Step : Making an Offer on a Home After a Home Offer Is Accepted

After the offer

Congratulations! At this point, the seller accepted your offer and you have a ratified sales contract. Soon, it will be time to celebrate, but you need to complete a few important items before the home is yours. Now, it’s time to start putting some of that hard-earned money that you saved to work and take the next steps to obtain a mortgage.

Earnest money

An earnest money? deposit is a sum of money that a buyer provides along with the offer to show how serious they are about buying the house. When multiple buyers make an offer on a home, sellers sometimes will go with the offer that has a higher deposit because they perceive these buyers to be very serious about buying the home. Typically, earnest money deposits are between 1% and 3% of the price of the home. They are held in an escrow? account and then either applied toward the closing costs? or your down payment? at closing?. Earnest money deposits are usually made through a personal check to the real estate agent or title company? . If you back out of the sale, you may lose this deposit, depending on the terms in your sales contract.

 

When multiple buyers make an offer on a home, sellers sometimes will go with the offer that has a higher deposit because they perceive these buyers to be very serious about buying the home.


Ratified sales contract

One of the conditions of getting your mortgage is to send your lender? a ratified sales contract, which is a legally binding contract from both you and the seller. It should include a closing date—the date at which you and the seller will execute all documents needed to transfer ownership. Your lender will then start working toward that date to provide the money you need to purchase the home.


Necessary documents for the home purchase

Now that everything is moving toward the home purchase, you will need to focus on working with a lender to get your mortgage. Here are some examples of the types of documents you can expect your lender to request:

Proof of income

  • Pay stubs

  • W2s

  • Tax returns

  • 1099s

  • Social Security award

  • Child support/alimony documentation

Asset statements

  • Bank Statement

  • Certificates of Deposit

  • Bonds

  • Retirement accounts

  • Business accounts

  • Investment accounts

Other documents

  • Photo ID

  • Divorce papers

    If applicable

  • Bankruptcy documents

  • Proof of rent payments/copy of lease

  • Gift letter

    If using gift funds

  • Social Security card, ITIN, or other similar documents

  • Business license

    If self-employed

  • Copy of ratified sales contract

 

Download a checklist of documents needed here.


Interest rate lock

The interest rate on your mortgage could cost or save you thousands of dollars, depending on the current rate. That’s why it’s important to talk to your lender so you can lock in the interest rate on your mortgage right away, which is usually a good option in order to avoid the uncertainty of rates going up and costing you more. Delays in closing beyond the mortgage lock-in period could cause your rate to go up.