Buying a home is one of the largest financial transactions most people will ever make. The process involves several distinct stages, each with its own documents, deadlines, and decisions. Understanding what those stages are and what happens during each one makes the process considerably easier to navigate.
This guide walks through the steps to buying a home in the order they typically occur. Every transaction is different, and specific timelines are governed by the terms of the purchase contract. The steps below reflect how a standard residential home purchase in Arizona generally unfolds.
Step 1: Determine your budget
Before looking at homes, most buyers start by understanding how much they can afford to spend. This involves reviewing income, existing debts, monthly expenses, and how much money is available for a down payment and closing costs.
A down payment is the portion of the purchase price a buyer pays in cash at closing. The remainder is typically financed through a mortgage loan. Down payment requirements vary depending on the type of loan and lender, but common minimums range from 3 percent for some conventional loans to 3.5 percent for FHA loans. Neither of those figures represents a requirement to put down a larger amount — they are the minimum thresholds set by those loan programs.
Closing costs are separate fees paid at the end of the transaction to complete the sale. They are distinct from the down payment and are due at closing. In Arizona, buyers typically pay closing costs of 2 to 5 percent of the loan amount. On a $350,000 loan, that range would be $7,000 to $17,500.
Step 2: Get pre-approved for a mortgage
A mortgage pre-approval is a written statement from a lender indicating how much money they are prepared to lend, based on a formal review of the buyer’s income, credit history, existing debts, and assets. Pre-approval is not a guarantee that the loan will close, but it gives the buyer a clear borrowing limit before they begin making offers.
Most sellers in Arizona will not seriously consider an offer that does not come with a pre-approval letter. Getting pre-approved before searching for homes allows the buyer to focus on properties within their actual price range and to move quickly when they find one they want to purchase.
Step 3: Search for homes and tour properties
Once a buyer knows their budget, they search for homes that meet their needs within that price range. Buyers can search through online listing platforms, directly through sellers who have listed their property independently, or through a variety of other channels.
When a buyer identifies a property they want to consider seriously, they schedule a showing to tour the home in person.
Step 4: Make a written offer
When a buyer decides to purchase a specific home, they submit a written offer to the seller. In Arizona, real estate contracts must be in writing to be legally binding — verbal agreements are not enforceable.
The written offer takes the form of a Purchase and Sale Agreement, which sets out all of the terms of the proposed transaction. Those terms include the purchase price, the amount of earnest money the buyer is offering to deposit, the proposed closing date, and any contingencies the buyer wants included.
A contingency is a condition written into the contract that must be satisfied for the transaction to move forward. If a contingency is not met, it gives the buyer the right to exit the contract under specific circumstances without losing their earnest money deposit. Common contingencies cover the home inspection, the buyer’s financing, and the property appraisal. Each of those is explained in detail in a separate guide in this series.
The seller has three options after receiving an offer: accept it, reject it, or respond with a counteroffer proposing different terms. Negotiations continue until both parties agree on all terms in writing, at which point the contract is fully executed and the transaction advances to the next stage.
Qilo provides buyers and sellers with a legally compliant Purchase and Sale Agreement and other relevant documents as part of the platform.
Step 5: Deposit earnest money
Once both parties have signed the contract, the buyer deposits earnest money with a neutral third party — in Arizona, this is typically a title or escrow company. Earnest money is a good-faith deposit that demonstrates to the seller that the buyer is committed to completing the purchase. The deposit is due within the timeframe specified in the contract, commonly 1 to 3 business days after acceptance.
In Arizona, earnest money is commonly 1 to 3 percent of the purchase price, though the amount is negotiated and written into the contract. On a $350,000 home, a 1 percent earnest money deposit would be $3,500.
If the sale closes, the earnest money is credited toward the buyer’s down payment or closing costs. The conditions under which the deposit is refundable or forfeited are governed entirely by the written contract terms. For a full explanation of how earnest money works, see our guide: What is earnest money?
Step 6: Complete the inspection period
After the contract is executed and earnest money is deposited, the buyer enters the inspection period. This is a window of time, defined in the contract, during which the buyer arranges for a licensed home inspector, or anyone they choose, to evaluate the physical condition of the property.
A home inspection covers the structural and mechanical components of the home, including the roof, foundation, electrical system, plumbing, and HVAC system. The inspector provides a written report of their findings. The inspection period in Arizona is commonly ~10 days from the date the contract is accepted, though the parties can negotiate a shorter or longer window in the contract.
After reviewing the inspection report, the buyer has several options. They can accept the property in its current condition, request that the seller make specific repairs before closing, ask for a reduction in the purchase price to account for needed repairs, request a credit toward closing costs in lieu of repairs, or — if the findings are significant enough — cancel the contract within the inspection period and receive their earnest money back.
Any requests the buyer makes based on inspection findings must be submitted to the seller in writing before the inspection period expires. The seller can agree to some or all requests, decline them, or propose an alternative. If the parties cannot reach agreement, the buyer retains the right to cancel under the inspection contingency. All of this negotiation must be resolved within the inspection period as defined in the contract.
For more on how contingencies work, see our guide: What is a contingency in a real estate contract?
Step 7: The lender processes the mortgage
While the inspection period is underway, the buyer’s lender is simultaneously processing the mortgage application. This involves a formal review of the buyer’s income, employment, bank statements, and credit — a process called underwriting. The lender also orders an independent appraisal of the property during this period.
An appraisal is an evaluation of the property’s market value conducted by a licensed, independent appraiser. The lender requires the appraisal to confirm that the home is worth at least as much as the buyer has agreed to pay. If the appraised value comes in below the purchase price, the lender will not approve a loan for the full amount, and the buyer and seller must decide how to handle the difference. Mortgage underwriting and appraisal in Arizona typically take 21 to 45 days from contract acceptance, depending on the lender and loan type.
Step 8: Title review and escrow preparation
Simultaneously with the inspection and loan process, a title company conducts a title search on the property. A title search is a review of the property’s public ownership records, the purpose of which is to confirm that the seller has the legal right to sell the property and that there are no outstanding claims, unpaid liens, or legal disputes attached to it.
In Arizona, real estate closings are handled by escrow companies, which are frequently the escrow division of a title company. The escrow company holds the earnest money in a trust account, collects and distributes all funds at closing, prepares the closing documents, and coordinates the recording of the deed with the county recorder’s office.
For a full explanation of what escrow is and how it functions, see our guide: What is escrow, and what does it do?
Step 9: Closing
Closing is the final step in the home buying process. At closing, the buyer signs all loan documents and the paperwork required to complete the transfer of ownership. The buyer also pays the remaining funds due — the down payment and closing costs — which are typically wired to the escrow company before or on the day of closing.
Once all documents are signed and all funds are confirmed received, the escrow company releases the proceeds to the seller and submits the deed to the county recorder’s office for recording. Recording is the process by which the transfer of ownership is entered into the public record. Once the deed is recorded, the buyer is the legal owner of the property and receives the keys.
Most financed home purchases in Arizona close within 30 to 45 days from the date the contract is accepted. Cash purchases can close faster, sometimes in as few as 7 to 14 days, because there is no lender underwriting process.
Frequently asked questions
How long does it take to buy a home in Arizona?
From the date a purchase contract is accepted to the date of closing, most financed transactions in Arizona take 30 to 45 days. The full timeline from beginning a home search to closing depends on how long it takes to find a property and negotiate a contract, which varies significantly.
Does a real estate contract have to be in writing in Arizona?
Yes. Under Arizona law, a contract for the purchase and sale of real estate must be in writing and signed by both parties to be legally binding. Verbal agreements to purchase real estate are not enforceable.
What happens if the appraisal comes in lower than the purchase price?
If the appraised value is lower than the agreed purchase price, the lender will not approve a loan for the full amount. The buyer and seller typically have three options: the seller lowers the price to the appraised value, the buyer pays the difference in cash out of pocket, or they negotiate a combination of both. If they cannot reach an agreement, and the contract includes an appraisal contingency, the buyer may have the right to cancel and recover their earnest money.
What is the difference between pre-qualification and pre-approval?
Pre-qualification is an informal estimate of what a buyer might be able to borrow, based on self-reported financial information and no formal verification. Pre-approval involves a formal review by the lender of the buyer’s income, credit, assets, and debts, and results in a written statement of how much the lender is prepared to lend. Most sellers in Arizona expect a pre-approval letter when reviewing offers.
Qilo is a flat-fee real estate marketplace for buyers and sellers in Arizona. Buyers and sellers on the platform have access to a legally compliant Purchase and Sale Agreement, transaction tools, and step-by-step guidance through every stage of the process described above.
Related reading: What Actually Happens When You Sell a Home, From Start to Finish and What Is Escrow, and What Does It Do?.