Before You Submit an Offer
The strongest offers come from buyers who have done their homework well before finding the right house. If you haven't already, review the pre-offer readiness checklist to confirm your finances and documents are in order.
The two foundational steps are getting pre-approved for a mortgage and establishing a realistic budget. A pre-approval letter — issued after a lender reviews your income, assets, and credit — tells sellers you are a serious, qualified buyer. It is different from a pre-qualification, which is a less rigorous estimate. Most sellers in competitive markets will not entertain an offer without one.
You'll also want a clear picture of your total purchasing power. Your budget isn't just the purchase price — factor in your down payment, closing costs, moving expenses, and a cash reserve for early repairs. If you're still weighing whether buying makes sense at all, the rent-versus-buy comparison can help you think through the long-term trade-offs.
Get Pre-Approved Before You Shop
Schedule your mortgage pre-approval before you begin touring homes in earnest. The process typically takes a few days and gives you a realistic ceiling to shop within. Many listing agents require proof of pre-approval before they'll even schedule a showing in a competitive market.
Making an Offer and Negotiating
When you find a home you want, your real estate agent will help you draft a purchase offer — a legally binding document that specifies the price you're offering, the proposed closing date, and any contingencies you want included.
Contingencies are conditions that must be met for the sale to proceed. Common ones include a financing contingency (the sale is void if your mortgage falls through), an inspection contingency (you can renegotiate or exit after reviewing the inspection), and an appraisal contingency (the home must appraise at or above the purchase price). These protect you — but in hot markets, buyers sometimes waive them to compete. Understand the risk before doing so.
You'll also submit earnest money — a good-faith deposit, typically 1–3% of the purchase price, held in escrow. If you walk away without a valid contingency, you generally forfeit this money.
The seller may accept, reject, or counter your offer. Negotiations can involve price, closing timeline, seller concessions (credits toward your closing costs), or items left with the home. Once both parties sign, the contract is executed and you move into the escrow period.
30–60 days
Typical escrow period after contract signing
The National Association of Realtors reports the average time from contract to close is typically around 30–45 days, though it varies by transaction and market.
2–5%
Closing costs as a share of loan amount
The Consumer Financial Protection Bureau notes that closing costs generally range from 2% to 5% of the loan amount, covering lender fees, title, and prepaid expenses.
1–3%
Earnest money deposit as share of purchase price
Earnest money norms vary by market; in competitive markets deposits can be higher to signal commitment to the seller.
Under Contract: What Happens Next
Being "under contract" means the purchase agreement is signed but the sale isn't final. A period of activity — often 30 to 60 days — now begins. The most critical task in this window is the home inspection.
A licensed inspector examines the property's major systems: roof, foundation, plumbing, electrical, HVAC, and more. You'll receive a written report detailing any deficiencies. Based on the findings, you can request repairs, ask for a price reduction, accept the home as-is, or — if your inspection contingency is intact — walk away.
Don't Skip the Home Inspection
A home inspection is one of the most important safeguards in the entire buying process. Even new construction can have material defects. The cost — typically $300–$500 — is modest compared to the potential expense of undisclosed foundation issues, faulty wiring, or a failing HVAC system. Always hire a licensed inspector and attend the inspection in person so you can ask questions directly.
You'll also order a title search during this period. A title company reviews public records to confirm the seller has clear legal ownership and that there are no outstanding liens or encumbrances on the property. You'll typically purchase title insurance to protect against any claims that surface after closing.
Unfamiliar with terms like escrow, lien, or contingency? The housing market glossary provides plain-language definitions for these and dozens of other terms you'll encounter throughout this process.
The Mortgage Process During Escrow
Even with a pre-approval in hand, your lender still needs to formally underwrite your loan — that is, verify everything in detail before committing funds. This process runs in parallel with the inspection and title work.
You'll submit a full loan application and provide documentation: W-2s, recent pay stubs, tax returns, bank statements, and more. The lender will order an independent appraisal to confirm the home's market value supports the loan amount.
Avoid making any large purchases or opening new lines of credit between contract signing and closing. Even a new car payment can shift your debt-to-income ratio enough to trigger additional underwriting scrutiny.
Lenders re-verify your credit and finances close to the closing date; changes to your financial picture after pre-approval can delay or derail final loan approval.
Always verify wire transfer instructions by calling your title company or escrow officer directly using a phone number you independently sourced — never rely on contact details provided in an email.
Wire fraud targeting real estate closings is a documented and growing problem; fraudsters intercept closing emails and substitute fraudulent account details, resulting in losses that are rarely recoverable.
Underwriting can take one to three weeks. The underwriter may issue conditions — additional documents or explanations required before final approval. Respond quickly; delays on your end push back the closing date. Avoid making any large purchases, opening new credit accounts, or changing jobs during this period, as these actions can alter your financial profile and jeopardize your approval.
Once underwriting is complete, you'll receive a Closing Disclosure — a five-page document listing your final loan terms, monthly payment, and itemized closing costs. Federal law requires lenders to provide this at least three business days before closing, giving you time to review it carefully.
The Final Walk-Through and Closing Day
Shortly before closing — typically 24 hours before — you'll do a final walk-through of the property. This is your chance to verify that any agreed-upon repairs were completed, the home is in the expected condition, and nothing has been removed that was supposed to stay.
On closing day, you'll sign a substantial stack of documents at a title company, escrow office, or attorney's office (requirements vary by state). Key items include the promissory note (your promise to repay the loan) and the deed of trust or mortgage (which gives the lender a security interest in the home). You'll wire or bring a cashier's check for your down payment and closing costs — wire instructions should be verified directly with your closing agent to guard against fraud.
Once all documents are signed, funds are disbursed, and the deed is recorded with the local government, the home is legally yours. You'll receive the keys.
After you move in, the real work of homeownership begins. See our guide to home maintenance for first-time owners to learn which systems to monitor and which tasks to prioritize in your first year.
This article provides general educational information about the home buying process and is not legal, financial, or real estate advice. Processes, requirements, and timelines vary by state and individual circumstance. Consult a licensed real estate agent, attorney, or financial professional for guidance tailored to your situation.
