The Home Purchase Process, From Offer to Closing

Making an Offer

The offer is your formal proposal to purchase a property. It is written into a purchase agreement — a legally binding contract that spells out the price you're willing to pay, how you intend to finance it, your proposed closing date, and which contingencies apply. Before you reach this stage, you should already have a mortgage pre-approval letter and a clear sense of your budget. See our buyer's preparation checklist to confirm you've covered all the groundwork.

Your real estate agent will help you set an offer price by reviewing comparable sales (often called comps) in the area. In competitive markets, buyers sometimes offer above the listing price; in slower markets, there may be room to come in below it. Along with price, your offer should specify:

• The earnest money deposit amount
• Which items of personal property are included (appliances, fixtures)
• Contingencies for financing, inspection, and appraisal
• The proposed closing and possession dates

If you're new to the full process, our ground-up introduction to buying your first home covers how to get to this stage with confidence.

Negotiation and Acceptance

Once the seller receives your offer, they have three options: accept it outright, reject it, or issue a counteroffer. Counteroffers typically adjust price, closing date, or contingency terms. Each counteroffer legally voids the previous one, so stay organized and respond within the timeframes specified.

Negotiation often goes beyond just purchase price. Buyers commonly request seller-paid closing costs, specific repairs, or a home warranty. Sellers may push back on contingencies or ask for a faster close. The goal of this back-and-forth is a mutually accepted purchase agreement — signed by both parties — which officially puts the home under contract.

Once fully executed, the clock starts. Most agreements set a 30- to 60-day escrow period, during which both parties fulfill their respective obligations before title changes hands.

Opening Escrow and Earnest Money

Escrow is a neutral third-party arrangement — typically handled by an escrow company or an attorney, depending on your state — that holds documents and funds until all conditions of the sale are met. Opening escrow usually happens within a few business days of the signed contract.

At this point, you'll wire your earnest money deposit — a good-faith payment that signals serious intent. Earnest money is typically 1%–3% of the purchase price, though it can vary by market. This money is held in an escrow account and applied toward your down payment or closing costs at settlement.

Your escrow officer or closing attorney will also order a preliminary title report, which searches public records to confirm the seller has clear, marketable title to the property and flags any liens, easements, or encumbrances that must be resolved before closing.

Inspections and Contingencies

Most purchase agreements include a home inspection contingency, giving you the right to hire a licensed inspector to evaluate the property's condition — typically within 7–14 days of going under contract. Inspectors assess the structure, roof, plumbing, electrical systems, HVAC, and more. They do not assign a dollar value to repairs but document what they observe.

After reviewing the report, buyers can:

1. Accept the property as-is
2. Request the seller make specific repairs before closing
3. Ask for a price reduction or credit in lieu of repairs
4. Walk away under the inspection contingency without losing earnest money

Other common contingencies include the financing contingency (protecting you if your loan falls through) and the appraisal contingency (allowing you to renegotiate or exit if the home appraises below purchase price). Each has a defined deadline. Missing a contingency deadline without formally waiving it in writing can put your earnest money at risk.

Mortgage Underwriting and Appraisal

Once the inspection phase resolves, your lender moves into full underwriting — a thorough review of your credit, income, assets, employment, and the property itself. Even with a pre-approval in hand, underwriters may ask for updated bank statements, letters of explanation, or additional documentation. Respond quickly; delays here often delay closing.

In parallel, the lender orders an appraisal. A licensed appraiser visits the property and delivers an independent opinion of market value. If the appraisal comes in at or above the purchase price, the loan proceeds. If it comes in low, you have options: renegotiate the price with the seller, make up the difference in cash, or invoke your appraisal contingency to exit the deal.

Near the end of underwriting, your lender will issue a Closing Disclosure — a standardized document listing all final loan terms, monthly payment, and itemized closing costs. Federal law requires it be delivered at least three business days before closing, giving you time to review it carefully.

Closing Day and Beyond

Before signing anything, conduct a final walkthrough — ideally within 24 hours of closing. This is your chance to confirm the property is in the agreed-upon condition, that negotiated repairs are complete, and that nothing has been removed that should remain.

At the closing table (or via a remote signing, which some states permit), you'll sign a significant stack of documents — the deed of trust or mortgage note, the closing disclosure, transfer documents, and more. You'll also bring a cashier's check or initiate a wire transfer for your down payment and closing costs. Closing costs generally run 2%–5% of the loan amount and include lender fees, title insurance, prepaid homeowners insurance, and property tax escrow deposits. Be sure to review our overview of hidden costs of homeownership so you're not caught off guard in the months ahead.

Once all documents are signed and funds are disbursed, the deed is recorded with the county and you receive the keys. Ownership is officially yours. Now the work of making the home your own begins — from home organization to home improvement projects that add comfort and value over time.

This article is intended 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.