Alabama process · buyer view

The Alabama Home-Buying Process: Your Step-by-Step Checklist

This checklist walks you through buying a home in Alabama from the first lender call to keys in hand.

Reading as buyer. Switch to seller

Phase 1 of 7 · typically 2-8 weeks

Pre-Offer

You get your money lined up, pick an agent, and start looking at homes. In Alabama you also sign a written buyer brokerage agreement before touring.

  1. Set your real budget and savings target

    YouBefore talking to any lender

    Add up your income, debts, and savings to figure out a monthly payment you can actually live with. Plan on cash for a down payment, closing costs, moving, and an emergency cushion after you close.

    You'll need

    • Recent pay stubs
    • Most recent credit card and loan statements
    • Bank and savings statements

    Cost: $0

  2. Get pre-approved with 2-3 lenders

    LenderBefore you start touring homes

    Apply with at least two or three lenders within a two-week window so your credit only takes one hit. Compare interest rate, lender fees, and the loan estimate side by side before you pick one.

    You'll need

    • W-2s (last 2 years)
    • Pay stubs (last 30 days)
    • Bank statements (last 2 months)
    • Photo ID
    • Tax returns (last 2 years if self-employed)

    Cost: $0

  3. Interview buyer's agents

    YouBefore you sign anything or tour a home

    Talk to two or three agents about how they work, what they charge, and their experience in the areas you want. Ask how they handle multiple offers and what their plan is if a home does not appraise.

    Cost: $0

  4. Read and sign the agency disclosure (Form RECAD)

    Your agentAt first substantive contact, before touring

    Alabama agents must give you Form RECAD at the first real conversation about buying. It explains whether the agent represents you, the seller, or works as a neutral transaction broker. Make sure you understand which role your agent will play before you go any further.

    You'll need

    • Form RECAD

    Cost: $0

  5. Sign a written buyer brokerage agreement

    Your agentBefore touring any home listed on the MLS

    Since August 17, 2024, MLS members in Alabama cannot show you a home until you sign a written buyer representation agreement. The agreement spells out how much your agent will be paid, who pays it, and how long it lasts. Read every line and ask for changes before you sign.

    You'll need

    • AAR Exclusive Buyer Agency Agreement

    Cost: Varies — negotiated in the agreement

  6. Tour homes and pick your top choice

    Your agentAfter pre-approval and signed buyer agreement

    Visit homes in person, take photos, and keep notes on each one. Pay attention to the neighborhood at different times of day and any obvious repairs you can see with your own eyes.

    Cost: $0

Phase 2 of 7 · typically 1-7 days

Make an Offer

You decide on a price, build in protections, and submit a written offer using the standard Alabama purchase contract. Negotiations may go back and forth before you have a deal.

  1. Review comparable sales with your agent

    Your agentBefore drafting your offer

    Look at what similar homes nearby have actually sold for in the last 3-6 months. The sold price matters more than the list price when you decide what to offer.

    You'll need

    • Comparable sales report

    Cost: $0

  2. Decide how much earnest money to offer

    YouBefore writing the offer

    Earnest money is a deposit that shows the seller you are serious. In Alabama it usually runs 1% to 2% of the price and goes into the broker's trust account, where it is held until closing or until a contingency lets you walk away.

    Cost: 1-2% of purchase price typical

  3. Draft your offer on the AAR purchase contract

    Your agentOnce you choose a home

    Most Alabama deals use the Alabama Association of REALTORS standard purchase contract. Your agent fills in the price, closing date, what stays with the home, and which contingencies you want.

    You'll need

    • AAR Residential Purchase Contract

    Cost: $0

  4. Add the right contingencies for your protection

    Your agentWhile drafting the offer

    In Alabama, contingencies are not automatic — you have to write them into the contract. Common ones include a financing contingency, an appraisal contingency, and an inspection contingency, each with its own deadline.

    Cost: $0

  5. Submit the offer and negotiate the response

    Your agentUntil both sides agree

    The seller can accept, reject, or send back a counter-offer with different terms. Go through any counter-offer carefully before you sign, because once both sides sign you are in a binding contract.

    You'll need

    • Signed purchase contract

    Cost: $0

Phase 3 of 7 · typically 3-7 days after acceptance

Under Contract

You are officially in escrow. Earnest money is deposited, key disclosures are reviewed, and the clock starts on every contingency deadline.

  1. Deliver your earnest money on time

    YouWithin the deadline in your contract (often 1-3 days after acceptance)

    Send your earnest money to the broker or closing office named in the contract by the deadline. Alabama brokers must deposit those funds into a separate trust account within three business days of receiving them.

    You'll need

    • Cashier's check or wire instructions

    Cost: 1-2% of purchase price (already counted above)

  2. Open your file with the closing attorney or title company

    Escrow / titleWithin 1-3 days of contract acceptance

    In north Alabama most closings are done by attorneys, while title companies handle many closings in coastal areas. Send your contract and contact details so they can start the title search and prepare closing paperwork.

    You'll need

    • Signed purchase contract
    • Photo ID

    Cost: $0 at this step

  3. Review the lead-based paint disclosure (homes built before 1978)

    Seller's sideRight after acceptance, before inspection deadline

    Federal law requires the seller to give you a lead-based paint disclosure, any known reports, and an EPA pamphlet for any home built before 1978. You generally have 10 days to test for lead paint unless you waive that right in writing.

    You'll need

    • Lead-based paint disclosure
    • EPA 'Protect Your Family From Lead' pamphlet

    Cost: $0

  4. Request HOA or condo documents

    Seller's sideWithin the first week after acceptance

    If the home is in an HOA or condo, ask for the resale certificate, budget, current dues, and rules. For Alabama condos built after January 1, 1991, the seller must give you a resale certificate showing fees, special assessments, and reserves.

    You'll need

    • Resale certificate
    • HOA budget and bylaws
    • Rules and regulations

    Cost: Varies — fee often paid by seller

  5. Understand 'buyer beware' before your deadlines pass

    YouRight after going under contract

    Alabama follows caveat emptor, which means most sellers of resale homes do not have to fill out a property condition form. It is on you to find problems through your own inspections and questions before contingencies expire.

    Cost: $0

Phase 4 of 7 · typically 7-14 days from acceptance

Inspection & Due Diligence

You hire inspectors, walk through the findings, and decide whether to ask for repairs, a credit, or to back out before the inspection window closes.

  1. Hire a licensed home inspector

    InspectorWithin the inspection contingency window in your contract

    Pick an inspector with strong reviews and ask what their report looks like. Schedule the inspection early in your inspection window so you have time to follow up on anything they find.

    Cost: $350-600 typical

  2. Attend the inspection in person

    YouDay of the inspection

    Walk through the home with the inspector and ask questions as they go. You learn more about the home's systems, where the shut-offs are, and what is normal wear versus a real problem.

    Cost: $0

  3. Order any specialty inspections you need

    InspectorWithin the inspection contingency window

    Based on the home's age and location, consider a separate termite (WDIR), roof, HVAC, septic, well, or radon inspection. In Alabama's climate, termite and moisture issues are common, so a wood-destroying-insect report is worth the small cost.

    Cost: $75-300 per specialty inspection

  4. Review the report and decide your next move

    YouWithin the inspection contingency window

    Go through the report with your agent and group items into safety, big-ticket, and cosmetic. Decide whether to ask the seller for repairs or a credit, accept the home as-is, or use your inspection contingency to walk away and get your earnest money back.

    You'll need

    • Inspection report
    • Specialty reports

    Cost: $0

  5. Negotiate repairs or a closing credit

    Your agentBefore your inspection contingency expires

    Send a written repair request to the seller through your agent within your contingency window. The seller can agree, refuse, or counter, and any agreement should be put in writing as an amendment to your contract.

    You'll need

    • Repair request amendment

    Cost: $0

Phase 5 of 7 · typically 2-4 weeks

Loan & Appraisal

Your lender finalizes underwriting and orders an appraisal to confirm the home is worth the price. You finish your paperwork and lock in your interest rate.

  1. Submit your full loan application

    YouWithin 3-5 days of contract acceptance

    Within a few days of going under contract, send your lender every document they ask for. The faster you turn things in, the lower the risk of delaying your closing date.

    You'll need

    • Signed purchase contract
    • Updated pay stubs
    • Updated bank statements
    • Tax returns
    • Photo ID
    • Gift letters (if any)

    Cost: Application fee varies — often included in closing costs

  2. Lock your interest rate

    LenderOnce under contract and comfortable with current rate

    When the rate looks good to you and your closing date is realistic, ask your lender to lock it. A rate lock fixes your interest rate for a set number of days while underwriting finishes.

    You'll need

    • Rate lock confirmation

    Cost: $0 (built into rate) typical

  3. Pay for and review the appraisal

    LenderWithin 1-2 weeks of contract acceptance

    Your lender orders a licensed appraiser to estimate the home's market value. If the appraisal comes in below the price you agreed to pay, you may be able to renegotiate, bring extra cash, or walk away if you have an appraisal contingency.

    You'll need

    • Appraisal report

    Cost: $450-700 typical

  4. Respond fast to underwriting requests

    YouThroughout underwriting

    Underwriters often come back with extra questions or document requests. Reply the same day, because every missing item pushes your closing date out.

    Cost: $0

Phase 6 of 7 · typically 1-2 weeks before closing

Pre-Closing Prep

Title, insurance, and final numbers come together. You walk the home one more time and get ready to send funds to closing.

  1. Shop and bind homeowners insurance

    You2-3 weeks before closing

    Get quotes from at least three insurers and pick a policy that meets your lender's minimum coverage. Your lender needs proof of insurance, called a binder, before they can clear you to close.

    You'll need

    • Insurance binder or declarations page

    Cost: $900-2,500 per year typical

  2. Check the flood zone and order flood insurance if required

    YouBefore closing

    Look up the property on FEMA's flood map and ask your lender if flood insurance is required. Coastal and river-area Alabama homes are more likely to need it on top of regular homeowners insurance.

    You'll need

    • Flood determination
    • Flood insurance binder (if required)

    Cost: $400-2,000 per year if required

  3. Review the title commitment and any survey

    Escrow / title1-2 weeks before closing

    The closing office runs a title search and sends a commitment listing any liens, easements, or restrictions on the property. Read it with your agent or attorney and ask about anything that limits how you can use the home.

    You'll need

    • Title commitment
    • Survey (if ordered)

    Cost: Title insurance is paid at closing — see closing tasks

  4. Review your Closing Disclosure at least 3 business days before closing

    LenderAt least 3 business days before closing

    Federal law requires your lender to send a Closing Disclosure at least three business days before closing. Compare the numbers to your original Loan Estimate and ask about anything that increased.

    You'll need

    • Closing Disclosure

    Cost: $0

  5. Do a final walkthrough

    You1-2 days before closing

    Walk through the home 24-48 hours before closing to confirm it is in the condition you agreed to and that any negotiated repairs are done. Test the major systems and check that nothing has been damaged or removed since the inspection.

    Cost: $0

Phase 7 of 7 · typically 1 day

Closing Day

You sign final paperwork, send your funds, and the deed gets recorded. After that, the home is yours.

  1. Wire or bring your cash to close

    YouDay before or morning of closing

    Most closing offices require a wire or cashier's check for the down payment and closing costs. Always confirm wire instructions by calling a known phone number — wire fraud schemes that spoof closing emails are common and the money can be impossible to recover.

    You'll need

    • Wire confirmation or cashier's check

    Cost: Down payment + closing costs (typically 2-5% of price for closing costs)

  2. Sign your closing documents

    Escrow / titleClosing day

    You will sign the deed, mortgage or deed of trust, promissory note, and a stack of disclosures. In Alabama, the closing is usually run by a closing attorney in the northern parts of the state and by a title company in many coastal areas.

    You'll need

    • Photo ID
    • Closing Disclosure

    Cost: $0 at signing — costs were sent in advance

  3. Pay Alabama deed and mortgage taxes at closing

    Escrow / titleAt closing

    Alabama charges a deed tax of $0.50 for every $500 of the sale price (about $1 per $1,000) and a mortgage tax of $0.15 for every $100 of the loan amount. Whether the buyer or seller pays the deed tax is negotiated in your purchase contract, but the buyer almost always pays the mortgage tax.

    Cost: Roughly $1 per $1,000 of price (deed tax) + $1.50 per $1,000 of loan (mortgage tax)

  4. Get your recorded deed and the keys

    Escrow / titleSame day or next business day after signing

    After signing and funding, the closing office records the deed at the county probate office, making you the official owner. You will receive the keys, garage remotes, and any access codes, plus a copy of your final closing package.

    You'll need

    • Recorded deed (copy)
    • Final closing package

    Cost: Recording fees included in closing costs

Sources

  1. [1] NAR Settlement FAQs — Practice Changes Effective August 17 2024
  2. [2] AREC Rules — Agency Agreements and Disclosure
  3. [3] AREC Rules — Compensation and Brokerage Agreements
  4. [4] AREC Rule 790-X-3-.12 — Material Fact Disclosure
  5. [5] AREC Rule 790-X-3-.12 — Material Fact Disclosure Duty
  6. [6] EPA Lead-Based Paint Disclosure Requirements for Real Estate
  7. [7] HUD Lead Disclosure Rule
  8. [8] AREC Rules — Contract Handling and Transaction Management
  9. [9] Ala. Code §35-8A-308 — Resale Certificate Requirements
  10. [10] Ala. Code §35-8A-101 — Alabama Uniform Condominium Act
  11. [11] Ala. Code §34-27-80 — BRRETA
  12. [12] AREC Rule 790-X-3-.15 — Agency Disclosure
  13. [13] Ala. Code §40-22-1 — Deed Transfer Tax
  14. [14] Ala. Code §40-22-2 — Mortgage Recordation Tax
  15. [15] AREC Rule 790-X-4 — Trust Account Requirements

Last updated May 15, 2026