Home Buying Process — Step Three
October 28, 2022

Home Buying Process — Step Three

This is the third and final in a series on the home buying process.

After weeks (or months!) of planning, searching, and browsing, you’ve finally found the perfect home. While it may seem like the hard part is over, there’s much more to do before you get the keys. It’s not as simple as making an offer and writing a check — there’s a lot that goes into the final stages of the homebuying process. Negotiations, contingencies, and closing can be a bit complex, especially for first-time buyers, so it’s best to be armed with information to help the process go more smoothly. Luckily, your agent will be by your side from beginning to end.


 The Offer

If you’ve read the first in our series on buying a home, the Home Buying Process — Step One, you know the importance of securing financing ahead of time. By now, you’ve gotten your finances in order, obtained a down payment, and have your pre-approval letter in hand, so you’re ready to shop for a mortgage. You should have an idea about how much you can afford, which, naturally, will determine the amount you should offer.

Many factors go into making an offer, the most important being the local market. As we enter into a more balanced market, buyers may have more room to negotiate. It depends on demand, comparable sales, and the home’s condition and location. Your agent can make recommendations that are right for your individual situation.

Offers typically include what’s known as an initial deposit amount. This sum, typically 1–3 percent of the purchase price, indicates to the seller that you are serious about your offer. It’s not required, but it can make a potential buyer stand out when multiple offers are on the table. If the offer is accepted, this amount goes toward the final costs. The funds are typically refundable if the buyer cancels the offer during the contingency period.



One of the most important elements of any offer is contingencies. These clauses indicate that the agreement will proceed only under certain conditions.  The three most common real estate contingencies include financing, appraisal, and home inspection. More details are as follows:

  • Financing. This is one of the most common contingencies. In essence, it states that the sale is dependent on the buyer being approved for a mortgage. However, this contingency isn’t needed if the buyer is paying with cash.
  • Appraisal. Lenders require this standard contingency to ensure the appraised value is at or above the sales price. In other words, banks do not want to loan more money than a house is worth.
  • Inspection. This contingency covers various topics, for example, a home, pest, roof, and pool. The inspector(s) will thoroughly check every inch of the property for defects, damage, or pests. Should they uncover something, you may have an opportunity to renegotiate, or in some cases, you may elect to cancel the transaction.

Contingencies can be just about anything the buyer or seller can dream up if both parties agree to them. Contingencies run the gamut, from buyers wanting to secure a new job first (especially when moving to a new city) to one buyer who included a clause that the home pass muster with a feng shui expert!



A buyer has three options when it comes to offers: acceptance, declination, or counteroffer. When a counteroffer is made, the negotiation period begins. Counteroffers can include many different requests, but most commonly, the seller will ask to change the offer price or exclude requests for repairs. This back-and-forth can take time, but your agent can advise you on the best tactic. For example, if you offer $600,000 on a home, the seller can come back and ask for $625,000. You can respond by agreeing to $615,000 and ask the seller to make a needed repair. Or, ask the seller to throw in an appliance or piece of furniture.



Once your offer is accepted, the buyer will schedule the home inspection, which is a thorough assessment of every element of a home, from mechanical functioning to structural soundness. Common areas of inspection include the roof, foundation, chimney, electrical, and plumbing. Pest inspections are also common to ensure a home hasn’t been damaged from wood-destroying insects such as termites.

It should be noted that every home inspection will turn up something less-than-perfect. What’s important is the severity of the problem. For example, faulty wiring or structural damage may be a deal breaker, but outdated appliances or peeling paint can be overlooked. Although there are no fixes that are legally required in California, the seller wants to sell, and the buyer wants to buy, so there may be a meeting of the minds along the way.


Release of Contingencies

Prior to closing on the sale, the contingencies will have to be released. This means all inspections, agreed-upon repairs, appraisal, and financing have been satisfied. Once all contingencies are met, they are released, and the sale can proceed.



Closing refers to the recording of the property in your name with the County Recorder’s office. The typical period from start to finish is about 30 days. During this time of the sale, the buyer will be presented with documents, which include disclosures, title documents, insurance information, and other paperwork. Your agent can help you navigate these items. There will also be closing costs associated with the sale, which include various fees and taxes, some of which are paid for by the seller and some by the buyer. Prior to move-in day, buyers will typically conduct a final walkthrough of the home, in which they can make sure the property is in the agreed-upon condition, and all negotiated repairs have been made. Once everything is in order, it’s time to get the keys to your new home!

Buying a home is complex and nuanced and is one of the most rewarding aspects of adult life — after all, it’s where you spend most of your time, watch your children grow up, and celebrate with friends and family. It’s also one of the biggest investments an individual will ever make, so it’s crucial to approach the process with prudence. A skilled, experienced real estate professional can help guide you through your journey and work to ensure you find the perfect place to call home.



Category Real Estate

Elizabeth Penney

Elizabeth Penney is a content writer for Lyon Real Estate and the Lyon Local blog. A Sacramento native with a marketing background, she shares her insider knowledge on restaurants, attractions and outdoor activities throughout the greater Sacramento area and beyond.