Congratulations! You Have Accepted The Buyer's Offer
What happens next?
If you have not already retained an attorney to represent you, now is the time to do so.
A Memorandum of Agreement is prepared by the brokers which outlines the terms of the mutual agreement. The Memorandum is sent to the buyer, the buyer's attorney, you and your attorney.
Your attorney prepares the contract of sale (based upon the information provided in the Memorandum of Agreement) and sends it to the buyer's attorney after the engineering inspections have been completed.
Once buyer's attorney receives the contract he/she will review it and then discuss any modifications he/she wishes to make with your attorney.
The buyer signs the contract and provides the earnest money deposit that is specified in the contract. The signed contract and earnest money deposit check are then returned (usually via Fed-Ex) to your attorney. Note: The customary earnest money deposit is 10% of the purchase price. It is typically held in your (the seller's) attorney's escrow account until the closing.
You sign the contract and a fully executed copy is returned to the buyer's attorney.
Once the buyer receives the fully executed contract, he/she can submit his/her application for a mortgage and proceed towards satisfying any other contingencies that remain in the contract.
The time period between your verbal acceptance of a buyer's offer and the execution of contracts is typically one to two weeks.
IMPORTANT NOTE: An accepted (or acceptable) offer is a non-binding, verbal, "handshake" agreement. Neither party is obligated to the other until contracts are fully executed, and delivered to both buyer and seller.
Most Memorandums of Agreements include a disclaimer similar to the following at the bottom of the page: Purchaser understands and acknowledges that if owner verbally accepts purchaser's offer that such acceptance is not binding on the owner until a written contract between purchaser and owner has been fully executed and delivered. Owner has the legal right to accept any other offer or to make counteroffers to other prospective purchasers until a contract has been fully executed.
GOOD NEWS - BAD NEWS:
The good news is that if a better offer is made for your house before contracts are signed, you are 100% free to accept it.
The bad news is that if a better house becomes available before contracts are signed, the buyer is 100% free to abandon the verbal agreement with you and purchase the other home.
NOTE: This is the customary protocol & sequence of events for residential real estate transactions in Westchester County, NY. Different customs, procedures and laws in other counties or states may cause the sequence of events to be quite different from what is described above. If you are purchasing a home outside of Westchester County, check with your Realtor regarding local protocols.