What happens after my bid gets accepted?
Within a few days of your offer getting accepted, you’ll sign a preliminary purchase agreement. This is usually drafted by the seller. The contract describes the house, the price, the date the deal will close and the obligations of the buyer and the seller.
This purchase agreement is preliminary because it includes cancellation clauses, which are means for the contract to be cancelled if something doesn’t go right.
It’s a good idea to include a few cancellation clauses of your own. You’ll want to be able to cancel if you’re unable to obtain a mortgage, for instance. (This is commonly known as a restriction of finance clause.) You may also want a clause that allows you to cancel or negotiate a lower price if the home inspection doesn’t go well. Additionally, you’ll want to be able to back out if you’re not able to obtain a National Mortgage Guarantee, which is like insurance that covers you if you can’t pay your mortgage due to unemployment, divorce or being unable to work.
No matter what clauses are in the purchase agreement, you’ll always have the right to terminate the contract within three business days of signing it.