Buying a home is a process most people experience once or twice and have to figure out from scratch each time. Here is the full picture — what happens, in what order, and what to watch for at each stage.
Step 1: Check your finances first
Know your credit score (620+ for conventional, 580+ for FHA), debt-to-income ratio (lenders want under 43%), and how much you have saved for down payment and closing costs (2–5% of purchase price on top of the down payment).
Step 2: Get pre-approved
A pre-approval letter means a lender has verified your income, assets, and credit. Sellers will not take your offer seriously without one. It also tells you exactly what you can afford before you start looking.
Step 3: Find a buyer’s agent
A buyer’s agent represents you, not the seller. Their commission is typically paid by the seller. Interview 2–3 agents before choosing one.
Step 4: Search with your head
Decide on must-haves vs nice-to-haves before looking. Research neighborhood crime rates, flood zones, HOA fees, and comparable sales before making any offer.
Step 5: Make an offer
Your agent advises on price based on comparable sales. Include contingencies for inspection, financing, and appraisal. Earnest money deposit of 1–3% shows you are serious.
Step 6: Inspection and appraisal
Hire an independent inspector ($300–$500) to assess the property. The lender will also require an appraisal. If it appraises below purchase price, negotiate or make up the difference.
Step 7: Closing
Review the Closing Disclosure at least three days before closing. Bring a cashier’s check or wire for down payment and closing costs. Sign the papers. Get the keys.