Checklist of Steps When Buying a Home


(Prepared by Doug Hayman of Century 21 Rustic Realty)


The following are the chronological steps that a buyer typically takes when purchasing a home.  For further real estate information, visit my real estate website at


Step Number



Negotiate on the price of a home.  Once buyers/sellers have a mutual price, the buyers sign a Sales Agreement (also known as a binder), which stipulates the purchase price, the amount of money down on contract, the amount of cash on closing, and the mortgage amount.  The binder should stipulate the accepted offer conditional on an Engineer’s Inspection.  After the Engineer Inspection, sometimes prices are re-negotiated.  Also, note that buyers typically furnish the sellers with a pre-qualification letter from a financial institution, which stipulates their ability to qualify for the stipulated mortgage amount.  A pre-qualification letter is usually provided free to perspective buyers, from their financial institution.


Perform Engineer’s Inspection from a qualified licensed person.  A report should be furnished to the buyers, subsequent to the Inspection.


After the Engineer’s Inspection, if deal is still intact, the sellers’ attorney will draft contracts and send to the buyers’ attorney.


The buyers’ attorney reviews contract for any omissions or issues, and makes any necessary changes to it.  This may result in a couple of passes between attorneys, until both are satisfied with its content.


The buyers sign the contract and provide a check for down payment, as per the sales agreement.


After the buyers sign the contract and provide down payment check, the sellers need to sign off on the contract.  At this point, the down payment money will go into the sellers’ attorney's escrow bank account, which is a non-interest bearing account.  It is not refundable at this point, unless

the buyers do not qualify for the mortgage.


Once the down payment check is cashed and clears, you are at that      point considered to be in Full Contract, and you are safeguarded.  If the

buyers or the sellers renege on the deal after this point (and this rarely happens), the reneging party would be considered to be in breach of contract, and a lawsuit by the hurt party can result.  Keep in mind that until you are in Full Contract on this house, the seller can accept any

other offers on this house, and legally doesn't even have to tell you about it.  However, in the case where this happens, customarily the selling agent will inform the effected buyer, to see if they would like to make a "final best offer", in an attempt to retain the house. 


A Termite Inspection (if not performed already during the Engineering Inspection), will be ordered by the buyers’ attorney.  This typically costs about $ 85, and the onus is on the buyers to pay it.  If termites are found, it is usually incumbent on the seller to pay for a termite treatment (usually costs somewhere in the $ 1,000 - $ 1,500 range).  The selling real estate agent is typically informed of when the Termite Inspection happens, and is usually present for it.  Buyers never need to go to this.


The buyers need to take signed copy of the contract to their mortgage company to initiate the process of procuring a mortgage.  This may incur certain application fees, and will require the buyers to provide necessary financial documentation to the bank, unless they apply for a no-income check loan (which usually costs more in terms of interest rate points, than a conventional loan).


As part of the loan application, the bank will order an Appraisal, using their appraiser.  The selling real estate agent is usually notified of this when it happens, and will be present for it.   There is no need for the buyer to be present for this, since an on-the-spot appraisal value is never provided.  Typically, you will only hear feedback from this appraisal, if there is a valuation issue.


Once the appraisal passes, and the bank's underwriting department does all necessary work on their end, the buyers will be approved for their mortgage.  If buyers are not approved for their mortgage, the deal typically dies at that point, and all contract money is refunded to the buyers.


Next, the buyers’ attorney will order a Title Insurance report to be done on the home.  In essence, The purpose behind this is to make sure that nobody has a lien (i.e., can stake a claim) against the property.  This needs to be done legally, and can cost roughly on the order of 0.5 % - 1.0 % of the mortgage amount (prices will vary).


The mortgage institution or Title Company may require a new Survey (or an update to the existing one) to be ordered, should the need arise (a lot depends on how valid the existing survey is, and if the seller can furnish one).  The buyers will usually brunt the cost of this, unless the seller has made some changes to their home (for C.O.’s, for example).  In that instance, the seller typically bears the brunt of the cost.  Surveys vary in price anywhere from $ 100 - $ 750, typically.


When Title comes back clean, the buyers’ attorney, the sellers’ attorney, and the bank attorney will arrange for a Closing Date, that meets all parties needs.  If the contract stipulates a close date, the seller and the buyer can legally push that date out as much as 30 days.


The selling real estate agent will need to schedule a "walk-through" of the house prior to the close date.  It behooves the buyer to schedule it as close to the closing date as possible, even the morning of the close.  The purpose behind it is to make sure that the house is in the same shape as when it was initially inspected.  If there are any walk-through issues, they are resolved at the closing table (usually what happens is that the sellers either pays a concession or put money in an escrow account, which becomes the buyers, if the seller doesn't rectify whatever the problem is). Also, the buyers/sellers need to estimate the amount of oil that is left in the oil tank, and the buyers will pay the pro-rated amount at closing (assuming that oil is involved).


The buyers’ attorney will ask the buyers to bring him a certified check covering all the amounts mentioned above, including the "cash at closing" portion of the deal. He may ask for it from the buyers, prior to closing.  It is a much more efficient process than it used to be years ago - you write one check, as opposed to 10.  The check will cover, but is not limited to, the following elements:


      a) Cash On Close amount

      b) Title Insurance

      c) Pro-rated real estate taxes for the year

      d) Some nominal Suffolk County recording taxes

      e) Buyers’ Attorney Fee

       f) Pro-rated amount of oil in oil tank, based on current market rate

       g) Termite inspection, if not paid for already

       h) N.Y. State Mortgage Tax ($0.75 for each $ 100 of the mortgage)

       i) Points on the mortgage, if applicable

       j) Survey cost, if necessary


As is customary, the buyers’ attorney will ask the buyers to "tip" the Title Insurance agent at the closing table (all attorneys ask you to do this), probably somewhere in the $ 150 range.  I'm not sure, to this day, why this gets done, but it is customary.


If the sellers signed a waiver of the Property Disclosure Statement

(most do), then the buyers will receive a $ 500 rebate from the owner at closing.  If the owner did not, then the buyers will receive a 7 page document filled out by the owner, describing details of the house, and its condition.   Since most sellers don't want the onus of being sued down the road for falsely representing information on this document, most just concede the $ 500.


If you get to this step, you have gotten the keys to the house, and you can

head over and call the house your very own home !!!!!


Douglas R. Hayman
Licensed Real Estate Agent
Century 21 Rustic Realty
765 Route 25A
Miller Place, NY 11764
Business Phone: (631) 744-5300 x213
Business Fax: (631) 744-5403
Cell Phone: (631) 902-1478