Homebuyers: What to Do After Signing the contract

Homebuyers: What to Do After Signing the Contract

Purchasing a home is a long and detailed process, especially for first-time buyers. Signing a real estate contract is not the end of the journey—there are still several important steps that must be completed within specific deadlines. Doing these on time ensures that you keep your rights as a buyer, whether you decide to move forward with the purchase or back out due to inspection findings or financing issues.

1) Send the Contract to Your Lender and Start the Application Process

If you are financing your purchase and signed a Third Party Financing Addendum, send a copy of the executed contract to your lender and start the loan application immediately. This allows your lender to begin processing your loan without delays.

  • This helps you meet the closing date.
  • It also ensures you meet the deadline listed in Section 2A of the Third Party Financing Addendum. This is the timeframe your lender has to determine whether your loan will receive final approval.
    If approved, everything moves forward smoothly. If not, and the loan is denied within the deadline, you may terminate the contract and receive your earnest money back.

2) Deliver Earnest Money and Option Fee

After the contract is executed, you must deliver both the earnest money and option fee within 3 days.

  • If the buyer fails to deliver the earnest money on time, the seller may terminate the contract or pursue remedies.
  • If the buyer fails to deliver the option fee on time, the buyer loses the unrestricted right to terminate the contract. This means that if major issues are later found during inspection, you may not be able to back out.

3) Schedule a Home Inspection Quickly

Arrange the home inspection as soon as possible. In Texas, the option period is typically 7–10 days but can be negotiated shorter or longer. Because inspectors may uncover major issues (foundation, termites, mold, plumbing, etc.), they may recommend bringing in specialists for further inspection, which takes time.
Make sure all inspections are completed within the option period. If major issues are found, you have the right to terminate the contract and receive your earnest money back.

4) Select a Home Warranty

If you move forward, consider purchasing a home warranty. This provides protection for systems and appliances such as electrical, AC, plumbing, and kitchen appliances in case something breaks down after you move in.

5) Obtain Homeowner’s Insurance

If you are financing the purchase, your lender will require homeowner’s insurance before closing. Even if you are paying cash, it is strongly recommended to protect your investment in case of damage or unexpected events after closing.

6) Prepare for Closing

Bring a valid photo ID and good funds to closing at the title company.

  • “Good funds” means either a cashier’s check or a wire transfer of your down payment and closing costs.
    Once you’ve signed the documents and funds are confirmed—congratulations, the home is yours! 🎉