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| The Silicon Valley Association of Realtors (SILVAR) regularly shares local housing data, sales trends, expert insights and other real estate-related topics. This week, the association offers tips from the National Association of Realtors on how to navigate the purchase agreement once an offer is accepted. |
Buying a home doesn’t end when your offer is accepted. In many ways, that’s when the real work begins. Even with a signed purchase agreement, buyers must navigate a series of steps — and potential pitfalls — before the keys are finally in hand.
The National Association of Realtors has designed a guide to help new homebuyers stay on track avoid common obstacles that could jeopardize a closing, including inspection problems, financing setbacks and low appraisals.
Know your contract
A real estate purchase agreement, also known as a sales contract, outlines the terms and conditions of a home sale. It is legally binding only after both the buyer and seller have signed it.
Understanding your contract and its built-in protections can make the homebuying process far smoother.
Key components of this agreement are called contingencies, which function as safety nets for buyers. These provisions allow you to back out of the contract or renegotiate if something does not go as expected.
The most common contingencies include:
Home inspection contingency
This allows a professional inspection to uncover serious issues. If major defects emerge, you can request repairs, negotiate the price or cancel the deal.
Appraisal contingency
This protects you if the home is valued below the agreed-upon price, giving you the right to renegotiate or walk away.
Financing contingency
This lets you exit the contract if you cannot secure a mortgage or if loan terms change significantly before closing.
Title contingency
This ensures the property has a clear ownership history free of liens or legal disputes.
The closing period, typically 30 to 60 days, is the buyer’s window to satisfy these contingencies, finalize financing and meet all required deadlines.
Tips to keep your closing on track
While roughly 7% of real estate transactions fall apart before closing, the good news is almost all sales are completed after a purchase contract is signed. With an informed strategy and the right guidance, buyers can confidently move through the homebuying process.
Here are some tips to help guide you through the process:
Work with a trusted Realtor
An experienced agent will negotiate for you, manage deadlines and guide you through any issues that arise.
Get preapproved before you shop
Preapproval ensures you’re qualified for a mortgage and reduces surprises when it’s time to finalize your loan.
Stay ahead of your deadlines
Inspection periods and financing timelines are strict; even small delays can affect your closing date.
Compare mortgage offers
Getting quotes from multiple lenders can save you thousands each year.
Explore all loan options
Government-backed mortgages insured by the Federal Housing Administration and first-time buyer programs may make qualifying easier or reduce your upfront costs.
Avoid big financial changes
Hold off on major purchases or new credit accounts until after closing, as these can affect your creditworthiness.
Plan for more than the down payment
Budget for closing costs (2% to 5% of the purchase price), earnest money, property taxes, HOA dues and future maintenance. Financial experts also recommend setting aside 1% to 2% of the home’s price annually for repairs.
Communicate often with your agent
Asking questions early prevents misunderstandings and keeps the process smooth.
Silicon Valley Association of Realtors (SILVAR) is a professional trade organization representing 5,000 Realtors and affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term Realtor is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of Realtors and who subscribes to its strict Code of Ethics.
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