The Process of Selling a House
When is a house sold? Selling a house isn't a one-and-done transaction. It's a progression of steps. You'll also have to deal with state laws that govern certain types of purchases that could affect the finality of the sale. But certain steps in the process of selling a house are pretty standard.
Signing a Contract
Coming to an agreement on price and terms between the seller and the buyer is the first step. Generally, the buyer makes an offer and the seller will either accept it or issue a counteroffer. This counteroffer procedure might involve just one counter or it can evolve into a multitude of counteroffers back and forth over a period of time.
At some point, however, there's a meeting of the minds. The listing status then changes from an active listing to a pending sale. Some agents put a sign up in the yard that says "pending" or "in escrow" or "under contract." But your house is not yet sold just because this happens.
Time for Inspections
Almost every buyer in America is told to get a home inspection prior to closing. Other types of inspections might be advisable as well depending on a variety of particulars such as the age, condition, and location of the property.
The buyer might negotiate further with the seller if an inspection turns up an unexpected defect. This is particularly the case if the defect is one that will cost a good bit to fix. The buyer might threaten to cancel the transaction in this case unless the seller agrees to conditions that are usually set forth in a request for repair.
And then, of course, repairs take time. And your house isn't sold yet when they're accomplished. It's not sold yet even if the buyer is satisfied with the results of the inspections.
When the Buyer's Loan Is Approved
The file goes to underwriting after all the buyer's supporting documents have been received by the lender and after an appraisal has been completed. The underwriting process can take anywhere from a few days to a few weeks.
The appraisal must support the agreed-upon purchase price. More negotiations will take place or a new appraisal might be ordered if the appraiser submits a low appraisal. But even after the loan is approved, your house isn't sold yet.
A Contingency Sale
A buyer might need to close escrow on an existing home before she can move forward with buying your home. This is known as a contingent sale and that contingency must usually be satisfied or released to perfect your contract with the buyer.
One of the ways to satisfy a contingency is to sign a release of contingencies or perform some other act, such as depositing all funds to close escrow. But even if the buyer deposits the entire purchase price in cash, your home might not be completely sold yet, especially if the buyer could only be held liable for liquidated damages in the event of default.
When Your House Is Considered Sold
You might consider that your house is sold at any point along this line of process, but your home isn't technically sold until you no longer own it. Your house is sold when the deed has exchanged hands or is recorded and the funds have been disbursed.