The home buying process: Every step from search to closing

Written by Samantha SheltonNMLS 1647301Updated October 2026

The home buying process runs through seven core stages: preparing your finances, getting preapproved, assembling your agent and lender team, house hunting, making an offer, completing inspection and appraisal, and closing. From accepted offer to keys typically takes 30 to 45 days, and the full journey from your first budgeting session to closing day usually spans two to four months.

The order is the part most buyers get wrong. Finances come before preapproval, and preapproval comes before house hunting. Run the stages in sequence and each one sets up the next instead of surprising you.

Learn how the home buying process works stage by stage, including what each step is meant to accomplish, how long it takes, and which federal timing rules protect you along the way. If you’re just getting oriented, start with our Home Buying guide.

Key takeaways:

• Seven stages, one fixed order: Finances, preapproval, team, search, offer, inspection and appraisal, closing, 7 stages that typically run 2 to 4 months from first budget to signed paperwork.
• Preapproval is the pivot point: It turns your budget from a guess into a lender-verified number, and federal rules require a lender to deliver a Loan Estimate within 3 business days of receiving your application so you can compare offers side by side.
• The under-contract stage runs 30 to 45 days: During that window, avoid job changes, new debts, and large purchases, because lenders re-verify credit and employment right before closing.

What order do the stages of buying a home run in?

There are seven stages, and they run in a fixed order: get your finances ready, get preapproved, build your team, search for homes, make an offer, complete inspection and appraisal while underwriting reviews your file, then close. Each stage produces something the next stage needs, which is why skipping ahead is where buyers get burned.

1. Get your finances loan-ready. Check your credit, measure your debt load, and build the cash you’ll actually need at the table.
2. Get preapproved. A lender verifies your income, assets, and credit, then issues a letter with a real number on it.
3. Assemble your team. A buyer’s agent, a loan officer or broker, a home inspector, an insurance agent, and a title company or real estate attorney.
4. Search for homes. Tour against a written must-have list instead of a feeling.
5. Make an offer. Price, earnest money, contingencies, and a closing date, then negotiate.
6. Complete inspection, appraisal, and underwriting. Three tracks run at once during the under-contract window.
7. Close. Review your Closing Disclosure, do the final walkthrough, sign, and take the keys.

Federal agencies describe the same journey at different resolutions. HUD’s home buying resources break it into nine steps by separating out knowing your rights, researching homebuying programs, and shopping for homeowners insurance. The CFPB’s buying a house toolkit compresses it into four phases: prepare to shop, explore loan choices, choose a loan offer, and get ready to close. The stage names differ. The sequence doesn’t.

This page stays at overview altitude on purpose. For the granular, task-by-task version, use our 12-step guide to buying a house, and browse the full Home Buying Process hub for a deep dive on any single stage.

How much time does each stage of buying a home take?

Two to four months end to end is typical, and only one stage has a predictable length: the under-contract phase runs 30 to 45 days from accepted offer to closing across Align Lending’s broker network.¹ Financial prep and house hunting are where a timeline actually stretches or compresses, and neither one is on a clock you control.

Notice that the two stages you can compress are the first two. Buyers who arrive at the search already preapproved shave weeks off the calendar and can write an offer the same afternoon they tour a house.

Step 1: Get your finances loan-ready

Step 1 exists to turn a vague sense of affordability into three specific numbers, and it takes anywhere from a weekend to a year depending on where your credit and savings stand today. Everything downstream, your preapproval amount, your price range, your monthly payment, is built on what you establish here.

Know your three numbers before a lender does

Pull your credit reports, add up your monthly debt payments, and count your liquid savings. Those three inputs drive the loan amount a lender will approve, and knowing them early means no surprises in Step 2.

• Credit score: Your score influences both whether you qualify and how a lender prices your loan. Check your reports for errors months ahead of applying, because disputes take time to resolve.
• Debt-to-income ratio: Divide your total monthly debt payments by your gross monthly income. Lenders use this ratio to decide how much of your income is already committed before a mortgage payment is added.
• Cash to close: This is your down payment plus closing costs plus your earnest money deposit, and it’s usually the number that surprises first-time buyers.

Build the cash you’ll actually need at the table

The down payment is only one piece. You also owe closing costs at signing, and the CFPB is direct about who carries them: when you buy a home you generally pay all of the costs associated with the transaction, though depending on the contract or state law the seller may end up paying some. A seller credit toward your closing costs is negotiable, but sellers usually want a higher purchase price in exchange.

Don’t budget closing costs from a rule of thumb. Your Loan Estimate itemizes them line by line in Step 2, and that document is the real number. Work through Budgeting for Your First Home for the savings plan, how to budget for closing costs for the fee breakdown, and preparing to buy for the full readiness checklist. If you’re still weighing the decision itself, our renting vs. buying financial comparison runs the math both ways.

Step 2: Get preapproved before you tour a single house

Preapproval is the pivot point of the entire process, and it usually takes 1 to 5 business days once your documents are in. It converts your budget from a guess into a lender-verified number, and it’s the difference between an offer a listing agent takes seriously and one they set aside.

What a preapproval actually verifies

A prequalification is an estimate based on what you told a lender. A preapproval is a decision based on what a lender documented: pay stubs, W-2s, tax returns, bank statements, and a credit pull. Our guide to prequalified vs. preapproved covers the distinction, and the Importance of Mortgage Preapproval explains why the letter carries weight the moment a seller has two offers to compare.

Applying also starts two federal clocks in your favor. Once a lender receives your application, it must deliver or mail your Loan Estimate no later than three business days later.² And for a loan secured by a first lien on a dwelling, the lender must send you written notice of your right to receive a copy of every appraisal within three business days of your application.³

Why you want more than one Loan Estimate

The Loan Estimate is a standardized three-page form, which means two of them can be laid side by side and compared line for line. The CFPB’s guidance is unambiguous: request multiple Loan Estimates from different lenders so you can compare and choose the loan that’s right for you. Start with understanding your Loan Estimate so you know which lines are shoppable and which aren’t.

This is the structural reason to work with a broker rather than a single bank. At Align Lending, one application goes out to competing wholesale lenders, and you see the pricing differences without filling out five separate applications or absorbing five separate credit inquiries.

Step 3: Assemble your buying team

You’ll work with four or five professionals before closing, and you choose two of them yourself: your agent and your lender. The rest get hired or assigned as the transaction moves.

• Buyer’s agent: Runs pricing analysis, writes and negotiates your offer, and manages every contract deadline. Interview at least two, and read how to choose a real estate agent before you sign a representation agreement.
• Loan officer or mortgage broker: Sets your price range, issues the preapproval, and shepherds the file through underwriting. A broker shops the file; a bank quotes its own product.
• Home inspector: You hire and pay this person during the inspection window. HUD lists getting a home inspection as its own step in the buying process for a reason.
• Insurance agent: Homeowners insurance has to be bound before closing, and quotes vary enough that shopping is worth an afternoon.
• Title company or real estate attorney: Searches the title, clears liens, issues title insurance, and hosts the closing table.

Step 4: Search for homes against a written list

House hunting is the least predictable stage, a week for some buyers, six months for others, and the single best way to shorten it is to decide what you need before you start touring. Emotion is efficient at picking houses and terrible at picking budgets.

• Location constraints: Commute time, school district, and the county you want to be taxed in are the features a renovation can’t fix later.
• Non-negotiables vs. nice-to-haves: Write both lists down and keep them to five items each. A house that clears every non-negotiable and misses half the nice-to-haves is usually the right house.
• Condition tolerance: Be honest about whether you have the cash and appetite for repairs, because a cosmetic fixer and a structural one look similar in listing photos.
• Deal breakers: Standing water in a basement, an active roof leak, or an unpermitted addition are worth walking on before you spend money on inspection.

Market conditions shape how aggressively you’ll need to move. Our Buying Strategies & Situations hub covers how the search changes between a buyer’s market and a seller’s market.

Step 5: Make an offer and negotiate

An offer is four decisions, not one: price, earnest money, contingencies, and closing date. Across Align Lending’s broker network, purchase offers typically carry earnest money of 1% to 3% of the purchase price, roughly $3,000 to $9,000 on a $300,000 home, and that deposit is credited back to you at closing.⁴

What goes into the offer

• Purchase price: Set it from a comparative market analysis of closed sales in the last 90 days, not from the list price. Our guide to negotiating house prices covers the adjustment logic.
• Earnest money: Your good-faith deposit, held in escrow and applied to your down payment or closing costs at the table. See earnest money deposits for when the money is genuinely at risk.
• Contingencies: The inspection, appraisal, and financing clauses that let you exit and recover your deposit. Read contingencies in home offers before you shorten or waive one.
• Closing date: Free to you and often worth thousands to a seller who needs a specific timeline.

How the negotiation usually plays out

Expect a counteroffer. Sellers commonly counter on price, closing date, or which repairs they’ll handle, and the round trip takes a day or two per exchange. When several offers land at once, the listing agent typically calls for highest and best by a deadline, our guide to creating a competitive offer covers the terms that win without raising your price.

Step 6: Clear inspection, appraisal, and underwriting

Once your offer is accepted you enter the 30 to 45 day under-contract window, and three tracks run at the same time: your inspection, the lender’s appraisal, and underwriting. The CFPB’s own closing checklist puts all three in this stage, alongside binding homeowners and title insurance.

The home inspection is yours to order

You hire the inspector, you pay for it, and the report is written for you rather than the lender. Inspection windows are usually short by design, so book the appointment the day your offer is accepted. The home inspection checklist for buyers shows what a competent inspection has to cover, and findings become a second negotiation over repairs or credits.

The appraisal belongs to the lender

The appraisal is a lender-ordered opinion of value that protects the loan, not a condition report for you. You have a federal right to see it: for a loan secured by a first lien on a dwelling, the lender must give you a copy of each appraisal or written valuation promptly upon completion, or three business days before closing, whichever comes first.⁵

If the value comes in under your contract price, you have options rather than a dead deal. Our walkthroughs of the home appraisal process and how to appeal a low appraisal cover renegotiating, disputing the report, or covering the gap in cash.

Step 7: Review your Closing Disclosure and close

The final stage is governed by a hard federal deadline: you must receive your Closing Disclosure no later than three business days before closing.⁶ Those three days are not a formality. They exist so you can compare the final numbers against the Loan Estimate you were given back in Step 2 and raise questions before you’re committed.

Read the loan amount, interest rate, monthly payment, and cash to close first, then work through the fee detail. If something doesn’t match what you were quoted, ask before signing, not after.

The final walkthrough and the signing table

Walk the property within 24 hours of closing to confirm agreed repairs were completed, included appliances are still there, and nothing broke during the seller’s move-out. Then bring a government-issued photo ID and your certified funds or wire confirmation to the table. Our guides to the Home Closing Process and preparing for a home closing cover the document stack and the wire-fraud precautions worth taking seriously.

What other federal protections apply before you close?

Homes built before 1978 come with a lead disclosure

According to the EPA’s real estate disclosure rule, sellers of pre-1978 housing must give buyers the pamphlet Protect Your Family From Lead In Your Home, disclose any known lead-based paint hazards, and allow a 10-day period for a paint inspection or risk assessment. The EPA notes buyers may waive that period, or both parties may agree in writing to lengthen or shorten it, so read the lead addendum before you sign.

The flood map is a public record

The FEMA Flood Map Service Center is the official public source for flood hazard information for the National Flood Insurance Program. FEMA says flood maps show how likely an area is to flood, so look up the address and share it with your insurance agent when you request quotes.

Radon testing is an EPA recommendation, not a disclosure

The EPA recommends that anyone buying a home have it tested for radon, and that a new home be tested after occupancy even if it was built with radon-resistant features. The EPA’s action level is 4 picocuries per liter (pCi/L) or higher, and it says levels below that still pose a risk. A radon test can be added to your inspection during the inspection contingency window.

What does the lender re-check before you close?

Underwriting does not end with the preapproval letter. Fannie Mae’s Selling Guide, which governs conventional loans delivered to Fannie Mae, limits what your file can show on the day you sign; other programs set their own rules.

• Document age: per Selling Guide B1-1-03, credit documents must be no more than four months old on the note date, so a long search can mean fresh pay stubs and statements.
• Employment: under B3-3.1-07, the lender must verify employment no more than 10 business days before the note date.
• Large deposits: B3-4.2-02 defines a large deposit as a single deposit that exceeds 50% of total monthly qualifying income, and its source must be documented.
• Debt-to-income: according to B3-6-02, the maximum DTI ratio is 36% for a manually underwritten loan, up to 45% when credit score and reserve requirements are met, and 50% for a loan underwritten through Desktop Underwriter. A car loan taken on during escrow counts when the ratio is recalculated.

Hypothetical example, not an offer. For example, with total monthly qualifying income of $6,000, any single deposit above $3,000, which is 50% of that income, is a large deposit under Fannie Mae’s definition, so a $3,500 birthday check needs a paper trail. See our guides to the debt-to-income ratio and mortgage underwriting.

What is different about buying a home in Michigan?

Agency disclosure comes in writing, first

Under MCL 339.2517, a Michigan real estate licensee must disclose the type of agency relationship in writing before you share any confidential information. A buyer’s agent acts solely on behalf of the buyer, and a licensee may represent both sides only with the written informed consent of both.

The deed is recorded with the county register of deeds

Under MCL 565.29, an unrecorded conveyance of Michigan real estate is void against a later good-faith purchaser who pays value and records first, which is why the title company records your deed at closing. MCL 600.2567 sets the register of deeds’ fee for recording a document at $30.00 regardless of the number of pages.

Once recorded, your deed is public. The Oakland County Register of Deeds says its office creates a public record for all land in the county, including deeds and mortgages, and its Super Index holds copies of recorded documents back to January 1, 1964. The Ottawa County Register of Deeds lets anyone search its document information at no charge and offers free Property Fraud Alerts that notify you when a document might have been fraudulently recorded under your name. After closing, look up your own deed to confirm it recorded, and ask your county register of deeds whether it offers an alert.

File the Property Transfer Affidavit within 45 days

MCL 211.27a requires a transfer of ownership to be reported within 45 days on a form prescribed by the State Tax Commission. Waterford Township says the new owner completes and signs it. The City of Rochester Hills says the assessor uses it to confirm the assessment and taxable value, and a late filing costs $5 per day, up to $200.

Your tax bill resets the year after you buy

In Michigan, a home’s taxable value is capped while one owner holds it. The year after it sells, that cap comes off and taxable value resets to the state equalized value, which is half of the assessor’s estimate of market value, not automatically half of what you paid. Michigan Treasury explains that under the Michigan Constitution as amended by Proposal A of 1994, a transfer of ownership causes taxable value to uncap in the calendar year following the transfer (Treasury). The purchase price is not the presumptive true cash value (MCL 211.27), so the assessor’s estimate, not your contract price, sets the new value. Align plans with a deliberately high number, half the price times the homestead millage, as a planning figure rather than what the law sets; run any address in the Michigan property tax calculator.

Current bills are split at closing: IRS Publication 530 (2025) says the buyer is treated as paying the taxes beginning with the date of sale. Michigan has a summer and a winter tax levy (both named in MCL 211.7cc), so ask the title company which bills your proration covers.

State programs and 2026 loan limits

Per MSHDA’s MI Home Loan page, the state program serves first-time buyers (no home owned in the previous three years) statewide and repeat buyers in targeted areas, with a sales price limit of $566,355 after June 1, 2026 and a minimum credit score of 640. MSHDA’s MI 10K DPA Loan provides up to $10,000 toward down payment, closing costs, and prepaid expenses as an interest-free loan combined with a MI Home Loan. See our down payment assistance page.

FHFA set the baseline 2026 conforming loan limit for one-unit properties at $832,750 (release dated November 25, 2025), and its 2026 county list shows all 83 Michigan counties at that figure. HUD’s Mortgagee Letter 2025-23 sets the 2026 FHA low-cost area limit for one unit at $541,287, 65% of the national conforming limit. Our loan limits page shows both for any county.

FAQ: The home buying process

Here are answers to common questions about the home buying process.

What are the steps in the home buying process?

In order: get your finances ready (credit, savings, budget), obtain mortgage preapproval, hire a real estate agent, search for homes and tour candidates, make an offer with earnest money and contingencies, complete the inspection and lender appraisal while underwriting reviews your file, then review your Closing Disclosure and sign at closing. Each stage feeds the next, so sequence matters more than speed. Our guide to purchasing your first house walks through the same sequence for first-time buyers.

How long does the home buying process take?

Two to four months is typical end to end. Financial prep and preapproval take days to a few weeks, house hunting is the wild card, some buyers find a home in a week, others search for months, and the under-contract phase from accepted offer to closing runs a fairly consistent 30 to 45 days while inspection, appraisal, and underwriting complete. In competitive markets the search stretches because you may lose offers before you win one, so read how to handle a bidding war before you start touring.

What should I not do during the buying process?

Between preapproval and closing, don’t change jobs, finance a car or furniture, open or close credit accounts, make large unexplained deposits, or miss any payments. Lenders re-verify credit and employment right before closing, and new debt can shrink your approval or kill it outright. Keep your financial picture frozen in place until the keys are in your hand, our 15 first-time home buyer tips cover the rest of the avoidable mistakes.

Do I need a real estate agent to buy a house?

It’s not legally required, but a buyer’s agent handles pricing analysis, offer strategy, contingencies, negotiation, and deadline management. High-stakes work most first-timers shouldn’t improvise. Agent compensation is agreed in writing before you start touring, so you know that cost up front and can build it into your offer. If you go without one, hire a real estate attorney to review the contract, and read our guide to negotiating a home purchase first.

Who pays the transfer tax when you buy a house in Michigan?

By statute, the seller: MCL 207.523 makes the seller or grantor liable, but a purchase agreement can say otherwise. The state rate is $3.75 for each $500 of value (MCL 207.525), and counties add $0.55 per $500, or up to $0.75 in a county of 2,000,000 or more people (MCL 207.504). Hypothetical example, not an offer: a $300,000 sale owes $2,250 state plus $330 county, $2,580 in all. See the calculator.

Can you back out of a purchase agreement in Michigan?

Usually only through a contingency in the contract. Michigan’s Seller Disclosure Act adds one exit: if the seller’s disclosure statement, or an amendment to it, is delivered after the seller signs a binding purchase agreement, you may terminate by written notice within 72 hours of in-person delivery or 120 hours of delivery by registered mail (MCL 565.954). That right expires once the deed transfers. See what a seller’s disclosure covers.

Do I have to use the builder’s preferred lender?

No. The CFPB says homebuilders often have an associated mortgage lender, that you don’t have to use that lender, and that you have the right to shop around for a better deal (CFPB). If an incentive is tied to the builder’s lender, get a Loan Estimate for the same loan elsewhere and compare total costs, not the incentive. Our Loan Estimate check reads two side by side.

When should I file the homestead exemption after buying a house in Michigan?

As soon as you own and occupy the home. Under MCL 211.7cc, a Principal Residence Exemption affidavit filed on or before June 1 applies to the summer tax levy, and one filed on or before November 1 applies to the winter levy. Michigan Treasury says the exemption removes your principal residence from the local school operating millage, up to 18 mills. Our homestead exemption guide covers filing.

The bottom line on the home buying process

The home buying process runs through seven stages in a fixed order: prepare your finances, get preapproved, build your team, search, make an offer, clear inspection and appraisal while underwriting works, then close. The full journey usually takes two to four months, and the under-contract stretch from accepted offer to keys typically runs 30 to 45 days. The two stages you control are the first two, and buyers who arrive at the search already preapproved, with a Loan Estimate in hand and a real number behind their offer, move faster and negotiate from a stronger position than buyers who don’t.

If you’re ready to start the home buying process, talk to Align Lending. We’ll shop your scenario across our lender network and show you the numbers side by side before you write an offer. Call 248-506-5727 or start online.

Footnotes:

1. Timeline ranges reflect observed averages across Align Lending’s wholesale lender network and are not a commitment to a closing date. Align Lending is a broker and does not set lender turn times; your actual timeline depends on your loan program, the property, title work, and how quickly documentation is returned. Return to text.

2. Loan Estimate delivery timing is set by Regulation Z, 12 CFR § 1026.19(e)(1)(iii), and is subject to change. Return to text.

3. Appraisal-rights notice timing is set by Regulation B (ECOA Valuations Rule), 12 CFR § 1002.14(a)(2), and is subject to change. Return to text.

4. Example figures are hypothetical and for educational purposes only; they do not constitute an advertisement of credit terms or a rate quote under federal or state lending laws. Customary earnest money amounts vary by market and by contract, and your deposit, cash to close, and terms will depend on your purchase agreement and your application. Return to text.

5. Appraisal copy delivery timing is set by Regulation B (ECOA Valuations Rule), 12 CFR § 1002.14(a)(1), and is subject to change. Return to text.

6. Closing Disclosure delivery timing is set by Regulation Z, 12 CFR § 1026.19(f)(1)(ii), and is subject to change. Certain late changes to your loan can require a corrected disclosure; ask your loan officer how a change affects your closing date. Return to text.

Sources: Closing Disclosure receipt no later than three business days before consummation, Regulation Z, 12 CFR § 1026.19(f)(1)(ii), Consumer Financial Protection Bureau. Loan Estimate delivered or mailed not later than three business days after the creditor receives the consumer’s application, Regulation Z, 12 CFR § 1026.19(e)(1)(iii). Copy of each appraisal or written valuation provided promptly upon completion or three business days prior to consummation, whichever is earlier, and written notice of the right to receive appraisal copies not later than the third business day after application, Regulation B, 12 CFR § 1002.14(a)(1) and (a)(2). Guidance to request multiple Loan Estimates from different lenders, and the four phases of the buying process, Consumer Financial Protection Bureau, “Buying a House” tools and resources. Buyer generally pays the costs associated with the transaction, seller may pay some depending on the contract or state law, and seller credits typically require a higher purchase price, Consumer Financial Protection Bureau. Nine-step home buying sequence including the home inspection step, U.S. Department of Housing and Urban Development. Earnest money range of 1% to 3% of the purchase price and the 30 to 45 day under-contract timeline, Align Lending broker network purchase and closing data.

This article is for informational purposes only and is not intended to provide legal, financial, or tax advice. Purchase agreements, contingency terms, title matters, and closing documents should be reviewed by a licensed real estate professional or attorney in your state. Consult a qualified professional about your situation. Figures shown are illustrative, are not a rate quote or an offer of credit, and are subject to change. Align Lending is an independent Michigan mortgage broker, NMLS #2041154.

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