Buy Your House

House Buying Steps

Our free how-to guides are to help you organize the selling or buying process of your house in simple steps.

1. Ready to buy a house and submit an offer
2. Offer Received and Negotiating Your Offer
3. Accepted Offer
4. Review And Perform The Buyer Contingencies
5. Final Walkthrough and Review of Final Title Closing Documents3
6. Closing Process and Completing The Buying Of Your House

Buying your first house or upgrading to a new house is one of the biggest life transitions you will face. If you are ready to buy a house and want to have a smooth transaction, we’ve got you covered. We’ve picked the brains of leading realtors so you benefit from their depth of knowledge and don’t have to research all the legwork. Read on to avoid common pitfalls like missed inspections or incomplete offers. We’ll help you save time, money, and hassle in six steps.

1. Are you ready to buy a house and submit an offer package?

The first step is to decide that you’re ready to buy a house. This can mean you’ve saved up for a downpayment, been pre-approved by a lender, and of course, found a property that fits your budget and needs. Here are the steps to prepare and submit an offer:

What’s in an offer package

The offer package includes a few key components. First, you’ll need a purchase agreement contract drafted by a real estate agent. You’ll also want to include a pre-approval letter from your lender, and be ready with the earnest money.

Many buyers have found success with a personal letter. This, along with state-required documents, and contact information for both your title company and real estate attorney, make up the offer package. Here’s what you need to know about each element:

1. What’s in an offer packageA pre-approval letter from a lender states how much you can borrow to purchase a house. This is useful to have ahead of time to avoid disappointment or missed opportunities down the road. Without a pre-approval letter, you may place an offer on a property and be unable to secure a loan.Many buyers have found success with a personal letter. This, along with state-required documents, and contact information for both your title company and real estate attorney, make up the offer package. Here’s what you need to know about each element:

2. A pre-approval letter from a lender On the other hand, if you could qualify for a higher loan amount, you may underbid and lose the property. Find out more about pre-approval letters and why you should talk to more than one lender when preparing to purchase a home.

3. Required DocumentsDocumentation is necessary for the transaction to proceed. You will need a purchase agreement contract drafted by a real estate attorney or other qualified professional as well as a purchase agreement contract, disclosures, state-required docs, buyer’s title company, and real estate attorney information.The purchase agreement should contain:- Buyer and seller’s Identification details- Description of the property and its current condition- Contingencies and conditions- The rights and obligations of both parties- All items included in the sale, including appliances- Earnest money deposit amount- Closing costs (itemized according to who’s paying for what)- Closing date- Terms of possession (i.e. when you can move in)- Buyer’s and seller’s signatures You will also need a title company to verify that the property is free of any liens or encumbrances. The title company’s role is to verify that the seller has the right to sell the property. This includes legal ownership and that the property is free and clear of debts, liens, or encumbrances. If someone has taken a mortgage or other loan against the property, you don’t want to be stuck with that debt. Other required documentation will vary by state. For example, some states require a seller’s disclosure statement. Many states require an appraisal report. Later on, you can also ask for a property survey from the seller if they don’t provide one.

2. Offer Received and Negotiating Your Offer

Once you’ve made an offer, you should expect a few things. This is a normal part of the home-buying process. Sellers will often counter. This is the moment to pull out your reserves and see how much you can stretch beyond your initial offer to meet the seller’s needs. Ideally, you’ll reach a win-win that makes both parties happy. Get ready to negotiate. It is possible to make an offer with no contingencies but it is highly discouraged, unless, you are willing to purchase the house is it’s As-In Condition.

Expect a counteroffer

If you made an offer below the asking price, it is common for the seller to counter the offer. Even if your offer meets or exceeds the asking price, the seller may make a counteroffer. This can include an adjusted timeline, contingencies, or a higher asking price.

In today’s competitive markets, a seller may have received a better offer, but wants to sell to you because of your letter. In that case, they can also come back asking for a higher price or other requirements.

Anticipate what will be countered

Knowing that the seller will most likely counter, anticipating what will most likely be countered and how to best resolve it to make a win-win is a practical proactive step. This can include a higher price, longer or shorter closing time, or removal of contingencies.

Consider where you’re willing to compromise to meet the seller in the middle. Having a new offer ready can speed up the process and ensure an easy closing. Offering quickly, raising the down payment, being flexible with the closing date, increasing the EMD, and waiving contingencies can all help close the deal.

It can help to talk to the sellers and learn what they are looking for, then try to adapt your offer. Maybe they want a fast closing, or a high offer - pay attention to their needs to increase the chances of closing.

How to communicate

The best method to communicate and how to deliver the counter is usually over the phone or by email. Buyers can negotiate over the phone or email, depending on the seller’s preferences.

Once the details are worked out over email, phone, or text, commit to a written counteroffer. Therefore, it is encouraged to completely write a new offer and to not strike through and write over the initial submitted offer. However, if your situation requires that you use the initial offer make sure to strikethrough all points, write clearly what is agreed upon, and inital and date next to the revision. Most importantly, the sellers must also initial and date any and all revisions as well state with a date and signature of final acceptance.

3. An Accepted Offer

After the offer is accepted, you’re on the clock. You’ll need to make a list of contingency checks, submit the EMD, and send the signed purchase agreement to the title company, real estate attorney, loan officer, and any other professionals involved in the transaction.

Create a timeline of all contingency deadlines

Making a list of contingency deadlines is the first step after an offer is accepted because it requires the most moving parts. Your timeline will either be based on This requires scheduling all appointments to allow enough time.

Here are common contingencies to cover:

• A home inspection contingency - This ensures that the property is sound and in the declared condition.
• An appraisal contingency - This protects the buyer in case of overpricing or sudden market deterioration.
• A clear title contingency - This confirms that the seller has the right to sell the property, and there are no liens or encumbrances on the property.
• A home sale contingency - If your offer is contingent on selling your existing home, you’ll want to strategize and work quickly to get the property sold.
• A homeowner’s association contingency - This gives the buyer time to review HOA documentation before closing and to back out in case of undesirable clauses.
• A home insurance contingency - Lenders require home buyers to have a home insurance policy before loan approval. If the buyer cannot get insurance on the property, it’s possible the buyer or seller can walk away.
• A financing contingency - This protects buyers and allows you to back out in case you cannot secure a mortgage.

To meet these contingencies, at a minimum, you’ll need five appointments:

• A home inspection to ensure the house is structurally sound. This includes plumbing, electrical, HVAC, the roof, and the foundation.
• An appraisal, in many cases, this is required by your lender to confirm the home value.
• Real Estate Attorney approval.
• A meeting with your mortgage lender to secure financing, if not paying in cash.
• A call or email to the title company to ensure a clear title.
• A call or meeting to secure home insurance.

Submit EMD

Review the purchase agreement to confirm who to submit the earnest money deposit to and to make the deposit on or before the due date.

4. Review And Perform The Buyer Contingencies

After the offer is accepted, it's time to put the contingencies timeline into action. Make all the appointments and check that there are no additional inspections you’d like to perform. It’s worth leaving time in case an initial inspection turns up something unusual, and you need to investigate further or negotiate.

Perform all buyer's contingencies

Here is a list of the most common and time-sensitive contingencies:

• House inspection (roof, chimney, HVAC, plumbing, pest, well/septic, etc) This is due on or before the due date. Once satisfied, the buyer can remove this contingency via a signed addendum to the contract.

• EMD Due on or before the due date. The buyer or seller can remove this via a signed addendum once completed.

• Homeowner Association (HOA) DocumentsThe seller should submit HOA documentation to buyers, if applicable. This contingency review is due on or before the due date. The buyer can remove it with a signed addendum once satisfied.

• Attorney approvalThe buyer should submit all relevant documents to an attorney to review. This includes the purchase agreement, title work, HOA, municipal docs, etc. Attorney approval will protect the buyer from unpleasant surprises.This is due on or before the due date. The buyer can remove this contingency once satisfied with the attorney’s approval. Remove via a signed addendum.

• Title workYou need to receive title work from the seller’s title company. This ensures there are no liens, encumbrances, or mortgages on the property. This con Due on or before the due date and removed once satisfied via signed addendum.

• AppraisalThe appraisal notes the property value at the time of sale based on property condition and market conditions. The appraisal order and completion are due on or before the due date. The buyer can remove this contingency via a signed addendum once satisfied.

• Mortgage approvalEven with pre-approval, once the purchase agreement is signed, you must return it to the lender for final mortgage approval. Once the mortgage is “clear to close,” the sale can go ahead. Clear to close means the full value needed for the property has been approved, and the sale can proceed. This is usually the final step. The mortgage approval is due on or before the due date. The buyer is responsible for removing this contingency via a signed addendum once the mortgage is secured.

• Final workThe final work review is related to the house inspection. An example will be if the Seller is willing to repair or make improvements to the property. If there is such an agreement, the work done should be reviewed and completed before the agreed due date. The buyer is responsible for verifying the work is completed. It is also removed by a signed addendum to the purchase agreement.

• Final Walkthrough and Review Final Title Closing DocumentsThe final walk-through should be done on the day of closing or the day before. The purpose of the final walk-through is to confirm that the property remains in the same or better condition as when the purchase agreement was signed. See more about the final walk-through below.- Setup final walkthrough of the house The parties meet at an agreed location. Typically this is at a title company's physical address, but it can also be at a real estate attorney’s office or the realtor’s office. - Prepare Payment You will need to provide a certified check of the money required, if applicable. This can include their portion of the down payment and closing costs.

• ID's As the buyer, you will need to provide proper IDs as part of the closing process. The seller will also need to provide IDs.

• Closing documents Next, there are buyer closing documents that you will need to sign.

• Seller’s costs The seller will provide a certified check for the money required, if applicable.- Seller’s closing documents There are seller closing documents the seller will then need to sign. - Transfer of ownership Next, the seller will render all keys, electronics, warranties, etc. to the buyer.

• Transfer of title The title company will receive and handle all monies, including any disbursements such as seller proceeds, buyer proceeds, when applicable, and holdings, such as water bills. The title company will provide all pertinent documents to the buyer and seller.

Putting it all together

Buying a house is a significant step in anyone’s life. Whether you’re a first-time buyer or looking to upgrade, taking the time to understand the buying process can help avoid glitches along the way. With the support of a qualified real estate agent, you can research specs, make a fair market offer, follow up with inspections and appraisals, and finally close. Take it one step at a time, and you could soon be the owner of a new home or investment property.