After the Offer Is Accepted

What Happens Next . . .

• An executed copy of the purchase agreement is delivered to the escrow holder and escrow is opened.
• The buyer delivers the earnest money deposit to the escrow holder via wire transfer, cashier's check or personal check.
• The escrow holder prepares buyer's opening package consisting of escrow instructions, vesting worksheet, personal information sheet and other documents.
• The escrow holder orders the preliminary title report and natural hazard disclosure report.
• The buyer submits a loan application and all documents that the lender requires.
• The buyer receives the Transfer Disclosure Statement and other seller disclosures.
• The buyer schedules the home inspection, termite inspection and other specialized inspections (i.e. roof, chimney, sewer pipes etc.) that the buyer deems necessary or desirable.
• The buyer investigates all aspects of the home and whether it is suitable for his or her intended use. Among other things, the buyer should review building permits and certificates of occupancy, investigate whether there are any outstanding code enforcement violations, get contractor estimates for the home improvements that the buyer wants to make, review the preliminary title report to make sure that there are no encroachments or other title issues, review the natural hazard disclosure report and if the property is a condominium, all association documents including CC&Rs, current budget and minutes of board meetings for the past 12 months.
• The buyer's lender prepares loan disclosures, the buyer signs the disclosures and the lender orders the appraisal.
• The buyer decides whether to rate lock.
• The buyer schedules any additional inspections which the home inspector may have recommended.
• The buyer shops around for a home warranty.
• The buyer selects an insurance agent and submits an application for hazard insurance.
• The appraisal comes back and the loan officer submits the entire loan file to the underwriter.
• The underwriter reviews the loan file and issues conditional approval with a list of conditions that need to be satisfied in order to obtain full loan approval.
• Any seller repair credit, purchase price reduction or contingency period extension should be negotiated before the inspection contingency period expires.
• Once the inspection contingency period expires, the buyer may be required to remove that contingency in writing. In the alternative, the buyer may elect to terminate the purchase agreement and receive a refund of the earnest money deposit less any escrow cancellation charges if the buyer is not satisfied with the results of his or her investigations.
• The buyer requests, receives and reviews an estimated closing statement from the escrow holder and requests corrections if necessary.
• The underwriter authorizes the preparation of the loan documents once all conditions have been satisfied.
• The escrow holder schedules an appointment with the buyer and a notary at the escrow holder's office or any other convenient place to sign the loan documents.
• The notary meets with the buyer to sign loan documents. Loan signing takes about 1 hour.
• The buyer carefully reviews the Settlement Statement (HUD-1) before signing it.
• The signed loan documents are sent back to the lender's funding department to be audited.
• If everything was done properly, the funder will issue "funding conditions" which are a standard list of items that need to be completed before the lender can fund the loan.
• The lender checks the buyer's credit again (soft pull) to ascertain whether there are any new undisclosed liabilities and once again verifies the buyer's employment status.
• The buyer delivers his or her closing funds (the remainder of the down payment plus closing costs) to the escrow holder via wire transfer or cashier's check, an original signed Preliminary Change of Ownership Report and any other documents that escrow holder may require.
• The seller delivers to the escrow holder an original signed and notarized grant deed and any other documents that escrow holder may require.
• The lender confirms that all funding conditions have been satisfied and then wires the loan funds to the escrow holder.
• Escrow forwards the original signed grant deed and deed of trust to the title company for next day recording.
• The title company delivers the grant deed and deed of trust to the County Recorder's office for recordation in the morning.
• When the escrow holder receives confirmation of recording, the funds are wired to the seller and escrow is closed.
• The buyer or buyer's agent may pick up house keys from the seller's agent once there is confirmation of recording.
• The escrow holder sends the buyer a final closing statement itemizing the final closing costs and showing any refund due to the buyer, if any, and mails out to the buyer a closing package including a refund check if any refund is due to the buyer.
• Within a few weeks after escrow closes, the buyer will receive the owner's policy of title insurance, the hazard insurance policy and the original recorded grant deed from the County Recorder's office.
• The buyer will in several months receive a notice from the County Assessor's office setting forth the assessed value of the purchased property. Real property taxes are based on the assessed value of the property. In arm's length transactions, the assessed value will usually be the purchase price but the Assessor has the authority to set the assessed value higher or lower than the purchase price. The buyer has 30 days to contest the County Assessor's valuation of the property.
• The buyer may receive a supplemental property tax bill if the assessed value of the property increased upon the buyer's purchase of the property.