Yes! Your offer for your dream home has been accepted by the seller and now it's time to start the escrow process.
Step 8: Open Your Escrow - When the purchase agreement is accepted and signed by all parties, your agent will open escrow for you and your 3% earnest money will be deposited with the title company. The escrow or title company is a neutral third party that will receive, hold, and distribute all funds associated with your transaction.
The escrow period is typically 30 days long, during which time the mortgage broker will submit your application to the lender, along with a copy of the purchase contract and the title report. An appraisal will be ordered (if it's part of the contract) and the bank begins scrutinizing your qualifications and making sure the home you're buying is worth what you're paying.
Also during the escrow period, you will have the opportunity to determine the condition of the home by having a property inspection, which will cover the overall condition of the electrical, plumbing, foundation, floors, and some of the appliances. Other inspections can include a pest/dry rot inspection, roof, or sewer.
If during the escrow you decide that the home isn't for you, or the condition is not what you expected, and you have not removed your inspection contingency, you have the right to cancel the contract and have your initial deposit money returned.
If the appraisal is lower than your offer price, you and the seller can go back to the negotiating table. There are 3 options: you can add more money to make up the difference between the appraisal number and the price you agreed to pay; the seller can agree to lower the price to the appraisal number, or, providing you have an appraisal contingency, you can cancel the contract. Most often a compromise is reached so that the transaction can move forward.Tomorrow: Step 9 - Remove the Contingencies