Before You Make an Offer
The home-buying process effectively begins before you ever set foot in an open house. Two foundational steps — securing mortgage pre-approval and doing your research — determine how competitive and prepared you'll be when it matters most.
Mortgage pre-approval is a lender's written commitment to loan you up to a specified amount, based on a review of your credit, income, assets, and debt. It differs from pre-qualification, which is a looser estimate. Sellers and their agents take pre-approval seriously; without it, many listing agents won't even schedule a showing in a competitive market.
Before submitting any offer, use this structured pre-purchase checklist to confirm you've covered finances, property research, and neighborhood due diligence. Skipping these steps can lead to costly surprises after you're already under contract.
Get Pre-Approved, Not Just Pre-Qualified
Pre-qualification is a quick estimate based on self-reported information, while pre-approval involves a formal credit check and document review. In competitive markets, sellers routinely reject offers backed only by pre-qualification letters. Take the extra step before you start making offers.
Submitting Your Offer
An offer is a legally binding document, not a casual expression of interest. Your buyer's agent will typically draft a purchase agreement that specifies the price you're willing to pay, your proposed closing date, the amount of earnest money you'll deposit, and any contingencies you want included.
Earnest money — usually 1% to 3% of the purchase price — signals good faith and goes into escrow. If the deal closes, it's applied toward your costs. If it falls through due to a contingency you exercised, you typically get it back. For a plain-language explanation of these terms, see our glossary of earnest money, escrow, and closing costs.
Common contingencies include financing (you must secure a mortgage), inspection (the home must pass inspection or the seller must agree to remedies), and appraisal (the home must appraise at or above the purchase price). Sellers may counter your offer on price, timeline, or contingency terms. Negotiation at this stage is normal.
Be Careful When Waiving Contingencies
In hot markets, buyers sometimes waive inspection or appraisal contingencies to make their offer more attractive. This can significantly increase your financial risk — if serious defects emerge or the home appraises low, you may have limited recourse. Understand exactly what you're giving up before agreeing to remove any contingency.
Under Contract: What Happens Next
Once both parties sign the purchase agreement, you are under contract — meaning the home is effectively off the market while you and the seller fulfill the agreed-upon conditions. This period, often called the escrow period, is typically 30 to 60 days.
During this window, several things happen simultaneously: your lender processes your full loan application, a title company searches the property's ownership history for any liens or disputes, and you schedule your inspection. Time is not on your side — most purchase agreements include deadlines for each contingency, and missing them can cost you your earnest money or the deal itself.
30–60
Typical days from contract to closing
According to industry data from the National Association of Realtors, the average time from contract to close has generally ranged between 30 and 60 days depending on loan type and market conditions.
2%–5%
Closing costs as share of purchase price
The Consumer Financial Protection Bureau notes that closing costs typically fall between 2% and 5% of the home's purchase price, in addition to the down payment.
1%–3%
Typical earnest money deposit range
Earnest money deposits commonly range from 1% to 3% of the purchase price, though amounts vary by local market norms and negotiation.
The Inspection and Appraisal Phase
A home inspection is an in-depth physical review of the property conducted by a licensed inspector you hire. It typically takes two to four hours and covers the roof, foundation, plumbing, electrical systems, HVAC, and more. You'll receive a written report detailing any issues found.
Based on the report, you can ask the seller to make repairs, offer a price reduction, or provide a credit at closing. The seller is not required to agree, and if negotiations stall, your inspection contingency allows you to walk away with your earnest money intact — within the timeline specified in your contract.
The appraisal is entirely separate. Your lender orders it to verify the home is worth what you're paying. If the appraised value comes in below the purchase price, you'll need to renegotiate, pay the difference out of pocket, or exit the deal via your appraisal contingency. This is one of the most common points where transactions stall — see why buyers lose homes they love for how to avoid common pitfalls at this stage.
Attend your home inspection in person whenever possible. Walking through the property with your inspector gives you a real-time understanding of any issues — the written report alone rarely conveys the same nuance.
Buyers who attend inspections consistently report feeling better prepared to negotiate repairs and more confident about what they're purchasing.
If your appraisal comes in low, don't panic — request a copy of the comparable sales the appraiser used and discuss with your agent whether a rebuttal or a second appraisal is warranted.
Appraisals are opinions of value, not absolute verdicts. Errors in comparable selection do occur, and a formal reconsideration of value is a legitimate tool buyers can use.
Finalizing Your Mortgage
After inspection and appraisal clear, your lender moves into underwriting — the formal process of verifying every piece of financial information in your application. An underwriter reviews your employment, tax returns, bank statements, and the appraisal report before issuing a clear to close, which signals your loan is approved and closing can proceed.
During underwriting, avoid any major financial changes: don't open new credit accounts, take on new debt, change jobs, or make large cash deposits without documentation. These actions can trigger delays or even a denial at the last stage. Your lender will issue a Closing Disclosure at least three business days before your closing date, itemizing every fee and cost you'll pay. Review it carefully and compare it to your Loan Estimate. Beyond your down payment, budget for closing costs that typically run 2% to 5% of the purchase price — a figure many first-time buyers underestimate. Our guide to the true cost of buying a home explains what's included.
Do Not Change Your Financial Picture During Underwriting
Opening a new credit card, financing a car, switching employers, or making large undocumented bank deposits during underwriting can trigger delays or cause your loan approval to be rescinded. Lenders often re-verify credit and employment right before closing. Keep your financial situation as stable as possible from pre-approval through the day you receive your keys.
Closing Day: What to Expect
Closing is the final transfer of ownership. You'll sign a significant stack of documents — covering the mortgage note, deed of trust, and various disclosures — either in person at a title company or attorney's office, or increasingly through remote online notarization where permitted by state law.
Before closing, do a final walkthrough of the property, typically within 24 hours of your scheduled closing time. Verify that any agreed-upon repairs were completed, the home is in the condition you expected, and no new damage has occurred. At the closing table, you'll provide your down payment and closing costs via wire transfer or certified funds — personal checks are generally not accepted.
Once all documents are signed and funds are confirmed, the deed is recorded with the local government and you receive the keys. At that point, the home is legally yours. If you're navigating this as a first-time buyer, the full first-timer's overview walks through each of these stages with additional context for those new to homeownership.
This article is for general informational purposes only and does not constitute legal, financial, or real estate advice. Consult a licensed real estate professional, attorney, or financial adviser for guidance specific to your situation.
The content on this site is for informational purposes only and is not a substitute for professional advice. Always consult a qualified professional for guidance specific to your situation.