Step 3: After Offer Agreement

Now that you've made an offer and agreed on terms with the seller, you've got a series of tasks that need to be completed before you're handed the keys. These major items include:

• Getting approved for financing

• Resolving any contingencies or disclosures

• Having the house appraise at or more than the agreed upon purchase price

• Inspecting the house for flaws and agreeing with the seller on repairs and/or credits

• Having the title search done to ensure ownership is yours after the transfer

• Scheduling closing and settling on the house

After completing these tasks, you will be the new owner of a house!

While this can be a huge disappointment after the time and negotiation you spent getting to this point, the bright side is that if you back out of the contract for reasons specified in a contingency, you will get to keep your earnest money deposit. 

Breach of contract is legalese saying you didn't abide by the terms of the contractual agreement. If you terminate the contract for an event that your contingencies anticipated, such as not getting approved for financing or the house not appraising, you won't be in breach of contract and you will likely have your earnest money deposit returned to you in full. If, however, you break the rules of the contract, it's likely that the seller will get to keep your earnest money deposit.

Sellers don’t back out of purchase and sale agreements very often. After all, they’ve likely spent a fair amount of time preparing, marketing, and showing the property before finally negotiating an offer and signing. Terminating the contract would mean starting back at square one. In the unlikely event that the seller gets cold feet, buyers have a few different options, including suing for specific performance (read: to complete the sale) and placing a lien on the property. Both of those situations necessitate consulting with a real estate attorney.