Congrats You’re Under Contract

Once your offer is accepted, congrats you’re under contract! This means the seller has agreed to your terms, and the home is temporarily off the market while the next steps unfold. However, being under contract doesn’t mean the deal is done just yet. There are still important steps to take before you can officially call the house your own.

Let’s break down what happens during this crucial phase of the home-buying process.

1. Submitting Your Earnest Money Deposit

Shortly after going under contract, you’ll be required to submit an earnest money deposit (EMD). This payment can either be held by one of the real estate offices involved in the transaction or by the closing attorney. Real estate offices are turning more towards the attorney keeping the money safe until closing. 

The amount varies, but it’s typically $500 to a few thousand and is held in an escrow account until closing. If everything goes smoothly, this money is applied toward your down payment or closing costs.

However, if you back out of the deal without a valid contingency, the seller may be entitled to keep your deposit. On the other hand, if the seller backs out or a contingency isn’t met, you may get your money back.

2. Reviewing the Contract and Key Deadlines

Your purchase contract outlines all the terms of the deal, including important deadlines. These deadlines are crucial because missing them could delay closing—or worse, cause the deal to fall apart.

Some key deadlines to watch for include:
✅ Earnest Money Due Date – The date by which your earnest money deposit must be submitted.
✅ Inspection Period – The timeframe to complete a home inspection and request repairs.
✅ Appraisal Deadline – When the lender must receive the home appraisal.
✅ Financing Contingency Deadline – The date by which you must secure final loan approval.
✅ Closing Date – The day when the transaction is finalized, and you get the keys to your new home!

Your real estate agent will help you stay on track, but it’s important to stay engaged and proactive throughout the process.

3. The Home Inspection

One of the first major steps after going under contract is scheduling a home inspection. A licensed inspector will evaluate the home’s condition, checking for potential issues such as:

• Roof damage
• Plumbing or electrical problems
• HVAC system issues
• Structural concerns
• Mold or water damage

Once you receive the inspection report, you have a few options:
🔹 Request repairs from the seller.
🔹 Negotiate a credit to cover repairs instead.
🔹 Proceed as-is if the issues are minor.
🔹 Back out if major problems are found (as long as you have an inspection contingency).

Sellers aren’t required to make repairs, but many are willing to negotiate to keep the deal moving forward.

4. The Appraisal Process

If you’re financing your home with a mortgage, your lender will require an appraisal to determine the home’s value. This is to ensure they aren’t lending you more money than the home is worth.

Here’s what happens:
📌 A licensed appraiser evaluates the home based on size, condition, and recent sales of similar properties.
📌 The lender receives the appraisal report.
📌 If the home appraises at or above the purchase price, great! You move forward with financing.
📌 If the home appraises for less, you may need to renegotiate with the seller, cover the difference, or walk away (if you have an appraisal contingency).

A low appraisal doesn’t always kill the deal, but it can complicate things. Your agent will help you navigate this step if issues arise.

5. Finalizing Your Mortgage

Even if you’re pre-approved, you still need to get final loan approval before closing. This is known as the underwriting process, and it involves:
✅ Verifying your income and employment.
✅ Checking your debt-to-income ratio.
✅ Reviewing the home’s appraisal report.
✅ Ensuring all loan conditions are met.

During this time, it’s critical to avoid big financial changes. Do not:
🚫 Take out new loans (no new car or credit cards).
🚫 Make large purchases (no new furniture just yet).
🚫 Change jobs or quit your current job.

Any of these actions could impact your loan approval and put your home purchase at risk!

6. Contingencies and (potential) Negotiations

Your contract may have contingencies, which are conditions that must be met before the sale is finalized. The most common contingencies include:
✔ Inspection Contingency – Allows you to renegotiate or walk away if major issues are found.
✔ Financing Contingency – Protects you if you can’t secure a mortgage in time.
✔ Appraisal Contingency – Ensures you don’t overpay for the home.

If contingencies aren’t met by their deadlines, you and the seller may need to negotiate new terms—or the deal could fall through.

Going under contract is an exciting milestone, but there’s still work to be done before closing. By staying on top of deadlines, working closely with your agent, and being prepared for potential bumps in the road, you’ll be well on your way to a successful home purchase.

Now that you know all about the sixth step in the home buying process, let’s move on to #7! To see the whole 10 step process check out our blog article: The 10 Steps to Buying a Home.

If you enjoyed Congrats You’re Under Contract, make sure to check out ERA Liberty’s other blog articles. We blog about all things real estate, local eats, and happenings in and around our community.

For all your home buying or selling needs, ERA Liberty Realty is always there for you! We are here to help you no matter where you are, we have agents licensed in West Virginia, Virginia, Maryland, or Washington DC! Reach out today to get your real estate journey started!