The Contract Process: My Offer Was Accepted! Now What?

The Contract Process

Congratulations! You've found the home of your dreams and are now officially under contract. In Louisiana, the process of buying a home moves quickly from this point, so it’s beneficial to understand the steps ahead to ensure a smooth closing. From the day your offer is accepted to the day you receive the keys is, on average, 30-45 days. Here’s what happens next:

1. Deposit Earnest Money

Once a buyer and seller agree on a contract, the buyer has 72hrs to deposit earnest money into an escrow account (typically the Title Company). This shows your commitment to purchasing the home and is held by a neutral third party, usually the title company or real estate brokerage, until closing.

2. Inspection Period

Once a buyer's offer is accepted, the Due Diligence/Inspection Period begins. This window, typically between 7 to 14 days, allows the buyer to conduct necessary home inspections, such as general property condition, termite, and plumbing evaluations. If any concerning issues arise during the inspection, the buyer can either negotiate repairs with the seller or potentially back out of the contract depending on the inspection contingency.

3. Homeowners Insurance

During the Due Diligence Period (and often before making an offer), you’ll need to secure homeowners insurance. Homeowners Insurance is a requirement for any home with a mortgage. In Louisiana, be mindful of additional policies like flood insurance, especially if the property is in a high-risk flood zone.

4. Negotiate Repairs or Price Adjustments

If the inspection reveals any major issues, the buyer can request repairs or a price adjustment. The seller can agree to make repairs, offer a credit at closing, or decline. This step requires negotiation, so it's essential to work closely with your real estate agent to reach an agreement.

5. Finalize Financing

Once you're under contract, it's time to finalize your mortgage. The lender will review your financial documents, and an appraisal will be ordered to ensure the home's value supports the loan amount. Be responsive to your lender during this period, as they may need additional paperwork to approve the loan.

6. Appraisal

Following the Due Diligence/Inspection period, the lender will order an appraisal to assess the value of the home. If the appraisal comes in lower than the agreed-upon sale price, you may need to renegotiate with the seller or cover the difference. If an agreement cannot be reached, buyers can walk away from the deal and receive their earnest money deposit back.

7. Title Search and Title Insurance

While under contract, the title company will conduct a title search to verify the legal ownership of the property and ensure there are no outstanding claims or liens against it. Buyers will also need to purchase title insurance, which protects against future claims on the property. In Louisiana, it’s common for the buyer to choose the title company, so be sure to work with a reputable firm.

8. Final Walkthrough

A day or two before closing, the buyer has the opportunity to do a final walkthrough of the property. This ensures the home is in the same condition as when the contract was signed and that any agreed-upon repairs have been completed.

9. Closing Day

On closing day, you’ll meet at the title company or attorney's office to sign all necessary paperwork. This includes loan documents, the deed, and various disclosures. After about an hour of signing, the title company will record the sale with the parish, and you’ll receive the keys to your new home! 

10. Move-In

Once the transaction is complete, you can move in and start enjoying your new home!

Navigating the homebuying process can feel overwhelming, but by following these steps and working closely with your real estate agent, we’ll ensure a smooth and successful closing. Welcome to your new home!

Richard W. Hébert
Real Estate Advisor
Engel & Völkers New Orleans
(504)617-5184
RichardW.Hebert@EngelVoelkers.com