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Consumers: Home buying steps

Steps in the home buying transaction

Once you make the decision to buy a particular house, there are several phases remaining in the process that must occur before you become its legal owner. See below for brief descriptions of the process ...

Offer to Purchase

You, as the prospective buyer, must sign an offer to purchase the extremely important document. When the seller accepts an offer, it becomes a contract and you can be compelled to buy the property on the terms stated. 

Your offer to purchase should clearly set forth the following terms:

  • The total price you agree to pay;
  • Anything in the house or attached to it you intend to buy. 
  • If you want the appliances and anything else to remain with the house;
  • Down payment and financing terms;
  • The amount of earnest money accompanying the offer;
  • When the transaction will “close” or title will transfer;
  • When you will take possession of the property;
  • Provisions for title searches, insect, structural and other inspections.

Payment of deposit, or earnest money

A deposit is put down at the time the offer is made. While you are not required to make such a deposit, one is usually made to indicate to the seller how serious you are about buying the property.

Acceptance of the offer

Your REALTOR will present your offer to the seller. If after making this offer you decide you do not want to purchase the property, you may revoke the offer, but only if it has not been accepted. If it has not, and you want to revoke your offer, you should immediately notify your REALTOR. 

Title examination and inspections

Most purchase agreements are conditioned upon a title search that guarantees that there are no liens on the property, including whether the seller is involved in a bankruptcy. This is done by professionals who examine the records of the transfers of ownership of the property, mortgages, and other claims on it. If someone else has a claim to the property, the seller’s title to it is not “clear.” You are not obligated to complete the purchase in that case. 

If a termite or other kind of inspection is called for, it is made before closing. If you have any doubts as to the condition of the property (such as roof, furnace, plumbing, etc.), you should make the favorable inspection a condition of the contract. Without such a contingency, an unfavorable inspection will not be grounds for failing to purchase the property.

Arranging financing

You are expected to arrange financing as soon as possible after your offer has been accepted. If you haven’t been pre-approved, loan processing can take from 30 to 90 days.

Obtaining insurance

Lenders typically will not let you close the deal on your home purchase if you do not have homeowners’ insurance. If you have not already obtained insurance you will need to do so. 


Most closings today are done in “escrow,” where the title company acts as the agent for both parties, and is paid by both. However there are still face-to-face meetings of the buyer, the seller, the REALTORS and the representative of the lender. The closing can take place at the lender’s office, title office or at agreed upon locations such as the real estate brokerage.


To establish your clear title to the property, the deed you receive must be recorded in the Recorder’s office of the county where the property is located. This will usually be done by the escrow agent, the lender, or by your attorney. You should be sure this has been arranged and will be done as soon as possible after the closing. Request a copy be provided to you.