protection Bureau. What Is Owners Title Insurance?
  • Owner’s title insurance. This optional policy protects you if someone later claims a legal right to the property from before you bought it, whether from a previous owner’s unpaid taxes, contractor liens, or undisclosed heirs.8Consumer Financial Protection Bureau. What Is Owners Title Insurance?

You pay for both policies at closing with a one-time premium. The lender’s policy is non-negotiable; the owner’s policy is your choice. Title defects can surface years after a sale, so many buyers treat the owner’s policy as worth the cost.

Required Disclosures and Homeowners Insurance

If the home was built before 1978, federal law requires the seller to disclose any known lead-based paint or lead-based paint hazards before you are bound by the contract, provide any available records or reports, and give you an EPA-approved lead hazard information pamphlet. You are entitled to at least a 10-day window to conduct your own lead inspection or risk assessment, though you and the seller can agree in writing to a different timeframe or waive the inspection entirely.9eCFR. 24 CFR Part 35 Subpart A – Disclosure of Known Lead-Based Paint Hazards Upon Sale or Lease of Residential Property

Your lender will also require proof of homeowners insurance before funding. You need to shop a policy and provide an insurance binder, a letter from your insurer confirming coverage and noting the lender’s interest, before the closing date. Without it, the lender will not release funds and closing will be delayed. Start comparing quotes early so you are not scrambling at the last minute.

Review the Closing Disclosure

Federal law requires your lender to deliver a Closing Disclosure at least three business days before your closing date.10eCFR. 12 CFR 1026.19 – Certain Mortgage and Variable-Rate Transactions The form lists your final loan terms, projected monthly payments, and an itemized breakdown of every closing cost, including lender fees, title charges, taxes, and prepaid items like homeowners insurance.11Consumer Financial Protection Bureau. 12 CFR 1026.38 – Content of Disclosures for Certain Mortgage Transactions (Closing Disclosure) Compare it carefully against the Loan Estimate you received when you first applied. If anything looks off, call your lender immediately. Certain changes, like an increase in your annual percentage rate, can trigger a new three-day waiting period.

Total closing costs, apart from your down payment, typically run 2% to 5% of the purchase price.12Consumer Financial Protection Bureau. Determine Your Down Payment On a $400,000 home that is $8,000 to $20,000, covering origination charges, title insurance premiums, recording fees, and prepaid property taxes.

Guard Against Wire Fraud

Real estate wire fraud is one of the most common scams in the closing process. Criminals hack email accounts and send buyers fake wiring instructions that redirect closing funds to a fraudulent account. Protect yourself:

  • Get wiring instructions directly from the title company in person when you can.
  • If instructions arrive by email, confirm them by phone using a number you already have on file, not a number from the email.
  • Treat last-minute changes to wiring instructions as suspicious. Title companies and lenders have established processes that do not shift suddenly.
  • Call the title company right after wiring to confirm receipt.

Never wire money without independently verifying the instructions with a trusted source.

The Final Walkthrough

A day or two before closing, you walk through the property one more time. The visit confirms the seller has moved out, agreed-upon repairs are complete, and nothing new has broken since the inspection. Check that all appliances and fixtures listed in the contract are still in place. Run water, flip light switches, test the major systems. If something is wrong, raise it with your agent before you sit down to sign.

Closing Day

On closing day, everyone meets at the title company’s office, or an attorney’s office depending on your state, to sign the final documents. You sign the mortgage note, which creates your legal obligation to repay the lender, and the deed, which transfers ownership from the seller to you. A notary public verifies the identity of everyone signing. You bring your closing funds by verified wire transfer or cashier’s check made payable to the escrow company. Personal checks are not accepted for the final balance.

After signing, the title company submits the deed to the county recorder’s office. Recording creates a public record of your ownership and protects your legal interest in the property. When you get the keys depends on what your contract specifies. Some buyers take possession immediately after recording; others wait until the next business day. Once the deed is recorded and funds are disbursed to the seller, the home is yours.