The payment process for used home transactions in the United States typically involves several key steps. First, the buyer and seller agree on a purchase price and terms, often through a written offer. Once accepted, the buyer deposits an earnest money deposit (usually 1-3% of the sale price) to show commitment. This deposit is held in escrow and is refundable if the deal falls through. Next, the buyer conducts a home inspection and secures mortgage financing, if applicable. The seller then provides necessary documents, including title reports and disclosure forms. A closing agent or attorney reviews all paperwork, coordinates the final payment, and transfers ownership. The buyer pays the remaining balance, often through a cashier’s check or wire transfer, and receives the keys.

This structured process ensures transparency, reduces fraud, and complies with legal and financial regulations. Earnest money deposits protect sellers from canceled deals, while escrow accounts and title insurance mitigate risks. Mortgage financing requires appraisals and credit checks to ensure repayment capacity, reducing default risks. Data from the National Association of Realtors (NAR) shows that 8% of U.S. home purchases were cash-based in 2022, highlighting the importance of escrow and title verification. The Federal Housing Finance Agency (FHFA) reports that 95% of mortgage loans require an appraisal, averaging $500-$1,000, to confirm property value. Delinquency rates for conforming mortgages (under $729,750) were 1.1% in Q1 2023, per FHFA, underscoring the role of rigorous underwriting. These steps collectively reduce transactional friction and ensure equitable risk distribution between buyers and sellers. The process balances speed with security, adapting to market conditions like rising interest rates (now averaging 6.5% for 30-year fixed loans) and evolving consumer preferences for digital closings.