Summary. A home purchase is the largest transaction most people ever enter, conducted on a form contract, on a compressed timeline, with the parties represented in some states by lawyers and in others by no one. This guide walks it in order: the offer and purchase agreement, including the contingencies that are the buyer's only real protection and the deadlines that silently waive them; seller disclosure and the limits of an as-is sale; the inspection and what to do with the findings; title review and what an owner's policy covers; the survey; financing and the federal disclosure timeline; HOA documents; the closing and the settlement statement; and post-closing steps.

A couple buys a house for $540,000. They waive the inspection contingency to make their offer competitive, on the advice that in this market "nobody gets an inspection."

They still hire an inspector for information. The report identifies an active roof leak, evidence of prior water intrusion in the basement, and a furnace at the end of its service life. Because the contingency was waived, they have no right to renegotiate or to withdraw. They close.

Six weeks later the basement floods during a heavy rain. The repair — a French drain, a sump system, and remediation — is $34,000. The roof is another $18,000.

Their remaining recourse is the seller's disclosure statement, which said "no known water intrusion." Litigating it will cost $40,000 and turn on what the seller actually knew, which is provable only from documents the buyers do not have.

What they gave up to win the bidding was not an inspection. It was the right to act on what the inspection found — which is what the contingency actually protects, and which is worth far more than the few thousand dollars people think they are risking.

Before the offer

Financing preparation. Obtain a preapproval, not a prequalification. A preapproval reflects a lender's review of documented income, assets, and credit, and it is what a seller will take seriously. Understand the difference between the preapproved amount and what is affordable — lenders qualify on ratios that ignore the buyer's actual budget.

Know the total cost, not the payment: principal and interest, property taxes, homeowners insurance, private mortgage insurance if the down payment is under 20 percent, HOA dues, utilities, and maintenance — which for an older home is not optional.

Assemble the team. A real estate agent, with a clear understanding of whom they represent. In some transactions the agent is a buyer's agent with a fiduciary duty to the buyer; in others the agent is a subagent of the seller, or a dual agent or transaction broker with divided or no fiduciary duties. Ask, and get the answer in writing — most states require an agency disclosure, and most buyers do not read it.

A lawyer, in the states where it is customary or required. Attorney states — including New York, New Jersey, Massachusetts, Connecticut, Delaware, Georgia, South Carolina, and others — expect counsel on both sides, and in several, only an attorney may conduct the closing. In escrow states, a title or escrow company handles the closing and no lawyer is involved unless the buyer retains one. In a transaction of this size, counsel costs a fraction of one percent and is worth it in any state.

Understand the market's customs, because they determine what is negotiable: who pays title insurance, who selects the closing agent, whether the seller pays transfer taxes, what the customary earnest money is, and how long inspection periods run.

The offer and the purchase agreement

Most residential transactions use a standard form promulgated by a state association or a bar association. The form is negotiable, and the blanks and the addenda are where the deal is made.

Core terms:

  • Purchase price and the earnest money deposit — amount, when delivered, who holds it, and the conditions for its return.
  • The property — address, legal description, tax parcel, and what is included: appliances, fixtures, window treatments, mounted televisions, and anything else the buyer expects to remain. Disputes over what conveys are among the most common closing-day problems and are entirely preventable by listing.
  • Closing date and possession — and whether they are the same. If the seller will remain after closing, a post-closing occupancy agreement with a daily rate, an escrow holdback, and an insurance allocation is essential.
  • Deed type to be delivered.
  • Allocation of closing costs, transfer taxes, and title charges.
  • Seller concessions, if any, and whether the lender permits them.
  • Prorations of taxes, HOA dues, and utilities.
  • Default remedies — what happens if the buyer or seller fails to close.

Contingencies are the buyer's protection, and each has a deadline that operates automatically:

  • Inspection / due diligence — the right to inspect and, depending on the form, to request repairs, renegotiate, or terminate. This is the most important contingency in the contract.
  • Financing — the right to terminate if the buyer cannot obtain a loan on stated terms. Specify the loan type, amount, and maximum rate; a financing contingency that says only "buyer to obtain financing" is nearly meaningless.
  • Appraisal — the right to terminate or renegotiate if the property appraises below the price. Distinct from the financing contingency, and separately waivable.
  • Title — the right to review and object to title matters.
  • Survey — the right to obtain and object to survey matters.
  • HOA document review, with a statutory period in many states.
  • Sale of the buyer's current home, with a kick-out clause permitting the seller to continue marketing.
  • Insurability — the right to terminate if the property cannot be insured at a reasonable cost, which now matters enormously in wildfire, flood, and coastal markets.

The deadlines are self-executing. In most forms, failing to give written notice by the deadline waives the contingency and makes the deposit at risk. Calendar every one the day the contract is signed, and give notice in the form the contract requires — email is frequently insufficient if the notice provision specifies otherwise.

Waiving contingencies in a competitive market is a real decision with real consequences, and buyers should understand what each waiver actually forfeits:

  • Waiving inspection forfeits the right to act on defects, not the ability to discover them.
  • Waiving appraisal means the buyer must cover any shortfall in cash.
  • Waiving financing means the deposit is at risk if the loan does not close.
  • An escalation clause raises the buyer's price automatically against competing offers, and should cap the increase and require proof of the competing offer.

Earnest money. Held by a neutral escrow agent, not by the seller or the seller's agent. Understand the release mechanism: most forms require mutual written instructions to release, which means a disputed deposit sits in escrow until the parties agree or a court decides — a reason to be precise about the conditions.

Seller disclosure and the limits of "as is"

Most states require a written seller disclosure of known material defects, on a prescribed form, delivered within a defined period. The obligation is generally limited to actual knowledge; the seller is not required to investigate.

Common disclosure items: roof, foundation, and structural issues; water intrusion and drainage; plumbing, electrical, heating, and cooling; pests and infestation; environmental hazards including lead paint, asbestos, radon, and mold; boundary disputes; easements; HOA matters; prior insurance claims; unpermitted work; deaths on the property in a few states; and flood history.

Federal lead-based paint disclosure, 42 U.S.C. § 4852d, applies to housing built before 1978: the pamphlet, disclosure of known hazards and available records, and a 10-day opportunity to conduct a risk assessment unless waived in writing.

"As is" sales. An as-is clause allocates the risk of defects the buyer could have discovered — it does not license the seller to conceal or misrepresent. In nearly every state a seller remains liable for:

  • Affirmative misrepresentation of a material fact;
  • Active concealment — painting over a stain, hiding a crack;
  • Failure to disclose a known material latent defect that is not reasonably discoverable, in states imposing that duty; and
  • Statutory disclosure violations, which an as-is clause generally cannot waive.

Caveat emptor survives in a small number of states with limited exceptions, and its scope is narrower everywhere than sellers assume.

Practical guidance for buyers: read the disclosure carefully before the inspection and give it to the inspector, so the inspection can test the seller's answers. A disclosure saying "no known water intrusion" alongside a basement with fresh paint on one wall is a place to look.

Practical guidance for sellers: disclose. The cost of disclosing a known issue is a price adjustment; the cost of concealing it is rescission, damages, and in several states statutory penalties and fees.

The inspection

The general inspection is a visual, non-invasive examination of the accessible systems and components. A competent inspector examines the roof, exterior, structure, foundation, basement or crawlspace, plumbing, electrical, heating and cooling, insulation and ventilation, interior, and built-in appliances.

What a general inspection does not cover, and what to order separately when indicated:

  • Sewer scope — a camera through the lateral to the main. On any home more than about thirty years old, and any home with mature trees, this is the highest-value few hundred dollars in the transaction. A collapsed or root-invaded lateral is a five-figure repair.
  • Radon test, which is inexpensive and is significant in much of the country.
  • Termite / wood-destroying organism inspection, frequently required by the lender.
  • Mold assessment where there is evidence of moisture.
  • Structural engineer where the inspector notes foundation movement, sloping floors, or significant cracking.
  • Roof specialist where the roof is near the end of its life.
  • HVAC technician for a full evaluation of an older system.
  • Chimney inspection with a camera for any wood-burning system.
  • Well and septic — flow rate, water quality, and a septic inspection with the tank pumped and the drain field evaluated.
  • Pool and spa, oil tank location and testing where common, asbestos in pre-1980 homes with certain materials, and electrical panel issues involving known-defective brands.
  • Environmental — flood zone status, wildfire risk, and any site-specific concern.

Attend the inspection. The written report is a summary; the two hours walking the house with the inspector is where the buyer learns what matters.

Reading the report. Separate:

  1. Safety items — electrical hazards, gas leaks, structural concerns, missing detectors.
  2. Major systems near end of life — roof, HVAC, water heater, sewer, electrical panel — which are budget items even if functioning.
  3. Active leaks and water intrusion, which cause the most consequential damage.
  4. Deferred maintenance — the accumulation that tells you how the house was treated.
  5. Cosmetic items, which are not negotiating points.

What to do with it:

  • Request repairs — the seller repairs before closing, with the work performed by a licensed contractor and a receipt provided, and a re-inspection right.
  • Request a credit — frequently better, because the buyer controls the work and the quality. Note that lenders limit seller credits and that a credit cannot exceed actual closing costs in many loan programs.
  • Request a price reduction — which affects the appraisal and the loan amount.
  • Accept and proceed.
  • Terminate, within the contingency period, and recover the deposit.

Unpermitted work deserves separate attention. Ask whether permits were pulled for any addition, finished basement, deck, or system replacement. Unpermitted work can mean an uninsurable condition, a demand from the municipality to remove or permit it retroactively, an appraisal that excludes the square footage, and a title or resale problem later.

Title and survey

The title commitment is the title company's promise to insure on stated terms. Read all of it, and read the exceptions.

  • Schedule A — the proposed insured, the policy amount, the estate, the vested owner, and the legal description. Confirm the seller is the record owner and that the legal description matches.
  • Schedule B-I — requirements to be satisfied before the policy issues: payoff and release of the existing mortgage, satisfaction of liens, evidence of authority, and recording the deed.
  • Schedule B-II — exceptions, which are everything the policy will not cover. This is the operative list.

Exceptions to read carefully:

  • Easements — utility, drainage, access, and shared driveway. Plot them; an easement crossing the back yard where the buyer intends a pool is a material problem.
  • Covenants, conditions, and restrictions — which can restrict use, require architectural approval, prohibit fences or outbuildings, and impose assessments.
  • Mineral, oil, and gas reservations, which in some regions permit surface entry.
  • Encroachments — a neighbor's fence, shed, or driveway over the line.
  • Rights of parties in possession, and any existing lease.
  • Unrecorded matters and matters a survey would disclose, which are standard exceptions.

Deleting the standard exceptions requires a current survey and an owner's affidavit. In many residential transactions the survey is skipped, and the standard exceptions remain — which means the policy does not cover boundary problems, encroachments, or unrecorded easements. Whether to obtain a survey is a real decision, and it should be made knowingly rather than by default.

What a survey shows that a title report does not: the boundaries relative to the improvements; the location of every plotted easement; encroachments in both directions; setback compliance; fence lines relative to the boundary; and access to a public right of way.

Title insurance:

  • The lender's policy insures the lender's interest, in the loan amount, and is required. The buyer usually pays for it.
  • The owner's policy insures the buyer, in the purchase price, for as long as the buyer holds an interest. In some markets the seller customarily pays; in others the buyer does; and in some it is not offered unless requested. Buy it. It is a one-time premium, and it is the only protection against a forged deed, a missing heir, a prior lien, a defective foreclosure, or a fraudulent conveyance in the chain.
  • Enhanced or extended owner's policies are available in most states for a modest premium increase and cover additional matters — post-policy forgery, encroachments, building permit violations by a prior owner, subdivision law violations, and restrictive covenant violations — with defined limits. For most residential buyers the enhanced policy is worth the difference.
  • Endorsements worth asking about: location, contiguity, restrictions and encroachments, and environmental protection lien.

Common title problems and their resolution: an old mortgage never released (obtain a satisfaction); a judgment or tax lien against the seller or a similarly named person (payoff or an affidavit of identity); a probate gap (a determination of heirship); a boundary encroachment (an agreement, an easement, or a corrected deed); an unreleased mechanics lien (payoff or bond); and an easement of record that the buyer must simply accept.

Financing and the disclosure timeline

The application. A loan application under Regulation Z is triggered when the lender receives six pieces of information: name, income, Social Security number, property address, estimated property value, and loan amount.

The TRID timeline, under Regulation Z and Regulation X:

  • Loan Estimate — within three business days of application, and at least seven business days before closing.
  • Closing Disclosure — the borrower must receive it at least three business days before consummation. Three changes require a new three-day period: an increase in the APR beyond tolerance, a change in the loan product, or the addition of a prepayment penalty.
  • Tolerances — certain charges may not increase at all (the lender's own charges, transfer taxes); others may increase up to 10 percent in aggregate (services the borrower may shop for, from a provider on the lender's list); and others may change without limit (prepaid interest, insurance, escrow deposits, and services the borrower shopped for outside the list).

Compare the Closing Disclosure to the Loan Estimate, line by line, when it arrives. Increases beyond tolerance must be cured by the lender, and this is the buyer's leverage — but only if someone reads it.

Loan types: conventional (conforming or jumbo), FHA (lower down payment, mortgage insurance premium for the life of most loans), VA (no down payment, funding fee, no mortgage insurance), and USDA (rural, income-limited). Each has property condition requirements that can require repairs before closing — FHA and VA appraisals identify conditions that must be corrected, which becomes a negotiation with the seller.

Terms to understand: fixed versus adjustable, and for an ARM the index, margin, adjustment frequency, and caps; points and whether paying them makes sense given the expected hold period; rate lock — the period, the cost, and the extension terms; private mortgage insurance and how it terminates under the Homeowners Protection Act (automatic at 78 percent loan-to-value based on the original amortization schedule, and cancellable on request at 80 percent, subject to conditions); escrow for taxes and insurance and whether it is required; and prepayment penalties, which are prohibited or limited on most qualified mortgages.

The appraisal. Ordered by the lender. A low appraisal means the lender will lend only against the appraised value, and the buyer must bring the difference in cash, renegotiate, or terminate under an appraisal contingency. The buyer is entitled to a copy of the appraisal under ECOA's valuation rule, promptly upon completion and no later than three business days before consummation.

Insurance. Obtain a quote early, not the week before closing. In wildfire, flood, coastal, and hail-exposed markets, coverage may be unavailable, extraordinarily expensive, or subject to a large percentage deductible — and a buyer who discovers this at closing has no options. Check the CLUE report for the property's claims history, verify flood zone status and whether flood insurance is required, and confirm the wind or hail deductible.

Homeowners associations

If the property is in a common interest community, the association's documents govern a great deal of what the buyer may do.

Obtain and read, within the statutory review period most states provide:

  • The declaration of covenants, conditions, and restrictions — use restrictions, architectural approval requirements, leasing restrictions, and pet limits.
  • Bylaws and rules, including any rules adopted by the board that do not appear in the declaration.
  • The budget and current financial statements.
  • The reserve study and reserve balance — an underfunded reserve means a special assessment is coming.
  • Meeting minutes for the past year, which disclose disputes, litigation, and planned projects.
  • The resale certificate or estoppel, which states the current dues, any unpaid assessments against the unit, any pending special assessment, and any violation of record.
  • Insurance — what the association covers and what the owner must insure, which determines the owner's policy requirements.
  • Pending litigation, which can make a unit unfinanceable.

The items that produce surprises:

  • Leasing restrictions — a cap on the number of rented units, a minimum ownership period before leasing, or an outright prohibition. A buyer intending to rent should confirm this before the offer.
  • Special assessments already approved or reasonably foreseeable from a reserve study.
  • Deferred maintenance in a building with an aging envelope, roof, or elevator.
  • Age-restricted communities, which are lawful under the Housing for Older Persons Act only if the exemption's requirements are met.
  • Litigation or FHA/VA approval status in a condominium, which affects both financing and resale.
  • Architectural approval requirements for anything visible, including a fence, a shed, a door color, or solar panels — noting that a number of states now protect solar installations and electric vehicle charging by statute notwithstanding association rules.

The closing

Prepare in the week before:

  • Review the Closing Disclosure against the Loan Estimate and against the contract. Question every difference.
  • Confirm the wire instructions by voice callback to a known number obtained independently — never from an email. Wire fraud in real estate closings is common, sophisticated, and generally unrecoverable. Fraudulent instructions arriving from a spoofed or compromised email account are the single largest financial risk in the transaction.
  • Confirm the payoff figures and that all Schedule B-I requirements are satisfied.
  • Confirm insurance is bound effective on the closing date, with the lender named.
  • Conduct the final walkthrough — within 24 hours of closing. Confirm: the property is in the agreed condition; agreed repairs were completed with receipts; included items remain; the seller's belongings are removed; systems operate (run every faucet, flush every toilet, test the HVAC, open every window); and no new damage occurred during move-out.

The settlement statement, reviewed line by line:

  • Purchase price and earnest money credit.
  • Loan amount, points, origination, and lender fees.
  • Prepaid interest from closing to the first payment.
  • Escrow deposits for taxes and insurance.
  • Title charges — lender's and owner's premiums, search, examination, and settlement fees.
  • Recording fees and transfer taxes, allocated per contract or custom.
  • Prorations — property taxes (verify the method and the tax year; this is frequently computed incorrectly), HOA dues, and any prepaid items.
  • Seller credits and repair credits.
  • Survey, inspection, and appraisal charges.
  • Commissions.
  • Payoffs of the seller's liens.
  • Cash to close, which should match what the buyer was told.

Documents the buyer signs: the note, the mortgage or deed of trust, the Closing Disclosure, the loan application reaffirmation, an occupancy affidavit, an escrow authorization, the title company's documents, and various affidavits. Read the note and the security instrument — the rate, the term, the payment, the prepayment terms, and the escrow requirement.

Documents the seller signs: the deed, an owner's affidavit, a FIRPTA certification (or withholding applies if the seller is a foreign person), a bill of sale for personal property, and lien releases.

Deed types, in descending order of protection:

  • General warranty deed — the grantor warrants title against all defects, including those arising before the grantor's ownership.
  • Special (limited) warranty deed — warrants only against defects arising during the grantor's ownership. The commercial norm and increasingly common residentially.
  • Bargain and sale deed, with or without covenants, depending on the state.
  • Quitclaim deed — conveys whatever interest the grantor has, with no warranty. Appropriate between family members or to clear a cloud; not appropriate for a purchase.

How to take title, which has real consequences and is decided in a hurry at the closing table:

  • Sole ownership.
  • Tenants in common — separate, devisable shares, no survivorship.
  • Joint tenants with right of survivorship — the survivor takes automatically.
  • Tenancy by the entirety, available to married couples in many states — survivorship plus creditor protection against a creditor of only one spouse.
  • Community property, and community property with right of survivorship, in community property states — with a significant income tax advantage on the death of a spouse, because the entire property receives a stepped-up basis rather than half.
  • A revocable living trust, which avoids probate on the property and is frequently the right answer for a buyer with an estate plan. Confirm the lender permits it, which most do.

Decide this before closing, with tax and estate planning input, not at the table.

Recording. The deed and the security instrument are recorded promptly. The title policy issues afterward — confirm it arrives, and read it.

After closing

  • Confirm recording and obtain the recorded deed.
  • Confirm the title policy issued and matches the commitment.
  • File for exemptions — the homestead exemption, senior, veteran, or disability exemptions — which in some states must be filed within a defined window and can reduce property tax materially.
  • Confirm the tax assessor has the correct mailing address, and understand that a sale frequently triggers reassessment.
  • Set up utilities, and confirm the seller's accounts closed.
  • Change the locks and any garage or alarm codes.
  • Register with the HOA and set up dues payment.
  • Confirm the first mortgage payment date and whether the loan was sold — servicing transfers require notice under RESPA, and payments must go to the new servicer.
  • Verify escrow analysis in the first year; shortages produce a payment increase.
  • Store the closing package permanently, including the settlement statement, which establishes basis for capital gains purposes decades later. Keep receipts for every capital improvement for the same reason.
  • Update the estate plan — deed into a trust if that was the plan, and update beneficiary designations.
  • Schedule maintenance — HVAC service, gutters, and the deferred items the inspection identified.

A worked example

A buyer purchases a 1968 ranch for $415,000.

Offer. Written with inspection (10 days), financing (21 days, specifying a conventional 30-year fixed at not more than a stated rate), appraisal, title, and insurability contingencies. All deadlines calendared the day the contract is signed, with notice to be given by the method the contract specifies.

Disclosure. The seller discloses a roof replaced in 2011 and no known water intrusion. Counsel notes the property is pre-1978 and confirms the lead paint disclosure and pamphlet were delivered with the 10-day inspection opportunity.

Inspection. The general inspection identifies an aging furnace, a subpanel with double-tapped breakers, and moisture staining on a basement joist. The buyer orders a sewer scope, which reveals a root-invaded clay lateral, and a radon test at 6.1 pCi/L.

Response. Rather than a repair list, the buyer requests a $14,500 credit — sewer lateral replacement, radon mitigation, and the electrical corrections — with a licensed electrician's estimate attached. The seller counters at $10,000 and agrees to replace the sewer lateral before closing with a permit and a receipt. The buyer accepts, and the contingency is released in writing before the deadline.

Title. The commitment shows a 1974 utility easement across the rear ten feet and an unreleased 1998 mortgage. The title company obtains the satisfaction. The buyer orders a survey, which plots the easement and reveals that the neighbor's shed encroaches eighteen inches over the line. The parties obtain a recorded encroachment agreement, and the standard exceptions are deleted. The buyer purchases an enhanced owner's policy.

Financing. Loan Estimate compared to the Closing Disclosure; a $340 increase in a zero-tolerance lender charge is identified and cured. The appraisal comes in at $418,000.

Insurance. Bound three weeks before closing after the buyer discovers that two carriers declined the property because of the roof age; a third writes it with a documented roof inspection.

Closing. Wire instructions verified by voice callback. Final walkthrough confirms the sewer work and the receipt. Prorations checked — the tax proration was computed on the prior year's bill, and the buyer's counsel corrects it, saving $610. Title taken as community property with right of survivorship, on the tax advice that it produces a full basis step-up.

After. Homestead exemption filed within the window. Closing package stored. Radon mitigation installed in month two with the credit.

Frequently asked questions

Do I need a lawyer? Required or customary in a number of states, and worth retaining in any of them. The fee is a fraction of one percent of the transaction.

Should I waive the inspection contingency? Understand what you are giving up: not the inspection, but the right to renegotiate or walk based on what it finds. In a competitive market, a shortened period or an information-only inspection with a narrow termination right is a better compromise than a full waiver.

Is an owner's title policy worth it? Yes. It is a one-time premium covering forged deeds, missing heirs, prior liens, and defective foreclosures — none of which an inspection or a search will reliably reveal, and any of which can cost the whole property.

Do I need a survey? If you skip it, the standard exceptions remain and boundary problems, encroachments, and unrecorded easements are uninsured. On any property with a fence, a shared driveway, an outbuilding, or a plan to build, get one.

What does "as is" mean? That the buyer takes the property in its condition — not that the seller may conceal or misrepresent. Statutory disclosure duties and fraud liability survive an as-is clause in nearly every state.

The appraisal came in low. Now what? Bring cash for the difference, renegotiate, contest the appraisal with comparable sales, or terminate under an appraisal contingency if you preserved one.

Can I close if the seller has not made the agreed repairs? Not on the agreed terms. Options are an escrow holdback with a defined completion deadline, a credit at closing, or delaying the closing. Do not close on a promise.

How should I take title? It depends on marital status, estate plan, creditor exposure, and state law — and in community property states it has a significant income tax consequence. Decide before closing day, with advice.

Conclusion

A home purchase is a series of deadlines attached to a form contract, and nearly every problem traces to a deadline missed or a document unread.

Four things protect a buyer. The contingencies, with their deadlines calendared and notices given in the required form — because they are the only right to change course the buyer has. The inspection, plus the specialized inspections the general one does not cover, particularly the sewer scope on any older house. The title commitment's Schedule B-II and a survey, which together are the only way to know what the buyer is actually acquiring. And verifying wire instructions by voice, which prevents the one loss in this transaction that is both catastrophic and unrecoverable.

None of that is expensive relative to the purchase price. All of it is expensive to skip.

Related articles

This guide is provided for general informational purposes and does not constitute legal, tax, or financial advice. Real property law, disclosure duties, closing customs, and title practice vary substantially by state. Consult qualified counsel in the property's jurisdiction before signing a purchase agreement or waiving a contingency.