Time to complete: 1-3 days

You’ve been waiting and negotiating patiently in hopes of closing a deal on a home. Finally, the long-awaited email arrives. Your offer is accepted. Congratulations! You’re on your way to buying a house! But you’re not done yet; it’s time to finalize the offer and get the ball rolling on the transaction process. Here’s what to do.

🖋️ Sign the purchase agreement‍

Both parties need to ink the contract for it to be valid. In most states, this is the same document as the offer you sent, with required addendums and disclosures included.
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Important: this document contains all relevant deadlines that guide the rest of the closing process. Pay close attention to each of these. Once the agreement is signed, it is legally binding. In most cases, if some deadline is not met, the seller has the right to cancel the deal.

🔐 Open an escrow account‍

An escrow account is a third-party bank account that holds and manages funds. You pay money into the escrow account, and the escrow account will pay out the money to the relevant recipient parties based on the contract described in the purchase agreement.

As an example, let's look at earnest money, which is usually the first payment you'll usually make after signing the purchase agreement:

• You would first deposit the earnest money into an escrow account after the purchase agreement is signed.
• The money will stay in this account until the deal is completed or canceled.
• If the deal is closed, this money will go towards the purchase of the property, at which point it will be disbursed to the seller.
• If the deal is canceled, this money will be disbursed back to you if the contract allows it. Otherwise it will be disbursed to the seller.

Escrow accounts may have a variety of parties paying and receiving money. They handle various types of transactions related to closing, including earnest money deposit, lender’s funds, inspection fees, taxes, and commissions.

An escrow company is responsible for creating the escrow account and managing payments into and out of the account. In some areas, the escrow company may also be the title company. In these situations, the same company will handle escrow, title research, and title insurance.

Determine if an escrow account has already been set up by the seller or your lender. If not, you may need to work with the seller to set one up.

Your lender will generally have a recommended escrow and/or title provider, but you may be able to request alternative providers. This will need to be coordinated with the seller and your lender.

💰 Deposit the earnest money‍

Assuming you’ve included an earnest money deposit in your purchase agreement, you’ll need to put this into the escrow account. This usually needs to happen within 1-3 days of signing the agreement (the exact time will be stipulated in the agreement).

🔍 Coordinate inspection, appraisal, insurance, and loan‍

This part of the process can take a while, and since you have deadlines to get them all done, it’s best to start coordinating these right away.

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