Step 1: Buyer and seller sign the Sales Agreement
The Sales Agreement, presented by your Realtor®, spells out the agreed-upon purchase price, terms, necessary steps that need to happen before closing, as well as the closing date.
Remember that you need to be out of the house by the closing date, so set a realistic goal or contingency for moving.
Step 2: Escrow account opened to keep funds safe
At this point in the transaction, a non-interest-bearing escrow account is opened to store all earnest money funds, provided by the Buyer, until the deal closes.
Step 3: Title company runs a title report for your house
Once you’ve accepted an offer, the title company or buyer’s agent will order the title report for your house to identify title issues, such trust complications, unpaid balances from lenders, or outstanding property taxes.
You can’t sell your house with any liens, judgments or debts attached to your property, so if any problems come to light, work with a real estate attorney to clear title so the deal can move forward.
Step 4: Home inspection scheduled within a week to 14 days
Most residential real estate contracts contain what’s known as a home inspection contingency, which allows a potential buyer to back out of the sale of the home, should the house require significant repairs that you aren’t willing to make.
Once your buyer puts down a deposit on your house, they’ll then schedule the home inspection.
The inspection typically takes place within a week to 14 days after you accept the offer on your home. In preparation for the home inspection, make sure that all areas of your home are accessible— including access to the attic, basement, crawlspace, and furnace—to avoid having to reschedule the inspection, and possibly causing a delay in closing.
Most importantly, try to be out of your home for the duration of the inspection unless your home comes with unique features that require you to provide a demonstration. Remember, the buyer will often be present for home inspections, and you want them to continue to picture themselves living in your home, which is easier for them to do without you there.
Next, the Buyer will provide you with a Buyers Reply to Inspection form which will highlight the items that they would like repaired or replaced prior to closing. Sometimes the Buyer will ask for a credit in lieu of repairs. Either way, this opens up Round Two of negotiations. If Buyer and Seller cannot come to an agreement, or the Buyer is no longer interested in the home after inspections, the Buyers may terminate the transaction, and the house goes back on the market.
Step 5: Lender calls in Appraiser to value the home
If the buyer is financing their home purchase, their lender will need to conduct a home appraisal as part of the closing process.
Like the home inspection, the home appraisal contingency gives the buyer to the opportunity to back out of the sale, should the valuation of the home be significantly less than the purchase amount, or if significant repairs are required on the house.
Step 6: Buyer works with the lender on financing details
Typically, a buyer will be financing some or all of their home purchase through a loan. Your contract will also outline the amount of time you’ll allow for your buyer to apply and receive financing—typically between 30 and 60 days.
A financing contingency means that you understand that the offer you’ve accepted on your home is contingent upon your buyer being approved for a mortgage.
A financing contingency protects both you and the buyer, as the buyer is not obligated to purchase your home if they fail to secure financing, and you are able to entertain another offer on your house if the buyer can’t come up with the funds within a certain time frame.
In Pennsylvania, Buyers are allowed two walk-throughs. One to assess repairs and the second one typically done right before closing, to inspection condition once the home is empty of the Sellers belongings.
The property should be clean and damage-free, and that all of your possessions have been removed unless you’ve arranged for certain items to stay. If the buyer discovers anything problematic, you’ll need to address it or the closing might be delayed.
Finalizing the sale on the closing date
The closing date is when the sale transaction is officially completed. Paperwork is signed, including signing the deed to the property over to the buyer. The seller need only bring a valid ID, keys and garage openers to the closing. All of the paperwork has been done behind the scenes.
Once all paperwork has been signed and funds have been disbursed, the buyer is officially the new owner of the property.