When Is a House Considered Sold?

man holding sold sign in front of house
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Question: When Is My House Sold?

A reader asks: "This isn't an urgent question or anything, but it could mean the difference between a steak dinner or a hot dog: I'd like to know at what point is my house sold? My wife says it's when our agent puts a sold sign on the house. My mom, who used to be an agent, says it's when the buyer is approved for the loan. I say my house is sold the day we accepted the buyer's offer. So, when is it? When is my house sold?"

Answer: When is my house sold is a terrific question.  There are degrees of house sold-ness. Selling a house is a progress of steps. You also have state laws that govern certain types of purchases that could affect the finality of sale.

Is Your House Sold After Signing a Contract?

This is the first step, coming to an agreement on price and terms between the seller and the buyer. Generally the buyer makes an offer, the seller either accepts the offer or issues a counter offer. The counter offer procedure can result in a multitude of counter offers or just one counter.

At some point, there is a meeting of the minds. Then the listing status changes from an active listing to a pending sale. Some agents put up a sign that says "pending" or "in escrow" or "under contract." But your house is not yet sold.

Is Your House Sold After Inspections?

Almost every buyer in America, unless the buyer is living under a rock, is told to get a home inspection.

Apart from a home inspection, other types of inspections are advisable as well, depending on a variety of particulars such as age, condition and location.

Sometimes, if a buyer discovers an unexpected defect, the buyer might negotiate further with the seller. A buyer might threaten to cancel a transaction unless a seller agrees to conditions set forth in a request for repair.

Even if a buyer is satisfied with the results of the buyer's inspections, your house is not yet sold.

Is Your House Sold After the Buyer's Loan is Approved?

After all of the buyer's supporting documents have been received by the lender and the appraisal completed, the file goes to underwriting. The underwriting process can take anywhere from a few days to a few weeks.

The appraisal must support the agreed-upon purchase price. If the appraiser submits a low appraisal, more negotiations will take place or a new appraisal might be ordered. But even after the loan is approved, your house is not yet sold.

Is Your House Sold After All Contingencies are Met and Released?

A buyer might need to close escrow on an existing home before the buyer can move forward with buying your home. This is known as a contingent sale, and that contingency might need to 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 in cash the entire purchase price, your home might not be completely sold, especially if the buyer, upon default, could be held liable only for liquidated damages.

When Is Your House Sold?

While you can consider your house is sold at any point along the line of home selling, your home is considered sold when you no longer own it. Your house is sold when the deed has exchanged hands and / or is recorded, and the funds have been disbursed.