The Home Buying Process Step by Step, From Pre-Approval to Keys

Buying a home is a sequence of decisions, deadlines and paperwork that can feel overwhelming the first time through. The good news is that the process follows a predictable order in most of the United States, even though contract forms, customs and timelines differ by state. This guide walks through the home buying process step by step, from mortgage pre-approval to getting the keys, and explains what your real estate agent typically does at each stage.

The timeline at a glance

Every purchase moves at its own pace, but this table shows a common sequence for a financed purchase. Cash purchases can move faster because there is no loan approval, and some steps, such as the appraisal, may be optional.

Step 1. Get your finances ready and get pre-approved

Before you tour a single home, talk to at least one lender. A pre-approval means the lender has reviewed your income, assets, debts and credit and is willing, subject to conditions, to lend up to a certain amount. A pre-qualification is lighter and based on what you report. Sellers and listing agents generally take a pre-approval more seriously.

People often ask, should you get pre-approved before finding a realtor? You can do it in either order, but having a pre-approval early helps you and your agent focus on homes you can actually buy. It also tells you the monthly payment, which matters more than the maximum loan amount. A lender may approve you for more than you are comfortable spending.

• Pull your credit reports and dispute errors before applying.
• Gather pay stubs, W-2s or tax returns, bank statements and ID.
• Compare Loan Estimates from more than one lender. The Consumer Financial Protection Bureau (CFPB) designed the Loan Estimate so offers are easier to compare.
• Avoid opening new credit or making large purchases until after closing.

Step 2. Choose an agent and sign a buyer agreement

A buyer's agent helps you search, evaluates homes, writes and negotiates offers, coordinates inspections and keeps the deal on schedule. Since the NAR settlement practice changes in August 2024, agents who participate in an MLS generally must have a written agreement with you before touring a home. That agreement should spell out the services, the length of the agreement and how the agent will be paid, including any amount you might owe if the seller does not cover it.

Ask candidates how many buyers they have represented recently in your target area, how they handle multiple-offer situations and who covers for them when they are unavailable. Compensation is negotiable, so do not be shy about discussing it.

Step 3. Search and tour homes

Your agent can set up MLS alerts that reach you quickly, and you can browse portals on your own. As you tour, keep notes on each home's condition, layout, noise, light and commute. In competitive markets, be ready to move within a day or two of a home listing. In slower markets, you may have time for second showings and more research.

What to look for beyond the listing photos

• Age of the roof, furnace, air conditioning and water heater
• Signs of water, such as stains, musty smells or fresh paint in odd places
• HOA rules, fees and any pending special assessments
• Flood zone status and likely insurance costs
• Property tax history, keeping in mind taxes may change after a sale

Step 4. Make an offer and negotiate

Your agent will pull comparable sales to help you pick a price, then draft an offer on the state or local contract form. Beyond price, the offer covers your earnest money deposit, financing type, closing date, contingencies, items included with the home and any request for seller concessions toward your closing costs.

The seller can accept, reject or counter. Once both sides sign, you are under contract, and the deadlines in the contract start running. Mark every deadline on a calendar. Missing one can cost you a contingency or your earnest money.

Step 5. Contingencies, earnest money and inspection

Contingencies are conditions that let you renegotiate or cancel without losing your deposit if something goes wrong. The most common are listed below, but the exact wording and deadlines come from your contract.

Earnest money is usually deposited with a title company, escrow agent or brokerage within a few days of signing. Amounts vary by market and price point. Before you send any money, call the title or escrow company at a phone number you find independently to confirm wiring instructions. Wire fraud targeting homebuyers is a real and well-documented risk, and the FBI and CFPB both warn about it.

The home inspection

A licensed or certified home inspector examines the structure, roof, plumbing, electrical, heating and cooling and other visible systems. Plan to attend at least the end of the inspection so the inspector can walk you through findings. Depending on the home, you might add a sewer scope, radon test, termite inspection, mold assessment or specialist review of the roof or foundation. After the report, your agent can help you ask for repairs, a credit or a price reduction, or exit the contract if your contingency allows it.

Step 6. Appraisal and underwriting

If you are financing, the lender orders an appraisal to confirm the home's value supports the loan. If the appraisal comes in below the contract price, the usual options are to renegotiate with the seller, bring extra cash, challenge the appraisal with better comparable sales, or cancel if your appraisal contingency allows. At the same time, an underwriter reviews your documents and may ask for more. Respond quickly to every request.

Meanwhile, shop for homeowners insurance, since lenders require proof of coverage before closing, and review the title commitment for any liens, easements or issues.

Step 7. Closing costs, final walk-through and closing day

Closing costs are fees and prepaid items beyond your down payment. They are often estimated at a few percent of the loan amount, but the real number depends on your loan, location and whether the seller contributes. Some states and localities charge transfer taxes, and customs differ on whether the buyer or seller pays them.

• Lender charges. Origination fees, discount points, credit report and underwriting fees.
• Third-party services. Appraisal, title search, title insurance, settlement or attorney fees, survey where required.
• Government fees. Recording fees and transfer taxes where applicable.
• Prepaids and escrow. Homeowners insurance, property tax reserves and prepaid interest.
• Agent compensation. Any buyer-agent fee you agreed to pay that the seller is not covering.

Under federal rules, you should receive your Closing Disclosure at least three business days before closing. Compare it with your Loan Estimate and ask your lender to explain any changes.

Within a day or so of closing, you will do a final walk-through to confirm the home is in the agreed condition, repairs were completed and included items are still there. At closing, you sign the loan and transfer documents, the loan funds, the deed is recorded and you get the keys. In some states, closing takes place at a title company. In others, an attorney conducts it, and some deals close by mail or electronically.

Your buying checklist

1. Check credit and set a comfortable monthly budget.
2. Get pre-approved and compare Loan Estimates.
3. Interview agents and sign a buyer agreement you understand.
4. Tour homes and take notes.
5. Make an offer with clear contingencies and deadlines.
6. Verify wiring instructions by phone, then deposit earnest money.
7. Schedule inspections immediately and review the report.
8. Negotiate repairs or credits, or cancel within your deadline if needed.
9. Respond quickly to underwriting requests and lock your rate when ready.
10. Buy homeowners insurance and review the title commitment.
11. Review the Closing Disclosure at least three business days before closing.
12. Do the final walk-through, sign and celebrate.

Every step goes more smoothly when you understand what is coming next. Ask your agent and lender to walk you through your specific contract dates on day one, and keep a shared calendar so nothing slips.

This guide is general information, not legal, tax or financial advice. Rules differ by state; confirm details with a licensed professional or your state real estate commission.