What Happens Between Contract Signing and Closing?

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You found the perfect home, your offer was accepted and the contract is signed—congratulations! But before you pop the champagne, there’s still a critical stretch of the homebuying journey ahead: the closing process. 

Between contract signing and getting the keys, several important steps must be completed to ensure the deal moves forward smoothly. Here are the key milestones every buyer should expect during this phase, plus helpful tips to keep things on track.

Entering Escrow

Once your offer is accepted and the contract is signed, both parties typically enter escrow. Escrow is a neutral holding arrangement where a third party manages funds and documents until the transaction is finalized. 

During this time, you’ll deposit earnest money—a good-faith payment showing you’re serious about the purchase. This money is usually credited toward your down payment at closing. 

✅ TIP: Confirm the escrow instructions and timeline with your REALTOR® so you don’t miss any deadlines.

The Appraisal

If you’re financing the purchase, your lender will require a home appraisal to determine the property’s market value. A licensed appraiser will assess the home based on factors such as: 

  • Condition and age 
  • Location 
  • Renovations 
  • Sales of similar nearby properties 

If the appraisal matches or exceeds the agreed-upon price, you’re one step closer to closing. If the home appraises for less, you may need to renegotiate or cover the difference. 

📖 What to expect during an appraisal 

✅ TIP: Ask your agent to run recent comps before the appraisal so you have a sense of what to expect and can be prepared to negotiate if needed.

Securing Insurance

Before your lender gives final approval, you’ll likely need to secure homeowners insurance. Depending on the property’s location, other types of coverage—like flood, earthquake or liability insurance—may also be required. 

Even if it’s not mandated, insurance is critical to protecting your investment and peace of mind. 

✅ TIP: Start gathering insurance quotes early so you can compare coverage and rates before your lender’s deadline.

Getting a Home Inspection

A home inspection isn’t always required, but it’s highly recommended—and often included as a contingency in your contract. A qualified inspector will evaluate the home’s structure, systems and safety. 

If the inspection uncovers major issues, you’ll have options: negotiate repairs, request a credit or, if needed, walk away without penalty. 

📖 What to expect during a home inspection 

✅ TIP: Attend the inspection if possible. It’s a great opportunity to ask questions and learn more about the home’s maintenance needs.

The Final Steps

Once the appraisal, inspection and insurance are squared away, your lender will issue final approval, and you’ll schedule your closing day. On that day, you’ll review and sign documents, pay your remaining costs and—finally—get the keys. 

📖 Steps between signing and closing 

✅ TIP: Do a final walkthrough the day before closing to confirm the home’s condition matches what was agreed upon—and that any requested repairs were completed. 

The Bottom Line

Signing the contract is a big milestone, but it’s just the beginning of the final leg of your homebuying journey. Knowing what to expect—and working closely with your REALTOR®—can help ensure a smoother, more confident path to homeownership. 

Apply For A First Time Homebuyers Home Warranty Grant This June

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In celebration of Homeownership Month this June, we’re offering 10 first-time homebuyers a chance to receive a $250 reimbursement grant toward their home warranty.

To Chicago REALTORS®:

 

Nominate one of your first-time homebuyer clients for this special, limited-time reimbursement grant! We’ve made it easy. Share this blog on social media with this  downloadable graphic (to the right). Click here to download.

OR, complete the nomination form for clients you already know are qualified for this grant.      

Click To Apply Online

 

To Applicants:

You did it! You closed on your very first home! CONGRATULATIONS!

One of the ways you can, and have, protected your investment is through a home warranty purchase. Between closing costs, down payments and moving expenses, out-of-pocket expenses can add up.

This year, the Chicago Association of REALTORS® Foundation is proud to help ease the burden of homeownership costs by offering Chicago REALTOR® clients the chance to obtain a $250 reimbursement grant for purchasing a home warranty package.

Criteria For Applicants

To be considered, you must meet the following criteria:

  • Applicant must have closed on the home within six months of the application submission date.
  • Applicant must be one of the primary homeowners.
  • Applicant must be a first-time home owner.
  • Application must include a 150 word statement on “what owning my first home means to me.”
  • NOTE: Homes purchased in underinvested communities will be given priority consideration.

Click Here To Apply Online

Negotiating Written Buyer Agreements: What To Know

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You’re ready to purchase a home. The next step is to interview REALTORS® and negotiate a written agreement that includes the services they will provide and the compensation they will receive. Here’s what you need to know about negotiating an agreement with a REALTOR®.

When will I be able to negotiate?

REALTORS® are required to get a written buyer agreement before you tour a home with them, whether that tour is in-person or a live virtual tour. These agreements help ensure both you and your REALTOR® are clear about roles, responsibilities and REALTOR® compensation. If you are simply visiting an open house or asking a real estate professional about their services, you do not need to sign a written buyer agreement. Learn more about written buyer agreements here, and learn more about open houses and tours here.

What can I negotiate?

Agreements with your REALTOR® are negotiable, including terms about the services your REALTOR® will provide, how much your REALTOR® will be paid, how long your agreement will last and more. You and your REALTOR® will work together to reach an acceptable agreement that allows you to get the value and services you need in the homebuying process, while also enabling your REALTOR® to pursue fair compensation for their work. Remember: compensation is fully negotiable and not set by law. You should consult an attorney if you have any questions or concerns regarding an agreement.

How is my REALTOR® compensated?

REALTOR® compensation can take many forms, such as a flat fee, a percentage of the purchase price or an hourly fee. REALTORS® cannot agree to an open-ended amount or range of compensation such as “the REALTOR’S® compensation will be whatever amount the seller is offering” or “between X and Y percent.” You can also ask the seller to offer compensation to your REALTOR®, which can be sought in the purchase agreement.

What types of services can my REALTOR® provide?

REALTORS® may offer many types of services such as finding and showing you homes that meet your criteria, accompanying you to showings, sharing their analysis of available properties, negotiating on your behalf and more. For more, read the 183 Ways A REALTOR® Makes The Real Estate Transaction Easier For You.

How do I start the conversation?

You may want to talk to a few REALTORS® to find the best match to help you on your homebuying journey. Start by asking questions about the options available to you. If you are working with a REALTOR®, they are bound by a Code of Ethics to have open and transparent conversations with you about your options.

What if we can’t agree?

You don’t have to sign an agreement that you don’t agree with, and you or the REALTOR® can walk away from a negotiation at any time. Keep looking for the right fit—another REALTOR® may be able to better meet your needs.

Can we change the terms of the agreement after we make it?

Yes. You and your REALTOR® can mutually agree to change the terms of your agreement. But your agreement and/or state law may govern when it can be changed or terminated. Read your agreement closely and speak with your REALTOR® if you would like to change or exit your agreement.

What Veterans Need to Know About Buying a Home

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Veterans and active servicemembers often have unique needs when looking for a home, and REALTORS® are committed to helping ensure those needs continue to be met following the real estate practice changes that went into effect on August 17, 2024. Here is what you need to know:

I’d like to take advantage of my Department of Veteran Affairs (VA) Home Loan benefit. Am I allowed to pay for a REALTOR® under VA rules?

Yes. On August 10, 2024, the VA enacted a temporary policy allowing buyers with VA home loans to pay for REALTOR® representation.

Why is the policy only temporary?

The VA will decide if a formal rulemaking is necessary to make this policy permanent.

Why am I being asked to sign a written agreement?

Written buyer agreements lay out the services your REALTOR® will provide and what they will be paid for those services. The practice changes require written agreements for many REALTORS® nationwide. You are in the driver’s seat with these agreements, which are fully negotiable. You should not sign anything that includes terms you do not agree with or do not understand. For more information on written buyer agreements, click here.

How does my buyer’s agent get paid?

This is determined in your written buyer agreement. Methods of paying a buyer’s agent may include, but are not limited to, the seller or their listing broker offering to compensate the buyer’s agent, the buyer requesting that the seller pay the buyer broker as part of the purchase offer, or the buyer paying their agent directly out of pocket.

Why should veterans and active servicemembers work with a REALTOR®?

REALTORS® are obligated under NAR’s Code of Ethics to work in your best interest. Additionally, many REALTORS® have obtained NAR’s Military Relocation Professional (MRP) certification to better prepare them to work with veteran buyers. Find a REALTOR® who has earned the MRP certification here.

Open Houses & Written Agreements: What You Need to Know

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When you begin working with a REALTOR® and touring homes, you will be asked to sign a written buyer agreement. But what if you are just attending an open house? Here’s what you should know:

I am attending an open house without a REALTOR®. Do I need a written buyer agreement in order to tour the home?

No. If you are simply visiting an open house on your own or asking a REALTOR® about their services, you do not need to sign a written buyer agreement.

Is a REALTOR® who is hosting an open house required to enter into written agreements with the potential buyers who attend the open house?

No. In this case, since the REALTOR® is only there at the direction of the listing broker or seller, the REALTOR® is not required to have a written agreement with the buyers touring the home.

When will I be asked to sign an agreement with a REALTOR®?

After you begin “working with” a REALTOR® and at any point before you tour your first house together.

What does “working with” a REALTOR® mean?

A buyer is “working with” a REALTOR® as soon as the REALTOR® begins to provide services, such as identifying potential properties and arranging tours. REALTORS® who are simply marketing their services or speaking to a buyer—at an open house or by providing a buyer access to a house they have listed—are not considered to be working with the buyer.

What does it mean to “tour” a home?

Under the terms of the settlement, a “tour” is when a buyer who is working with a REALTOR® enters a home that is for sale or directs their REALTOR® to enter the home on their behalf. This includes when the buyer’s agent provides a live, virtual tour to a buyer not physically present.

What is the purpose of written buyer agreements?

Clarity and transparency. Written buyer agreements lay out the services your REALTOR® will provide and what they will be paid. Buyers should not sign anything that includes terms they do not agree with or do not understand. These agreements are fully negotiable.

Where can I learn more about buyer agreements?

Click here for everything you need to know.

Multiple Listing Services (MLSs): What You Need To Know

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When buying or selling a home, your REALTOR® will use a Multiple Listing Service (MLS) to find homes for sale or market your property. Here is what you need to know about them:

What is an MLS?

MLSs are online platforms that compile home listings from brokerages in a given market. They enable REALTORS® to see available homes for sale efficiently, get helpful marketplace data and share listing information to national and local websites that advertise properties. There are many MLSs across the U.S., and each has its own rules to make sure its information is complete, accurate and transparent.

What value does an MLS provide?

MLSs allow real estate professionals to see, share and promote homes for sale so the largest pool of potential buyers can find them. MLSs provide the most accurate, reliable and detailed information about properties (this includes properties that have been sold and are for sale), including listing price, address, features, disclosures and square footage. MLSs also help promote fair housing and equal opportunity by giving REALTORS® and their clients access to consistent information.

As a buyer, how can an MLS help me buy a home?

Using a Multiple Listing Service allows your agent to access many homes for sale and connect with REALTORS® working to sell their clients’ homes.

As a seller, how can an MLS help me sell my home?

MLSs are the most trusted source for real estate data because their information is verified by REALTORS®. Listing on an MLS will help a seller reach the largest pool of buyers and potentially attract the best offer.

Am I required to market my home through an MLS?

No. You should discuss the pros and cons with your REALTORS®. If you decide to have your REALTOR® not list your home on an MLS, you may be asked to sign a document verifying that you have made this choice.

Can I make an offer to compensate a buyer’s agent on an MLS?

An offer of compensation is when the seller or the seller’s agent offers to compensate another buyer’s agent for bringing a buyer to successfully close the home purchase. As of August 17, 2024, offers of compensation are no longer allowed on MLSs. However, offers of compensation can still be made off-MLS and shared through common marketing vehicles such as flyers, signs, emails or other communication mechanisms.

Can I offer concessions on an MLS?

To attract more buyers, sellers may offer concessions, which are certain costs associated with the buyer’s home purchase that a seller agrees to pay. MLSs may allow communications about a sellers’ concessions, but it depends on local rules.

How do I access Multiple Listing Service information?

Many MLSs share data with websites that consumers can access. If you are a buyer, your REALTOR® will provide you with MLS property listings that may meet your criteria. For both buyers and sellers, when you work with a REALTOR® who has access to an MLS, you can discuss how the MLS can benefit you. Remember, REALTORS® are guided by ethical duties under the Code of Ethics, including the pledge to protect and promote the interests of their clients. Your REALTOR® will help you to weigh your options and develop a strategy you are confident in.

Written Buyer Agreements: What You Need To Know

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When you begin working with a REALTOR® to buy a home, you will be asked to sign a written buyer agreement. Here’s what you need to know about these agreements:

What is a written buyer agreement and what does it do? 

A written buyer agreement is an agreement between you and your REALTOR® that outlines the services your REALTOR® will provide you, and what they will be paid for those services.

Why am I being asked to sign an agreement? 

Written buyer agreements became a nationwide requirement for many REALTOR® as a part of the National Association of REALTORS®’ proposed settlement of litigation related to broker commissions. The requirement went into effect on August 17, 2024.

Are these agreements new?

In some places, yes. Many states have required them for years, while some, including Illinois, have not. As a result, it is entirely possible you or others you know have not used them in the past. Regardless, they are now a nationwide requirement for many REALTORS®. 

Are these agreements negotiable? 

Yes. You should feel empowered to negotiate any aspect of the agreement with your REALTOR®, such as the services you want to receive, the length of the agreement and the compensation, if any. Compensation between you and your REALTOR® is negotiable and not set by law. In the written agreement, the compensation must be clearly defined (e.g., $0, X flat fee, X percent, X hourly rate), not open-ended or a range. It is important to sign only an agreement that reflects what you have agreed to with your REALTOR®. 

How do I benefit from these agreements? 

These agreements clearly lay out what services you, as a homebuyer, expect your REALTOR® to provide, and what your REALTOR® will be paid. These agreements make things clear and reduce any potential confusion at the outset of your relationship with your REALTOR®. 

When do I need to sign an agreement? 

You will be asked to enter into a written buyer agreement with your REALTOR® before touring a home with them, either in-person or virtually. If you are simply visiting an open house on your own or asking a REALTOR® about their services, you do not need to sign a written buyer agreement. 

Does this mean I have to pay my REALTOR® out of pocket? 

Not necessarily. While you are responsible for paying your REALTOR® what is outlined by your agreement, you can still request, negotiate for and receive compensation for your REALTOR® from the seller or their REALTOR®. 

Do agreements dictate a specific type of relationship I need to have with my REALTOR®? 

No—you are allowed to enter into any type of business relationship with your REALTOR® that is allowed in the state law where you live. 

Can I change or exit an agreement? 

Yes. You and your REALTOR® can mutually agree to change your agreement. Agreements may have specific conditions under which they can be exited, so read the text of the agreement and speak with your REALTOR® if you would like to change or exit your agreement.

Recent Related Posts

What Homebuyers Need to Know About NAR’s Settlement

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Recently, the National Association of REALTORS® (NAR) reached a settlement agreement that will change the homebuying and selling process. While a REALTOR® will still be there to help you through the journey, here’s an overview of the changes that will go into effect on August 17.

As a buyer, you will have to sign a written agreement with your REALTOR® before touring a home. Before signing this agreement, you should ensure it reflects the terms you have negotiated with your agent and that you understand exactly what services and value will be provided, and for how much.

Your buyer agreement must include the following four aspects surrounding compensation:

  1. A specific and conspicuous disclosure of the amount or rate of compensation the real estate agent will receive or how this amount will be determined.
  2. Compensation that is objective (e.g., $0, X flat fee, X percent, X hourly rate)—and not open-ended (e.g., cannot be “buyer broker compensation shall be whatever the amount the seller is offering to the buyer”).
  3. A term that prohibits the agent from receiving compensation for brokerage services from any source that exceeds the amount or rate agreed to in the agreement with the buyer; and,
  4. A conspicuous statement that broker fees and commissions are fully negotiable and not set by law.

These written agreements apply to in-person and virtual home tours. However, if you are only speaking to an agent at an open house or discussing their services with them, no written agreement is necessary.

Sellers may still agree to offer compensation to your agent. This practice is permitted but the offer cannot be shared on a Multiple Listing Service (MLS)— MLSs are local marketplaces used by both buyer brokers and listing brokers to share information about properties for sale. Also, you can still accept concessions from the seller, such as offers to pay your closing costs.

To read more details about these changes, visit facts.realtor.

What To Know: Transitioning from Renting to Buying

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It’s time. You’re ready to move on from following your landlord’s rules and ready to purchase a place you can call home. Follow these steps to make transitioning from renting to buying as easy as possible.

Consider Your Financial Situation

While buying a home may be a better way to build wealth, buying a home is a big financial decision. Take the time to consider your goals and plans for the future, and ask yourself some of the following questions

  • How will my finances look different if I buy as opposed to rent?
  • Do I have the means to maintain a home and the repairs that come with it?
  • Will I be able to make monthly mortgage payments?

Understand the Full Cost of Owning A Home

When you purchase a home, you need to pay more than just your principal and interest rates. Also lumped into your mortgage payment is what’s known as PITI:  principal, interest, taxes and insurance.

You’ll also need to consider the extra costs associated with owning a home, including your down payment and closing costs when you first purchase your home, as well as other monthly payments like utilities and other maintenance needs.

Get Your Homebuying Team Together

When you’ve determined that you’re ready to buy, it’s time to put together your homebuying team who will help guide you through the transaction with ease. This includes a REALTOR®, lender, attorney and inspector. Click here for more details on these individual’s roles during the homebuying process.

Start Your Search

We’ve gathered five easy steps to follow in the beginning stages of the home buying process to make the journey to your new home as easy and seamless as possible. This includes creating a plan, researching, finding a REALTOR®, choosing a loan and getting pre-approved. Get more information on these important steps here.