Summary. A home purchase is the largest contract most people ever sign, and it is signed under time pressure with an agent explaining the paperwork. This article covers what the purchase agreement does, how earnest money and contingencies work, the shift from caveat emptor to disclosure duties, what title insurance actually protects against, what each deed type warrants, what RESPA and TILA require and when, and the remedies when a deal collapses.

Consider what actually happens when someone buys a house.

They see a property on a Saturday. By Sunday evening they have signed a contract, typically a preprinted form, committing them to a purchase price that exceeds their net worth, financed by a loan they have not yet applied for, on a property they have spent ninety minutes inside, subject to conditions they did not draft and have probably not read. They wire a deposit to an account they were told about by email. Thirty to forty-five days later they sit at a table, sign between forty and eighty documents in about an hour, and receive a key.

This is completely normal, and it works most of the time, because the transaction has been engineered over two centuries to work with laypeople as the principals. But the engineering is invisible, and when something goes wrong, the parties discover that a great deal of consequential law was operating in the background the entire time.

This article makes that law visible. It is organized in the order the transaction happens.

Part I: The contract, and why the writing is everything

A contract for the sale of land must be in writing. This is the statute of frauds, adopted in every state, and it means an oral agreement to sell a house is unenforceable no matter how clearly it was made or how many witnesses heard it. The writing must identify the parties, describe the property with reasonable certainty, state the price or a method of determining it, and be signed by the party to be charged.

The practical consequence is stark: everything the parties agreed to must appear in the document. The seller's promise to leave the washer and dryer, the verbal assurance about the roof, the handshake about a delayed closing date — none of it survives unless it is written down. And because nearly every residential purchase agreement contains a merger clause making the writing the entire agreement, the parol evidence rule closes the door behind the statute of frauds. See How Courts Read Contracts.

The form is not neutral. Most residential deals use a form promulgated by a state realtors association or a state bar. These forms are generally balanced, but they contain default allocations — who pays for what, how many days each contingency runs, what happens to the deposit in a dispute — that the parties can change and usually do not. Reading the blanks is not enough; the printed text is where the deal actually lives.

What the agreement must settle:

  • The parties, in the exact names that will take title, and how title will be held — sole ownership, tenants in common, joint tenants with right of survivorship, tenants by the entirety where available, or a trust or entity. This decision has estate, creditor, and tax consequences and is far easier to make now than to change later.
  • The property, by legal description, not just street address, and what is included: fixtures, appliances, window treatments, mounted televisions, the shed, the fuel in the oil tank.
  • The price, the earnest money, and the financing structure.
  • The contingencies, each with a deadline and a stated consequence.
  • The closing date, and whether time is of the essence. This phrase matters: without it, courts generally allow a reasonable delay; with it, a party who is not ready on the date is in breach.
  • Possession — at closing, or later, and if later, under what written occupancy agreement and at what daily rate.
  • Risk of loss before closing, and who insures.
  • Prorations of taxes, utilities, HOA dues, and rent.
  • Default remedies, discussed in Part IX.

Part II: Earnest money

Earnest money is a deposit demonstrating the buyer's seriousness. It is typically 1% to 3% of the price, though competitive markets push it far higher.

Where it goes matters. The deposit should be held by a neutral escrow agent — a title company, an attorney's trust account, or a brokerage escrow account — not by the seller. Funds held by the seller are funds you may have to sue to recover.

When the buyer gets it back: when a contingency is properly and timely invoked; when the seller defaults; when the deal fails for a reason the contract assigns to the seller (an uncurable title defect, for instance).

When the seller keeps it: when the buyer defaults without a contingency to stand on, or lets a contingency deadline pass and then tries to invoke it.

The release problem. Escrow agents will generally not release deposited funds without written instructions signed by both parties or a court order. This means a buyer who walks away improperly can tie up their own deposit for months, and a seller who unreasonably refuses to sign a release can do the same to a buyer who was entitled to the money. Many state forms now include a mechanism — a demand, a waiting period, and a default release — to break this deadlock. Know whether yours does.

Wire fraud is the single largest practical risk in a modern closing. Criminals monitor real estate email, then send the buyer wiring instructions that look exactly like the settlement agent's, sometimes from a lookalike domain, sometimes from a genuinely compromised account. The money leaves and does not come back. Call the settlement agent at a number you independently verified — not one from the email — and confirm the wiring instructions verbally before sending anything. Do this every time, including for the final closing funds, and treat any last-minute change of instructions as fraud until proven otherwise.

Part III: The financing contingency

Most buyers cannot close without a loan, and the financing contingency is what makes the contract escapable if the loan does not come.

A good financing contingency states: the loan amount, the loan type, a maximum interest rate the buyer must accept, the deadline to obtain a commitment, and what happens if the deadline passes. A weak one says only that the buyer will apply for financing — which can leave a buyer bound after a denial.

Pre-qualification, pre-approval, and commitment are three different things. Pre-qualification is a conversation. Pre-approval is a conditional underwriting decision based on documents. A commitment is the lender's binding agreement to lend, subject to stated conditions. Only the last one is worth much, and even commitments carry conditions — a satisfactory appraisal, clear title, no material change in the borrower's finances.

The buyer's obligation is good faith. A buyer must actually apply, promptly, provide requested documents, and not sabotage the loan. Buying a car in the underwriting window, changing jobs, or opening a credit line has killed a great many closings, because lenders re-pull credit and re-verify employment shortly before funding.

Waiving the financing contingency is common in competitive markets and is a genuinely dangerous move: the buyer becomes obligated to close whether or not the loan materializes, and if it does not, the earnest money and potentially more is at risk.

Federal ability-to-repay rules apply to the lender's side. 15 U.S.C. § 1639c requires creditors to make a reasonable, good-faith determination of the consumer's ability to repay before making a residential mortgage loan, with a safe harbor for qualified mortgages. This is why underwriting asks for so much documentation, and why a self-employed buyer's file is thicker than a salaried buyer's.

Part IV: The appraisal, and the gap

The lender will order an appraisal, and it protects the lender, not the buyer. If the appraised value comes in below the contract price, the lender will lend against the lower number.

A worked example. Contract price $520,000; buyer putting 20% down and borrowing $416,000. The appraisal comes in at $495,000. The lender will now lend 80% of $495,000 — $396,000. The buyer must cover a $25,000 gap in cash on top of the original down payment, or renegotiate, or walk if an appraisal contingency permits it.

Options when the appraisal is low: renegotiate the price; split the difference; the buyer pays the gap in cash; challenge the appraisal with better comparables (rarely successful, but not never); or terminate under an appraisal contingency.

Appraisal gap coverage — a clause in which the buyer agrees to pay up to a stated amount above appraised value — is now common in competitive offers and should be written with a cap, not open-ended.

Appraisal bias is a live regulatory issue. Valuation discrimination in residential appraisals is actionable under 42 U.S.C. § 3605, which reaches discrimination in residential real estate-related transactions including appraisals, and under 15 U.S.C. § 1691, the Equal Credit Opportunity Act. Lenders must have a process for a borrower to request reconsideration of value.

Part V: Inspection, and the difference between disclosure and diligence

The inspection contingency gives the buyer a window — typically 7 to 14 days — to inspect and then to accept, request repairs or credits, or terminate. Its scope is negotiable and the differences matter enormously:

  • Right to terminate for any reason in the buyer's sole discretion — the strongest.
  • Right to terminate for defects exceeding a dollar threshold — common.
  • Right to request repairs, with the seller free to refuse and the buyer then free to leave — common.
  • Right to inspect for information only, with no right to terminate — a waiver in disguise, and it appears in competitive-market offers more often than buyers realize.

Get these inspections, at minimum: a general home inspection; a sewer scope on any older property (a collapsed lateral is a five-figure surprise); a radon test in affected regions; a termite or wood-destroying organism inspection; a roof evaluation if the general inspector flags one; and, for a well and septic property, water quality testing and a septic inspection. Add mold, structural engineering, chimney, and pool inspections where indicated.

What a home inspection is not: a warranty, a code compliance certification, or a guarantee that nothing will break. Inspectors are limited to what is visible and accessible, and their contracts limit their liability aggressively — frequently to the cost of the inspection itself.

Part VI: Seller disclosure and the decline of caveat emptor

The old rule was caveat emptor — let the buyer beware. A seller who said nothing owed nothing. That rule has been eroded almost everywhere, by three different mechanisms.

1. Statutory disclosure forms. Most states now require a seller to complete a standardized residential property disclosure covering the roof, foundation, systems, water intrusion, prior repairs, environmental hazards, boundary issues, and known defects. The statutes vary on whether the form is a warranty (usually not) and on the remedy for a false answer (frequently actual damages, sometimes more).

2. The judicial duty to disclose latent material defects. Even without a statute, most states now hold that a seller who knows of a defect that is material, not readily observable, and not known to the buyer must disclose it. Concealment — painting over a water stain, running a dehumidifier during showings — is affirmative fraud in every state.

3. Federal lead-based paint disclosure. For target housing built before 1978, 42 U.S.C. § 4852d requires the seller to disclose known lead-based paint and hazards, provide any available records and reports, give the buyer the EPA pamphlet, and allow a 10-day period to conduct a lead assessment (waivable by written agreement). The statute provides for treble damages for knowing violations, and it is one of the few federal hooks in an otherwise state-law transaction.

The recurring disputes: water in the basement; a roof replaced without permits; a stigmatized property (a death, a crime — treated differently by state, with several statutes expressly providing that such facts need not be disclosed); a neighbor dispute; boundary encroachments; and unpermitted work, which is the sleeper problem because it surfaces at the buyer's own resale.

As-is clauses do less than sellers hope. An "as-is" sale generally means the seller will not repair; it does not license fraud, and it does not usually override a statutory disclosure duty.

Part VII: Title — the part nobody understands and everybody pays for

The buyer is not really buying a house. The buyer is buying title — a bundle of rights in the land — and the whole apparatus of searches, commitments, and insurance exists to establish that the seller has what they are purporting to convey.

The title search examines the public record for the chain of ownership and for anything encumbering it: mortgages and deeds of trust; judgment liens; tax liens, including federal tax liens; mechanic's liens; easements; restrictive covenants; HOA declarations; leases; mineral and water rights reservations; and pending litigation affecting the property.

Marketable title is title free from reasonable doubt and from defects that would expose the buyer to litigation. It is not perfect title; a minor, unenforceable, ancient restriction generally does not make title unmarketable.

The title commitment is the insurer's promise to issue a policy, and it has two schedules that must actually be read:

  • Schedule B-I — Requirements: what must happen before the policy issues (payoff of the existing mortgage, release of a lien, a corrective deed, a probate).
  • Schedule B-II — Exceptions: what the policy will not cover. This is where the easement across the back yard, the setback restriction, the shared driveway agreement, and the mineral reservation live. Read Schedule B-II before the objection deadline. It is the most consequential document in the transaction that buyers routinely never open.

Title insurance comes in two flavors. The lender's policy protects the lender for the loan amount and is required by every lender; the buyer usually pays for it and receives nothing from it. The owner's policy protects the buyer for the purchase price. It is optional in most places, costs a one-time premium, and is nearly always worth buying, because it covers what a search cannot find: forged deeds, undisclosed heirs, prior owners' unrecorded interests, recording errors, and defects in the chain that no reasonable examination would reveal. Ask for the enhanced or extended owner's policy and compare the additional coverage; it is often a modest premium increase for materially broader protection.

Survey. A current survey identifies encroachments, boundary discrepancies, and whether improvements sit inside the setbacks. It is optional in many transactions and is the cheapest insurance against the fence dispute that arrives with the next-door neighbor's contractor.

Part VIII: Deeds, and what each one promises

The deed conveys title. Which deed the seller signs determines what the seller is promising.

Deed What the grantor warrants
General warranty deed Title is good against all defects, whenever arising, including before the grantor owned it. The strongest — and the norm in most residential sales.
Special (limited) warranty deed Title is good against defects arising during the grantor's ownership only. Common with institutional sellers, relocation companies, and REO.
Grant deed (some states) Grantor has not conveyed to anyone else and has not encumbered the property, except as disclosed.
Bargain and sale deed Grantor purports to own, but warrants nothing (with or without covenants against the grantor's own acts).
Quitclaim deed Conveys whatever interest the grantor has, if any, and warrants nothing at all. Fine between spouses or to clear a cloud; almost never appropriate in an arm's-length sale.

The classic warranty deed covenants are seisin, right to convey, against encumbrances, quiet enjoyment, warranty, and further assurances. The first three are present covenants that are breached, if at all, at delivery and start the limitations clock then; the last three are future covenants breached only on eviction or disturbance.

Part IX: The closing

What federal law requires. Two statutes govern the disclosures.

The Real Estate Settlement Procedures Act, 12 U.S.C. § 2601 et seq., implemented by Regulation X, 12 C.F.R. Part 1024, governs settlement services. Its two most consequential provisions: § 2607 prohibits kickbacks and unearned fees for referrals of settlement business — which is why the referral arrangements between agents, lenders, and title companies are so carefully papered — and § 2605 governs servicing transfers and escrow accounts, and gives borrowers the right to send a qualified written request that the servicer must answer.

The Truth in Lending Act, 15 U.S.C. § 1601 et seq., implemented by Regulation Z, 12 C.F.R. Part 1026, requires cost-of-credit disclosure. The two statutes' disclosures were merged into the TRID framework, which produces the two documents a buyer actually sees:

  • The Loan Estimate, delivered within three business days of application, stating the estimated loan terms, projected payments, closing costs, and cash to close.
  • The Closing Disclosure, which must be received at least three business days before consummation. Certain changes — an increase in the APR beyond tolerance, a change in loan product, or the addition of a prepayment penalty — restart that three-day clock.

Use the three days. Compare the Closing Disclosure against the Loan Estimate line by line. Some fees may not increase at all; some may increase only within a 10% aggregate tolerance; others may change freely. An unexplained jump is a question to ask before signing, not after.

Refinances and home equity loans on a principal residence carry a three-business-day right of rescission under TILA. Purchase-money loans do not. This surprises people constantly: there is no cooling-off period after buying a house.

What happens at the table: identity verification; execution of the note and the mortgage or deed of trust; the deed signed by the seller and notarized; the settlement statement reviewed and signed; funds disbursed; and the deed and security instrument sent for recording. In some states an attorney must conduct the closing; in others a title company or escrow agent does, and the parties may never be in the same room.

Bring: government photo identification, certified funds or a completed wire (verified by phone), proof of homeowners insurance with the lender named, and the file.

Part X: When the deal breaks

Buyer defaults. The seller's remedies depend on the contract, and most forms give the seller a choice: retain the earnest money as liquidated damages, sue for actual damages, or seek specific performance. Liquidated damages clauses are enforceable if the amount is a reasonable pre-estimate of loss and actual damages would be difficult to calculate — a deposit that functions as a penalty can be struck.

Seller defaults. The buyer may sue for damages, but the distinctive remedy here is specific performance — an order compelling conveyance — which is routinely available in real estate because land is treated as unique and money damages are considered inadequate by definition. A buyer pursuing specific performance should also record a lis pendens, a notice of pending action that clouds title and prevents a sale to a third party, subject to the state's rules and to the risk of a slander-of-title claim if the underlying suit is groundless.

Contingency failures should terminate the contract cleanly and return the deposit — if the notice was given in writing, in the form the contract requires, before the deadline. Almost every deposit fight comes down to a notice given late or given informally.

Fraud and nondisclosure claims after closing face two obstacles: the as-is clause and the merger doctrine, under which the contract's obligations merge into the deed at closing. Neither bars a fraud claim, but both narrow the ground, which is why post-closing claims tend to succeed only where there is evidence the seller knew — a repair invoice, an insurance claim, a prior inspection report, an email.

Part XI: Agents, brokers, and who works for whom

A real estate agent's duties depend on the agency relationship, and the relationship is frequently not what the parties assume.

  • Seller's agent — owes fiduciary duties to the seller: loyalty, obedience, disclosure, confidentiality, accounting, and reasonable care.
  • Buyer's agent — owes the same duties to the buyer.
  • Dual agent — represents both, permitted in some states with written informed consent and prohibited in others. A dual agent cannot advocate for either side on price, which is a significant loss of value that buyers and sellers rarely appreciate when they consent.
  • Transaction broker / facilitator — a limited, non-fiduciary role recognized in several states.

Every agent owes honesty and, in most states, disclosure of known material defects to all parties, regardless of who they represent.

Commission structures are changing. Litigation over cooperative compensation has reshaped how buyer-agent compensation is offered and negotiated, and buyer representation agreements stating the buyer's obligation are now standard. Read yours: it states what your agent is paid, by whom, and what happens if the seller's side offers less.

Part XII: Fair housing in the transaction

The Fair Housing Act reaches sales as well as rentals. 42 U.S.C. § 3604 prohibits discriminatory refusal to sell, discriminatory terms, and discriminatory advertising; § 3605 reaches lending and appraisal; and § 3617 makes it unlawful to coerce, intimidate, threaten, or interfere with the exercise of fair housing rights. 42 U.S.C. § 1982, the Reconstruction-era statute construed in Jones v. Alfred H. Mayer Co., 392 U.S. 409 (1968) to reach purely private racial discrimination in property transactions, remains independently available and has no administrative exhaustion requirement.

Steering — directing buyers toward or away from neighborhoods based on protected characteristics — remains a common violation, and it is frequently done by well-meaning agents who think they are being helpful. Blockbusting, redlining, and discriminatory appraisal are all prohibited. See Fair Housing and Lending Discrimination.

Part XIII: A transaction, day by day

Abstractions become concrete on a calendar. Here is a conventional 40-day purchase with a loan.

Day 0 — Offer accepted. The contract is fully executed. This is the day to calendar every deadline in it, because from here the transaction is a series of expiring rights.

Day 1. Earnest money wired — after a phone call to the settlement agent at an independently verified number confirming the instructions. Loan application submitted; the clock for the Loan Estimate starts.

Day 2–3. Loan Estimate received. Inspections ordered: general, sewer scope, radon, termite. Title order opened.

Day 4. The lead-based paint disclosure period runs on a pre-1978 house — 10 days unless waived in writing.

Day 7. General inspection performed. The report identifies a 22-year-old roof, a sewer lateral with root intrusion, and a subpanel with double-tapped breakers.

Day 9. Inspection response delivered in writing, in the form the contract requires. The buyer requests the sewer repair and the electrical correction, and accepts the roof with a $6,000 credit. Note what is happening: the buyer is trading the items that are dangerous or expensive against the item that is merely old.

Day 11. Negotiated: seller repairs the sewer lateral with a licensed plumber and provides the invoice; seller credits $4,500 at closing; buyer accepts the electrical as-is. Amendment signed by both parties. Verbal agreement here would be worthless — the statute of frauds reaches modifications of a land contract in most states.

Day 12. Title commitment received. Schedule B-II discloses a utility easement along the rear ten feet and a 1961 restrictive covenant limiting outbuildings. The buyer had planned a detached garage. This is why the objection deadline matters — a buyer who reads Schedule B-II on day 12 has options; one who reads it after closing has a garage they cannot build.

Day 14. Title objection deadline. The buyer objects to nothing but obtains a survey, which reveals the neighbor's fence sits 2.3 feet inside the boundary. The seller obtains a signed boundary line agreement before closing.

Day 18. Appraisal ordered by the lender.

Day 24. Appraisal returns $9,000 under contract price. The parties split it: seller reduces $4,500, buyer brings $4,500.

Day 30. Loan commitment issued, conditioned on a final employment verification and a satisfactory homeowners policy. Financing contingency deadline is day 32; the buyer does not waive it until the commitment is in hand.

Day 33. Homeowners insurance bound with the lender named as mortgagee. Buyer stops using credit entirely.

Day 36. Closing Disclosure received — the three-business-day clock starts. The buyer compares it against the Loan Estimate line by line and questions a $650 increase in a fee that should not have moved. It is corrected.

Day 39. Final walkthrough. The repairs were made; the invoices are produced; the seller's belongings are gone; the appliances that were supposed to convey are present.

Day 40 — Closing. Identification, note, mortgage, deed, settlement statement, funds. The deed and the security instrument go for recording that afternoon.

What made this transaction work was not sophistication. It was six mundane acts: calendaring the deadlines on day 0, calling to verify the wire, inspecting properly, giving written notice before every deadline, reading Schedule B-II, and using the three days.

Part XIV: Transactions with their own rules

New construction. The builder's contract is not the state form, and it is written for the builder: broad change-order rights, arbitration clauses, warranty disclaimers limited to a builder's express warranty, liquidated damages capped at the deposit, and completion dates that are estimates. Negotiate the warranty, the allowance schedule, and what happens if completion slips past the buyer's rate lock. Most states imply a warranty of habitability or workmanlike construction in the sale of a new home by a builder-vendor, and several prohibit waiving it.

Condominiums and HOA properties. The buyer is purchasing a unit and a governance relationship. Obtain and read the declaration, bylaws, rules, current budget, reserve study, insurance certificate, minutes for the past year, and a resale certificate or estoppel showing dues, assessments, and pending litigation. A pending special assessment is the classic surprise, and a reserve study showing chronic underfunding is a forecast of one. See Homeowners Associations and Condominium Law.

For sale by owner. No agent means no one is minding the deadlines, and both parties should have counsel. The disclosure duties are unchanged — a seller without an agent owes the same statutory and common-law disclosures.

Foreclosure and short sales. REO sellers convey by special warranty or bargain-and-sale deed, disclaim disclosures by statute in many states, sell strictly as-is, and use their own addendum that overrides the state form. A short sale requires lender approval, which can take months and is not binding until issued in writing; build a right to terminate if approval does not arrive by a date. Auction purchases are worse: often no inspection, no title insurance, and no warranty, with junior liens sometimes surviving. See Foreclosure and Mortgage Servicing.

Estate and trust sales. The seller must have authority — letters testamentary, a trustee certificate, or a court order — and in some states a sale requires court confirmation with an overbid process. Verify authority before the inspection money is spent.

Investment property. A seller reinvesting the proceeds may want a § 1031 like-kind exchange, which requires a qualified intermediary engaged before closing, identification of replacement property within 45 days, and acquisition within 180 days. A seller who takes the proceeds first has destroyed the exchange. Cooperation language belongs in the contract at the outset, and it costs the buyer nothing.

Assumable loans and seller financing. FHA and VA loans are often assumable with lender approval, which can be worth a great deal in a high-rate market. Seller financing raises its own issues — the Dodd-Frank loan originator rules and ability-to-repay requirements reach some seller-financed residential transactions, with narrow exclusions, and a due-on-sale clause in the seller's existing mortgage can be triggered by the conveyance.

Part XIV-A: The seller's side, briefly

Most of this article looks through the buyer's eyes. The seller's exposure is different and worth stating separately.

Disclose, in writing, everything you know. The temptation is to say as little as the form allows. The arithmetic runs the other way: a disclosed defect is negotiated once, at a price; an undisclosed defect that surfaces later is litigated, with the seller bearing fees, the cost of repair, and — where the concealment was deliberate — sometimes punitive damages. If you replaced a section of foundation in 2019, say so and attach the engineer's letter. It converts your biggest liability into a documented repair.

Fix the paperwork problems before listing. Unpermitted work is the single most common deal-killer late in escrow, because it surfaces during the buyer's diligence or the appraiser's visit and cannot be cured in the ten days remaining. Pull the permit history now. If the finished basement or the deck was never permitted, decide before listing whether to legalize it, price it, or disclose it — and understand that lenders may refuse to count unpermitted square footage in the appraisal.

Clear title early. A deceased co-owner never removed from the deed, an old mortgage never released, a judgment lien against a person with a similar name, a mechanic's lien from a contractor paid in cash — each takes weeks to clear and each can be identified by ordering a preliminary title search before you list. That search costs little and buys the one thing a seller under contract does not have: time.

Understand your remedies before you need them. If the buyer walks, what does your contract give you — liquidated damages capped at the deposit, or the right to pursue actual damages? Many form contracts make the deposit the seller's exclusive remedy, which means a buyer who breaches after you have turned away three other offers costs you the difference and you cannot recover it.

Know the tax picture. A seller who owned and used the home as a principal residence for at least two of the five years before the sale may generally exclude a substantial amount of gain — a figure that doubles for a married couple filing jointly. Partial exclusions exist for a move caused by employment, health, or unforeseen circumstances. Keep the improvement records: capital improvements increase basis and reduce gain, and the receipts for the kitchen you redid in 2016 are worth real money at sale. A seller who is not eligible for the exclusion, or who is selling investment property, should evaluate a § 1031 exchange before signing anything.

Occupancy after closing is a trap. A seller who needs to stay past closing should sign a written post-closing occupancy agreement with a daily rate, an escrowed security amount, an insurance allocation, and a hard outside date. Handing over the deed and staying on a handshake converts a seller into a tenant, and removing a tenant requires the eviction process described in Residential Landlord-Tenant Law.

Part XV: Frequently asked questions

Do I need a lawyer to buy a house? In several states, yes — an attorney must conduct the closing. Everywhere else it is optional and usually worth it for a few hundred dollars, particularly to review the contract before signing and Schedule B-II of the title commitment.

Can I back out after signing? Only through a contingency, properly and timely invoked, or by mutual agreement. There is no general cooling-off period for a home purchase.

Is the owner's title policy worth it? Almost always. The lender's policy protects the lender; only the owner's policy protects you, and it covers exactly the defects a search cannot find.

What is the difference between the Loan Estimate and the Closing Disclosure? The Loan Estimate comes within three business days of application and is an estimate. The Closing Disclosure comes at least three business days before closing and states the actual terms. Compare them.

The seller didn't tell me about the leak. Now what? Gather proof they knew — repair invoices, insurance claims, prior inspection reports, emails, neighbor testimony. Knowledge is the element that decides these cases.

Can a seller accept a better offer after signing my contract? No. A signed contract binds. A seller who tries may face specific performance, and a lis pendens will generally stop the second sale.

What does "time is of the essence" actually do? It makes the stated dates strictly enforceable. Without it, courts usually allow a reasonable delay.

Part XVI: For non-lawyers — the short version

  1. Get the contract reviewed before you sign it, not after. This is the highest-value hour in the transaction.
  2. Put every promise in the contract. Verbal assurances are worth nothing.
  3. Verify wire instructions by phone, using a number you looked up yourself, every single time.
  4. Read Schedule B-II of the title commitment before your objection deadline.
  5. Buy the owner's title policy, and ask about the enhanced version.
  6. Inspect thoroughly, including the sewer line on any older home.
  7. Do not open credit, change jobs, or buy a car between application and funding.
  8. Use the three days with the Closing Disclosure. Compare it to the Loan Estimate.
  9. Calendar every contingency deadline the day you sign, and give every notice in writing.
  10. Decide how you will hold title before closing, not at the table.

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Related documents

This article is educational and not legal advice. Residential real estate practice is state-specific: disclosure duties, deed forms, recording rules, closing customs, attorney involvement requirements, and remedies vary substantially. Consult counsel licensed where the property is located.