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Residential Real Estate: What Happens Between Contract and Closing

Man sign a home insurance policy on home loans. Estate agent with customer before contract signature.

For most people, buying a home will be the single biggest financial transaction of their lives. The process is far more involved and complex than many people realize before they go through it. It’s helpful to have a general roadmap for how residential real estate transactions will progress, to ensure all parties are prepared for the relevant steps. Continue reading for a discussion of how residential real estate transactions progress from offer to closing. Call a seasoned Texas residential and commercial real estate attorney for assistance with a Houston real estate matter.

Offer and Acceptance

By the time the buyer is ready to make an offer, they’ve already done significant leg work. They’ve gotten pre-approved for a mortgage, saved up for the down payment and closing costs, hired a real estate agent, and shopped around for eligible properties. Once they settle on a house, they make an offer.

The buyer and seller may go back and forth with offers and counteroffers before settling on a final price. The final offer letter and acceptance must be made in writing.

Property Appraisal

Property appraisal is an important part of the closing process. The appraisal occurs after the offer has been accepted, but may still be a condition of the sale going through. The purpose of the appraisal is for the mortgage lender to ensure that the amount they are lending the home buyer is not more than the property is actually worth. The lender will send out a representative to conduct the appraisal. If the appraiser discovers the property is worth significantly more than the buyer’s price, then the lender and the buyer take the win.

If the appraisal is significantly less than the price and intended loan, however, the buyer might not be able to pay back the loan down the line upon selling the property. The lender may state they will only lend the amount the property is actually worth. That means either that the buyer will have to put up a larger down payment, or the buyer and seller will need to renegotiate the price.

Home Inspection

Home inspections might not be required by lenders before obtaining a loan, but they are a good idea regardless. The parties will retain a professional inspector to look through the home and identify any problems. They’ll test the electric system, make sure the roof is sturdy, the staircases are safe, the appliances are working, and otherwise evaluate the home. If they identify any issues, they’ll raise them with the buyer. The buyer and seller should then go through the report to address any major issues, including which party will be responsible for making any necessary repairs. Any major issues discovered after closing will be up to the buyer to remedy (assuming the seller did not make any misrepresentations).

Title Search and Home Warranty

The buyer will retain a title company to conduct a search on the property to ensure that the title to the property is good and free of encumbrances. They might also perform a property survey to ensure the acreage is accurately reflected in the deed and sales contract, and that neighbors have not encroached on the property. The contract of sale also may include a home warranty.

Contract Becomes Official, Mortgage Terms Generated

After inspections and appraisals have been conducted, and the parties have agreed on repairs, the contract for sale will be made official, ready to sign. At that point, the mortgage underwriter can generate the terms of the mortgage based on the sale terms and the buyer’s finances. It may take another 30-60 days for the underwriter to finalize the terms of the mortgage and have them ready for the closing.

Home Insurance

The buyer will obtain homeowner’s insurance, which will then be factored into the mortgage payment.

Final Walkthrough

After all else is taken care of but before the final closing, the buyer should do one final walkthrough of the property. The buyer can check to make sure no new issues have arisen and that the seller has performed the repairs they agreed to perform. The buyer will keep an eye out for left-behind property, pests, uncompleted repairs, new issues, and any other problems.


At this point, all other outstanding items have been completed and everything is ready to become official. The parties sign relevant paperwork, including the sales contract and the mortgage, and the buyer is given the keys to the home.

If you need advice or representation concerning a Texas real estate matter in Harris County, get experienced and thorough legal help by contacting the Houston residential and commercial real estate lawyer Leigh Meineke of Leigh B. Meineke Law Firm. Call 832-706-0244 to get in touch today.

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